After some tinkering at the margins, Gov. Bobby Jindal seems to be stepping up with ways to stabilize funding for higher education in Louisiana with announcements of technocratic and revolutionary policy initiatives.
On the surface, his support of a constitutional amendment that would reshape the Millennium Trust Fund would seem to be more a technical adjustment than anything else yet its implication resonate more broadly. Established in the aftermath of the famous mid-1990s extortion by state governments of money from tobacco companies, which allegedly was their contribution to pay for health problems of state residents for which the states were paying, some of that settlement, earnings from it, and subsequent deposits into the MTF actually goes to pay for health care by the state, but two-thirds goes to educational purposes, half of that to pay for the Taylor Opportunity Program for Scholars.
Instead of money going into the fund or a third of investment earnings going to support TOPS, the MTF would be capped by this amendment at $1.38 billion and anything over that, by deposit (from the settlement, three-quarters of the annuity payment) or investment, would flow directly to TOPS instead of diversion into it and splitting it up there. Investment earnings presently pay for $15 million of the $134 million current cost of the program; with more money directed to TOPS, that would rise to $58 million upon enactment and by 2018 would increase further up to $128 million by 2030 (and then the amount would be changed in unknown ways as the securitized portion of the settlement, three-fifth, lapses under current arrangements).
In effect, by capping the MTF, dollars that would have gone into that end up supplanting other dollars going to make up the difference between the interest earnings allocated to TOPS and the total cost of TOPS for a year. This has the practical effect of not having the state save as much for health and education purposes through the MTF by instead spending it on TOPS. In turn, this frees up money that would have had to pay for TOPS for other uses – perhaps to provide more funding to higher education.
While this does not increase the amount on money dedicated to funds, merely redirecting them, this done without regard to reform of TOPS is unwise. TOPS simply allows too many marginal students to receive and potentially to waste taxpayer dollars by having low standards for qualification that allows these students to attend baccalaureate-granting universities where they will drop out. Before or in concert with any change to the funding mechanism, these standards need raising to prevent this, to encourage greater learning among high school students to qualify for TOPS that also will lower default rates, and to redirect students to the TOPS award designed for community college tuition that costs less. Only on this condition the funding mechanism should be tied into it, not before, and Jindal did express openness to the idea of raising standards.
Much more far-reaching and disruptive of the established order is Jindal’s prodding, obscurant suggesting, beating around the bush, or whatever you want to call it that Southern University New Orleans merge into the University of New Orleans and that SUNO’s campus be turned into a community college run by the likes of Delgado Community College or something like it. Long ago, right after Hurricane Katrina, it was obvious that, given the extensive damage to SUNO’s campus as well as its small, underutilized size and history of low completion by its students that the costs of reestablishing it as a separate entity simply was not cost effective. Nevertheless, that course was not pursued by Jindal’s predecessor former Gov. Kathleen Blanco nor by her appointees to the Southern University Board of Supervisors or the Louisiana Board of Regents.
Now it’s Jindal, who himself cannot start the process to merge universities, who has appointed most of the current regents and supervisors that can. Long overdue, the consolidation faces bitter opposition from the Southern system, as its number of institutions will drop by 20 percent with a loss of jobs and tens of millions of dollars in resources, as well as from politicians who have used the system as a patronage dumping ground and see it as a source of pride for communities they claim to represent. It will be interesting to see now that Jindal has done the only thing he can do, order that a merger study be done, how these panels and especially his appointees react.
Fireworks especially may come should they prove balky. That will test Jindal who prefers slow, steady, and almost stealthy change of policy to the directions he prefers. Such an approach on this important issue seems unlikely to yield success.
Posted by Jeff Sadow at 07:15