Lack of planning, courage triggers LA college crunch

Unfortunately, crisis budgeting is not synonymous with making the delivery of Louisiana higher education efficient or even effective, although it can serve as a starting point for that overdue process. Problem is, that process should have started long ago.

While premature to review specifically what could be attempted to keep the state’s institutions operating at an adequate level should large budget cuts become necessary, it’s helpful to understand the larger parameters of what the challenge is and what definitely would not work. Discussion must begin with the fact that Louisiana is saddled with too many institutions chasing too few students and not providing all that efficiently as a result.

Consider that, as of the latest data, Louisiana among the states and the District of Columbia ranked 18^th in per capita spending on higher education, in part because it was in the top ten in number of institutions per capita. It also historically grew abnormally dependent upon taxpayer aid, as today, even after years of 10 percent annual tuition increases for most schools, it still ranks fourth from the bottom in average tuition, whereas the ability to pay by residents was higher in terms of per capita income, a dozen states being lower. Had the system not been so deferential to student finances and asked so much of taxpayers, it might have been induced to greater efficiency by now and less vulnerable to reducing state aid.

Not that actual spending at Louisiana’s institutions of higher education actually has declined all that much. Breathless commenting about the hundreds of millions of dollars declination in taxpayer funding obscures the fact that, since the first full fiscal year of Gov. Bobby Jindal’s time in office, total spending by higher education has gone down only 8.5 percent (from $2.878 billion to $2.634 billion). It’s a cut and not insignificant, but in no way has it been a dramatic retrenchment. In fact, the maximum cut being discussed for next year is as much and half again as the entire amount down those seven years. Also to consider is that another 10 percent rise in tuition (which seems not to have much of a discouraging effect upon enrollments as they have crept upwards) will recapture perhaps $100 million.

Still, if the net effect ends up ratcheting down higher education spending even by as much for fiscal year 2016 as through the FY 2009-15 period, such a sudden, large drop cannot be handled through the graduated approach of the past few years, but neither can wholesale paring solve for it. While closing institutions at the end of summer would not produce zero savings – layoff plans could go into effect on Jul. 1 – neither would all savings accrue immediately. And for every dollar saved by closing, roughly 60 cents gets lost in revenue, meaning whatever gap exists would have to be multiplied by 2.5 time in closings expenses not encumbered (students transferring to other institutions might mitigate this somewhat, but many could not). Assuming a cut of $250 million, this that means almost a quarter of all higher education delivery would have to disappear even if all of those expenses could be wiped out immediately, which they can’t.

That the Legislature must produce a two-thirds vote for a closure, or change in level from offering baccalaureate degrees to community college, also makes unlikely closures. Too many legislators take too much pride in or perceive too many patronage opportunities in schools in or around their districts to permit such a majority to form concerning any campus, possibly excepting a few marginal community colleges although as a whole this sector has been growing and would provide the least savings. Even downgrading some baccalaureate institutions would produce few instant savings, because students matriculating in those programs would have to be given a chance to finish out their degrees.

So, it’s cutting that would have to happen. This also faces constraints, in that a college needs a critical mass of personnel to operate. For example, the state’s General Education Requirement menu of courses all students must take doesn’t vanish along with cuts; English and mathematics instruction among other areas must continue regardless of how many majors get discontinued. Then the staff must be on hand to support these activities. You can’t cut past a certain point or the entire institution has to go.

If cuts must be deep enough, then this leaves as the only practical solution declarations of financial exigency, which allows a college wide latitude in personnel decisions that include laying off tenured faculty members. The tactic then could be to hire back many but not all on fixed contracts, likely for lower pay and more class sections taught. While this could have the salutary benefit of making a quick adjustment to the future of higher education (courtesy of changing technology, economic dynamics, cost factors, perceptions of the place of the university in society, and social mobility) – only small core groups of tenured faculty members, if any, with most being on contract – done so in the breech carries tremendous risk. For example, given the generous retirement benefits the state offers to faculty members, those around that age may refuse to come back under these conditions, and others younger may find adequate short-term positions elsewhere, and with the fall semester soon to begin schools could find themselves with a tremendous staffing crunch. Additionally, this must be done in a deliberate manner to avoid raising the ire of accreditation bodies (whose blessings are needed in order to access federal financial aid of any kind) that may not jive well with fiscal imperatives.

Simply, no good option presently exists if cuts go deeply enough (although the Jindal Administration seems to be working on some plan to at least partially resolve dire predictions). It’s regrettable that politicians lacked the necessary courage years ago to start a process that identified an orderly transition that demoted some baccalaureate-and-above institutions to community college status and to close or to consolidate more branch community college campuses, because it simply won’t work to try to do so suddenly. They also equally were derelict in that they have not loosened revenue dedications and continued statutory and constitutional (in fact, increasing these) protections from cutting of areas of the budget that thrusts even relatively minor gaps between projected revenues and expenditures (the FY 2016 total shortfall so far being bandied about is only about 5 percent of the entire budget) largely onto higher education.

This lack of any acceptable solution finally may be what gets unproductive tax breaks off the books to capture revenue, and it appears that a combination of this, tuition increases, and some cutting will have to happen for Louisiana’s higher education to survive in a way it can continue to fulfill its mission.