Poison pill threatens beneficial higher education reform

The seemingly contradictory actions within the Louisiana House of Representatives continue a disappointing session for higher education reform, highlighting a poison pill that threatens to negate otherwise far-reaching beneficial changes.

This week, the House turned down state Rep. Thomas Carmody’s HB 66, the companion legislation to a proposed constitutional amendment that would have allowed different higher education systems to set their own tuition rates and to delink these from Taylor Opportunity Program for Students awards. With the amendment, these would have allowed schools to increase tuition without requiring two-thirds approval of both chambers of the Legislature, wiping away the ability of system to increase it for each school as much as 10 percent a year if these individually met performance targets, without requiring the state to pay out more in TOPS money.

Enacting these into law and the Constitution would address a higher education delivery system that is overbuilt and inefficient. While alarmist rhetoric incessantly issues forth from higher education policy-makers and sympathizers inside and outside the Legislature that crisis would erupt if taxpayer funding levels for it this upcoming year at least do not match this year’s, the truth is in a comparative sense state subsidies should be more than adequate to meet genuine needs. If funded around last year’s level, that would put the state compared to its peers (plus the District of Columbia) all the way down to 28^th in per capita taxpayer spending on higher education. Which is appropriate, being that the state’s personal per capita income is ranked 30^th.

There are three interrelated reasons for the troubled fiscal condition of state higher education, none having to do with taxpayer effort. One, the system is overbuilt with too many institutions chasing too few students, diluting resources and weakening all of them. Louisiana ranks 8^th in most institutions per capita and 47^th in enrollments per public institution.

Second, it does not operate efficiently. For example, similarly-sized Oregon’s senior institutions get along with less than 10 percent of their revenues coming from the state, while the “doomsday” scenario decried by Louisiana higher education at the legislative session’s beginning, where a potential reduction of hundreds of millions of dollars was discussed, still contained more than twice that proportion.

Third, tuition is underpriced significantly, with the state’s average ranking for four-year schools only 38^th (for two-year, it’s 28^th) – not including the effect of TOPS that pays for roughly a fifth of full-time students’ fare, of whom a third will lose eligibility at some point. Further, the average debt load of a Louisiana higher education student at graduation is the 10^th lowest in the country. Given Louisiana’s relatively higher per capita income, there’s clearly greater ability to pay coming from those who benefit by far the most from the service provided by senior institutions.

So the case is compelling for reducing the taxpayer contribution to higher education and increasing tuition, or passage of the bill, yet HB 66 was rejected. Then, lo and behold, just a day later the House Education Committee approved two bills almost identical in intent, SB 48 and SB 155 by state Sen. Jack Donahue. Having passed the Senate, they now head to the floor of the same House that just defeated HB 66.

But there’s one crucial difference between the two. In SB 155, a constitutional amendment, during the committee phase in the Senate an amendment was forced in that would take authority over admissions requirements from the Board of Regents and transfer it to the systems’ boards. At a philosophical level this simply is bad administrative practice, for the constitutional underpinnings of the division between the Regents overseeing the boards envisions the Regents setting policy while the boards managing their systems, and this alteration confusingly and inefficiently puts policy-making power into the hands of the systems.

However, from a practical standpoint, the outcome from this may be worse. This passage would allow systems with baccalaureate-and-above institutions to lower their admission standards, which the Regents recently raised because these were low, undoubtedly as a response to find enough students to justify the overbuilt status of these institutions in the state, beggaring less prepared and capable students from community colleges in a state already imbalanced with enrollments disproportionately high at senior institutions, which cost more money to educate. Inevitably, these students will fail and drop out at disproportionate rates, wasting taxpayer dollars. Worst of all, to prevent publicity of low retention and graduation rates, standards simply will fall, making Louisiana degrees less useful and attractive and compounding the waste. Then, in the face of worse outcomes of both non-graduates and graduates, the systems involved will claim they need more taxpayer dollars to reverse those trends when it really was a problem of their own making for which they ask the citizenry to compensate.

Thus, this poison pill section of SB 155 threatens to undo all the good that the rest of the bill promises. No doubt it wormed its way in because the votes otherwise weren’t there to pass the bill along, which is why HB 66 got sidelined but SB 155 looks like it will pass on to voters this fall. In sum, it makes the bill better than useless, but barely.

So voters may be left with a Hobson’s choice this fall, unless legislators make a stronger commitment to a quality higher education system that asks students to pay their fair share of the costs to educate them. Yet at this point the courage to do so seems lacking among a legislative majority, to taxpayers’ detriment.