After six years of continuous mid-year state budget cuts, less revenue being generated than projected and the state once again having a shortfall of funds, mid-year cuts will not be triggered.
At the Revenue Estimating Conference, described as the state’s income forecasting panel, Louisiana Governor Bobby Jindal announced the state will bring in $35 million less than what was projected for the 2013-2014 fiscal year, which ends June 30.
Rather than trigger mid-year budget cuts across the state, the most common practice among the Jindal administration, financial experts with the administration say cuts are not necessary.
Southeastern President John L. Crain said the announcement is good news for higher education across the state.
“As everyone is aware, the current fiscal year is the first in several that Louisiana colleges and universities did not face mid-year budget reductions,” said Crain. “It is my sincere hope the absence of a mid-year cut, in combination with the governor’s announcement, represent a long-awaited ‘swing of the pendulum’ for Louisiana higher education.”
The $35 million shortfall is just a small amount when compared to the state’s 2013-2014 fiscal budget of over $25 billion, passed by the Louisiana legislature during its last legislative session.
Commissioner of Administration Kristy Nichols, Jindal’s chief budget advisor, told the Associated Press that the $35 million in lost revenue can be made up through the state’s recent tax amnesty program.
Through the tax amnesty program, taxpayers are eligible to apply for amnesty if they failed to file a tax return or a report, failed to report all income or all tax, interest and penalties that were due, if they claimed incorrect credits or deductions, or misrepresented or omitted any tax due.
Taxpayers under audit or in administrative or judicial litigation can also apply for amnesty under the program.
Most recently, according to the Associated Press, a tax amnesty period was allowed delinquent taxpayers to get caught up on their taxes without paying any penalties and only charging half the interest they would have otherwise owed.
This, alone, accounted for over $90 million in unallocated and available revenue for lawmakers and the Jindal administration to use towards spending, which ended up being more than needed and predicted.
Even if the university had been hit with mid-year cuts, the move would not have been a major dilemma for Crain’s administration.
Since the 2012-2013 fiscal year, the university’s state funds have been cut $7.7 million, a difference of nearly 20 percent. The reduction in state funds is the outcome of the 2013 legislative session which cut about $66 million from higher education alone.
At the same time, however, the Louisiana State University System approved a four percent across-the-board pay raise for many of its employees because legislators dedicated $40 million to the four state university systems: Louisiana Community and Technical College System, Southern University System, the LSU system and University of Louisiana System.
Each university system received roughly $10 million from the allocated funds.
The University of Louisiana System, which Southeastern is part of, is the largest; therefore, each university within the system only received an additional $1.1 million in state assigned funds for the 2013-2014 fiscal year.
At the time, Crain described the allocated funds as an “oversimplification” by the state legislature.