With the state House’s passage of a revised version of the state budget, cuts to state colleges and universities remain largely unclear.
House Bill 1, which has seen amendments and negotiations for weeks, slashes $525 million in one-time money that Gov. Bobby Jindal had intended to use for recurring expenditures. The $25 billion budget demands approximately $329 million in new revenue and will cut around $106 million to spending that Jindal had initially anticipated.
The plan was devised by a group of House conservatives known informally as the fiscal hawks and House Democrats after the coalition’s original plan was criticized by the governor and state Republican establishment specifically for a key provision which would have minimized tax credits by 15 percent.
Dispersing cuts throughout the state’s expenses, rather than cuts solely hitting healthcare and higher education are what fiscal hawks and House Democrats call for with their proposal. The plan would lessen the impact budget cuts have on colleges and universities.
“Should that go into place where they do spread out some of the cuts so that it’s not focused strictly on higher education and healthcare?” asked Executive Director of Public and Governmental Affairs Erin Cowser. “Basically, that will alleviate some of the pain, but it’s still going to hurt. Would that mitigate some of the cuts? As far as we can tell, without having a final budget in place and definite numbers that we can plug in and see how it works, it should make it less painful.”
House conservatives have long objected to the use of $525 million in contingent one-time money proposed by the governor mainly because it would allow university and college budgets to be subject to possible cuts mid-fiscal year. Within the plan passed through the House, one-time money is replaced with spending cuts and a slew of other measures.
The budget now heads to the state Senate to be approved. It is still unknown whether the governor will veto the budget, if passed in the upper chamber in its current form, and how much higher education will be cut for the upcoming fiscal year.
Originally, Jindal proposed a $24.7 billion budget for the upcoming fiscal year. The spending plan would have cut $75 million to state college and university institutions even with the use of one-time money funds.
“Specific to Southeastern, [the governor’s budget] would result in a $1.3 million reduction,” said Vice President for Administration and Finance Sam Domiano.  “However, this assumes a static enrollment and the 10 percent tuition increase resulting from the GRAD Act. This reduction does not account for increases in mandated costs, to include retirement, insurance and risk management contributions. This increase is estimated at approximately $1.4 million, which would require a reduction in budgeted expenditures for fiscal year 2014 for Southeastern in the amount of approximately $2.7 million.”
In a letter to faculty and staff, university President Dr. John L. Crain expressed concerns over the state’s ongoing budgetary negotiations in the legislative session. The president stated that with the uncertainty of the budget, the university could see cuts ranging from $2.6 million to $22.6 million.
“That’s the crux of the situation. We don’t know,” said Cowser. “The budget takes so many tumultuous turns during the session; those are the far-reaching bookends of what we were able to figure out what it could possibly be.”
Crain continues in his letter pointing out the university’s state support has been cut by almost $40 million since the beginning of fiscal year 2009.
The university’s budget in the 2008-09 fiscal year was roughly $127.6 million with state funding set at $79.3 million and self-revenue at $48.3 million. Since then, the university has seen a comprehensive swap in revenue. For the 2012-2013 fiscal year, the university’s budget is at a mere $108.7 million with state funding at $39.3 million and self-revenue at $69.4 million.
Partly because of the GRAD Act, which allows university’s to raise tuition by 10 percent when particular requirements are met, the university has been able to increase its revenue dramatically. However, this alone has not closed the budget gap the university faces.
“Even with the tuition increases that we have been able to charge, thanks to the GRAD Act, we are still not making up for the funds lost in terms of state funding,” said Cowser. “It’s a good darn thing that we do have the GRAD Act because it’s keeping us close to where we were, but there is still a gap.”
Universities, though, may soon gain control over their tuition according to a bill filed in the current session.
House Bill 194 would essentially remove tuition setting authority from the state legislature and hand it over to individual institutions. The bill would also permit universities the power to charge students more depending on the expense of the major. The bill is supported by Southeastern and awaits debate in the House.