'Averting a Crisis of Confidence in Our Future'



"Averting a Crisis of Confidence in Our Future"

May 26, 2009 CABL Briefing

Louisiana’s leaders have a profound responsibility to identify ways to keep higher education in Louisiana healthy and competitive – not just through the current crisis but for the long term.  The decades of sustained investment by other states in our region and the nation provide clear examples of how this can be done and what the results can be for Louisiana.

 

That’s why for many weeks now CABL has been vocal about the need to be exceedingly careful with the budget cuts that are being proposed for higher education. Legislators and state leaders need to understand very clearly what those proposed cuts will do. Depending on how they are administered they could damage post-secondary education in Louisiana for decades and cause irreparable harm to our future.

 

To be very specific, the level of cuts that are on the table this year and in coming years will be transformational. They will change higher education as we know it. Higher education will be smaller and it will be different. But it can be smaller and different in a variety of ways – some more acceptable than others. For instance we can preserve every institution we have and each one simply shrinks. We can close institutions. We can merge institutions. We can restructure governance systems.  We can change the mission and focus of institutions. We can reduce or eliminate athletics at institutions.

 

And while CABL is not advocating any of these actions at this time, the point is it’s very clear there are many ways we can downsize higher education and create new efficiencies. The key is that we must figure out how to do it in a way that makes the most sense for Louisiana and its future.

 

CABL Recommends

To deal with that situation CABL recommends the following:

 

1. CABL believes state leaders must look to the future, look realistically at the revenue projections for the coming years and determine how much money we will realistically have available for higher education in the future.

2. Using that revenue scenario as a reference, state leaders must envision what aspects of post-secondary education must be preserved to offer our citizens the quality workforce training and higher education they need to succeed. We must protect those things that we as a state need to compete in an economy that will require higher levels of education than our citizens as a whole have so far attained.

3. Recognizing that this can only be done with very serious and very strategic planning, CABL believes the Legislature and governor should reduce the original 15% reduction in state funding for higher education to no more than 7.5% for the 2009-2010 fiscal year.

4. As part of this there must be a mechanism for the Board of Regents to develop and submit to the Legislature a strategic plan for restructuring higher education in Louisiana and conforming it to the size that state revenues dictate it must be under current forecasting scenarios for the future. This could be done in various ways including that suggested in HB 794 by Speaker Tucker which sets up a commission to review higher education.

5. The plan should be data-driven and based on the state’s strategic education and workforce needs in the 21st century. Among other things it should consider:

• The performance of institutions

• The demand for various programs within institutions

• The quality of programs

• The proximate availability of programs within geographical regions and metropolitan regions

• The duplication of programs and schools

• The missions of institutions so they meet the needs of students

• The opportunities to create efficiencies by sharing services across systems

• The needs of the flagship institution to remain in the top tier of universities in the U.S.

• The needs of the state’s other major research institutions to remain competitive with their peers around the country

• The appropriate role for our regional universities

• The capacity within the state’s community college system to adequately meet the needs of citizens who desire to continue their education, but perhaps not attain a four-year college degree

• The state’s workforce development needs

• The overall governance structure of higher education in Louisiana and the alignment of various institutions within systems

• The role of athletics versus the educational mission of institutions

6. The plan should be submitted to the Legislature in ample time for review and final recommendations to be made prior to the 2010 legislative session.

We would strongly recommend that, in the meantime, the various post-secondary education systems administer the current round of cuts in the most strategic ways possible. Higher education is entering a most difficult time. Downsizing to some degree is inevitable. But it is critical that it not come at the expense of our most effective and best-performing institutions and programs – the things we will need to be competitive in the future.

 

If we cannot protect our nationally-ranked top-tier university from losing that status, what does that say about our state? If we cannot preserve the other institutions that represent our best chance to build an economy with higher paying jobs and better educated people, where will our children go to earn their degrees? And if we don’t have a core group of community and technical colleges with quality programs that meet the needs of citizens and employers, what will our workforce look like?

 

Most people don’t want to live in a state that cannot provide a base for our future and quality of life. If we severely damage our most critical institutions, we know with certainty our historical out-migration and negative in-migration will continue.

 

Revenue Options

The question of how to protect higher education from cuts in the short-term is, of course, a difficult one. Because of that we believe all options should at the very least be on the table for discussion. This includes:

 

Revisiting “Stelly.”

1. Perhaps the most reasonable approach from a fiscal perspective would be delaying implementation or making some changes in the “Stelly” income tax proposals. A delay in implementation would create a funding bridge to a foreseeable future using revenues that would be recurring for a set period of time determined by the Legislature. It would not be passing a new tax, but delaying implementation of a tax cut. Of course, a permanent suspension of all or some aspects of “Stelly” would create a more stable and predictable recurring revenue stream for higher education and other critical needs such as health care. CABL supports SB 335 which freezes the excess federal itemized personal deduction at current levels.

2. Tax increases. The most visible new tax source that has been suggested is an increase in tobacco taxes. That effort appears stalled at this time, but it is a revenue source that should be considered.

3. Tuition and fee increases. CABL supports the legislation working through the Capitol at this time to allow the various post-secondary systems to increase tuition and fees without legislative approval.

4. Various one-time funds. There are a number of non-recurring revenue sources that could be tapped. Virtually all are problematic in some ways but could be utilized to cushion higher education from this year’s round of budget cuts. They include the mega-fund and the “Rainy Day” fund among others. To be clear, this is not a preferred option without strong assurances that the use of temporary funds would, in fact, be for a temporary period of time to allow for a thoughtful restructuring of higher education. The use of non-recurring revenues cannot be used simply to maintain the status quo until another day of reckoning. They must be utilized to facilitate planning for a post-secondary education system that might be smaller, but one that preserves quality and the delivery of priority services to the citizens of Louisiana.

 

We recognize that most of the revenue options on the table provide only temporary relief. At some point, Louisiana must wake up and realize that the higher education system we will be left with when temporary funding and federal stimulus dollars go away will be a an educational and economic disaster for our state. We must work to find permanent solutions to avoid that kind of calamity. But we can’t assume that will happen.

 

That’s why these temporary revenues must be a bridge to a future for higher education that must be planned strategically and executed by necessity over a period of time.

They must facilitate the restructuring of higher education, allowing this process to proceed without causing permanent harm to institutions and programs that would be considered among the state’s strategic priorities.

 

Conclusion

What we must remember is that if a state is to be a good place to live and work, colleges and universities must be healthy enough to play a significant role in economic diversification and helping to create and retain knowledge-based jobs and support training for our many high-tech industries and critical job sectors.  In order to play that role, our post-secondary institutions need to be seen as a priority.

 

At some point we must ask ourselves if we really want to live in a state where our most promising and motivated young people would have little choice but to go to college or get job training somewhere else. What kind of knowledge-based jobs can we realistically expect to create given the budget scenarios that are unfolding now and in the years ahead? Louisiana needs a statewide voice and vision for post-secondary education based on priorities, performance and potential.

 

That said, we clearly understand that budget cuts are unavoidable. That means it's imperative that the cuts to higher education that do take place are strategic and that we protect our true priorities – the ones that will help define our future.

 

Not all of the options before us now are good ones and following any of the paths we have available will require difficult decisions. But these are extremely challenging times, unlike any Louisiana has seen in decades.

 

We have spent years digging out of a hole that crippled post-secondary education in Louisiana for much of the last 20 years. We cannot afford to turn back the clock again. We need post-secondary institutions that can train and educate our workforce and prepare our citizens for the knowledge-based jobs of the future. We need universities that we do not need to apologize for. And we need a flagship institution that can compete nationally for the best and brightest in our state and anywhere else in the country.

 

That might require some unorthodox things. It might require us to do things we never considered doing in the past. But Louisiana is at a precipice where we are about to make decisions that will impact higher education for most of our lifetimes.

 

We cannot afford to make the wrong choices

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