A Message from the President
March 31, 2011 - Campus Budget Update
Recently Governor Jindal’s administration unveiled the Executive Budget - the recommended operating budget for the State for the upcoming fiscal year.
You will recall from my prior Budget Updates, as well as from our
Budget/GRAD Act sessions last fall, our greatest area of concern
going into next fiscal year is the loss of Federal stimulus funds
that were used to offset or “backfill” a portion of
state funding reductions that occurred over the last two fiscal
years. Federal funds in the current fiscal year for Southeastern
amount to $16.3 million. On top of the loss of $16.2 million in
State support we have already absorbed over the last two years,
loss of these funds next fiscal year would be devastating for our
university.
While the Executive Budget is comprised of a very long and complicated set of documents, and it will be months before we know the final outcome, analysis so far reveals several important factors.
The budget proposes what in general terms can be considered a
“flat” funding level overall for higher education for
next year compared to the current year. This means that the
proposed budget “backfills” the loss of Federal
stimulus funds with funds from other sources. We are certainly
pleased that Governor Jindal’s proposed budget does not
recommend additional cuts for higher education.
Unfortunately, some of the sources of funds used to replace the lost Federal funds are potentially controversial and problematic. Specifically, the proposed budget relies on revenues from a number of unconventional sources which, in most instances, must still be approved by the Legislature.
The budget anticipates three separate actions that would result in
additional self-generated revenues (tuition and fees) to help
higher education maintain the current level of funding.
The first change would allow colleges and universities to charge
for student enrollment above 12 credit hours, up to 15 credit
hours. It is estimated this change could generate approximately $6
to $6.5 million next year for our institution.
The second change would index to increased tuition levels a
previously approved operational fee paid by students. It is
estimated this change could generate nearly $1 million at
Southeastern next year.
Significantly, under the Louisiana Constitution, both of these
proposed changes in tuition and fees will require approval by a 2/3
majority of both Houses of the Legislature. This could be a tough
sell given that last year’s LA GRAD Act Legislation already
created approval to increase tuition annually over the next several
years.
While the Executive Budget appears to count the tuition increase
for next year under the LA GRAD Act, this increase is contingent
upon our meeting the necessary performance objectives stipulated in
our GRAD Act Contract.
In addition to these measures that are specific to higher
education, the Executive Budget includes a number of other
provisions that either reduce costs or increase revenues to help
balance the State budget. Should these proposals not come to
fruition, due to legislative prerogative or otherwise, the final
budget for higher education could be significantly different from
what has been proposed.
For example, the Executive Budget incorporates a proposed change in
the contribution rate by employees to the LASERS retirement system
from 8 to 11 percent. While this proposal does not appear to affect
faculty who are members of TRSL, or the ORP, it would affect many
staff members at Southeastern and other institutions who
participate in the LASERS retirement system.
The Executive Budget also incorporates additional revenues from
various controversial measures that ultimately will have to be
approved by the legislature. The much-publicized proposed
privatization/sale of several State prisons is a good example.
The bottom line for Southeastern, and all of higher education, is
that the final outcome of the budget process is far from certain.
Although the proposed Executive Budget is an important first step,
many extremely important aspects of the budget for next year will
have to play out through the upcoming legislative process that will
not conclude until this summer.
As always, I will continue to keep the campus apprised of
developments as they occur.