The Baton Rouge Area Chamber’s bleak report on Louisiana higher education

The Baton Rouge Area Chamber (BRAC) has issued a new research brief on higher education funding in Louisiana, a damning analysis that demonstrates the willful neglect of higher education by Gov. Bobby Jindal and the Legislature.Screen Shot 2013-05-23 at 9.44.43 PM

Here are some excerpts:

Higher education is critical to economic development, especially as we see global shifts to a knowledge-based economy. Further, it takes talent to breed talent, and it is critical for our higher education institutions to have the funding and latitude necessary to attract and retain talent among their ranks. Unfortunately, Louisiana’s higher education systems are facing a funding crisis, and are not equipped with the mechanisms necessary to fill the gap with self-generated revenue. As such, BRAC maintains its policy position to pursue reforms that return control over tuition and fees to higher education management boards.

Sharp Funding Declines

Since fiscal year (FY) 2008-09, state funding for higher education has decreased by 36.7 percent, a reduction of $570 million, as shown in Figure 1.1. Furthermore, over the same period, mandated costs have increased 26 percent. In FY 2008-09, mandated costs were $428 million, and in FY 2012-13, costs expanded to $607 million.  Louisiana’s higher education system has been kept from the brink through self-generated funding, mainly in the form of tuition and fee increases. The outlook for FY 2013-14 is expected to continue the trend of reductions in state funding and increases in self-generated funding.

These cuts not only make it more difficult to retain talented professors, researchers, and staff, but also put Louisiana further behind our fifteen Southern state peers. As of 2011, Louisiana ranked fifteenth (out of sixteen) among peers in total funding per full-time enrollee (FTE). . . . Total funding for Louisiana students enrolled in four-year universities ($10,867 per FTE) still falls significantly below the Southern average ($14,189 per FTE). Louisiana’s total funding for two-year institutions, such as community colleges, ($5,485 per FTE) is also lower than the Southern average ($6,878 per FTE).

Tuition Controls

While state funding continues its downward trend, Louisiana’s higher education institutions lack autonomy over their tuitions and fees. While the GRAD Act of 2010 (Granting Resources and Autonomies for Diplomas) provided limited tuition and fee autonomy for up to 10 percent increases per year, Louisiana is still the only state that requires a two-thirds vote of the state legislature to approve college tuition increases.

As such, Louisiana’s net tuition and fee revenue per four-year college or university student ranks fifteenth (out of sixteen) compared to Southern peers, as shown in Figure 4. Furthermore, Louisiana’s net tuition and fee revenue ($5,783 per four year FTE) is approximately two-thirds of the Southern average ($8,035 per four-year FTE).Screen Shot 2013-05-23 at 9.46.51 PM

In fact, the highest-ranking Southern state (Delaware) generates almost four times as much revenue from tuition and fees as Louisiana. Louisiana’s two-year academic institutions similarly face low tuition and fee revenues. Louisiana ranks tenth (out of sixteen) in net tuition and fee revenue per two-year college or university ($3,231 per two-year FTE).

Louisiana’s two-year academic institutions similarly face low tuition and fee revenues. Louisiana ranks tenth (out of sixteen) in net tuition and fee revenue per two-year college or university ($3,231 per two-year FTW), and is below the Southern average ($3,291 per two-year FTE).

Impact on Louisiana’s Flagship University

The combined effect of state cuts and lack of tuition control is evident at the flagship university, Louisiana State University (LSU). When compared with other premier public research universities, LSU’s core revenues ($30,500 per FTE) lag significantly behind the average ($56,800 per FTE), as shown in Figure 5.8Screen Shot 2013-05-23 at 9.47.41 PM

Furthermore, LSU’s tuition and fee revenue per pupil for 2011 ($7,000 per FTE) is approximately one third less than the average tuition and fee revenue per pupil ($10,500 per FTE) of top Southern research universities. LSU has the second lowest tuition and fee revenue of the eleven schools. While the average U.S. News and World Report ranking for aspirational peers in 2012 was 51, LSU’s ranking was 134.

Summary of Higher Education Funding Analysis

In an environment with diminishing state funding for higher education, tuition and fees are the primary alternative for higher education funding. One might expect states with strong state support to offer low tuition, and states with minimal state funding to have higher tuition. However, Louisiana exerts price controls over the higher education marketplace because it is the only state where the legislature requires a two-thirds vote to increase tuition and fees. This political handle artificially suppresses tuition at below market rates. The funding framework leaves Louisiana’s higher education system in an uncompetitive financial position. For those desiring to see LSU become a premier public research university, this current funding structure presents a significant challenge.

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5 Responses to The Baton Rouge Area Chamber’s bleak report on Louisiana higher education

  1. Judith says:

    So the Chamber is saying Louisiana families need to pay more in tuition? That doesn’t sound like the best way to get poor kids to attend college. Student educational debt is already at an all-time high and higher than credit card debt.

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    • JMW70710 says:

      If poor kids attend college, who would we have to fill our contractual obligation to the private companies running our prisons?

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  2. earthmother says:

    Destruction of the education sysytem – K-12 and higher ed – is by design, not by accident as a result of “budget woes” also created by design. When decent education becomes available to only the privileged elite, the road to economic success is blocked for the rest. The better to create a third world-type society with a large supply of cheap labor to enhance the lives of the wealthy. Don’t think for moment that any of the disastrous economic policies of this regime have not been carefully scripted and executed – all by design. The agenda is insidious. And very frightening.

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  3. tls0 says:

    So BRAC is shocked, shocked, shocked that the policies of the govermor (tax cuts + higher ed spending cuts) who they supported nearly unanimously (correct me if I am wrong) adversely affect the schools that most of its members attended? Round up the usual suspects.
    Where’s the call to tax themselves? BRAC, BRAC, BRAC…
    If BRAC can’t tell their representatives to ignore Grover pledges and raise the money with taxes, then how about suggesting the state crack open the piggy bank of 8g money currently invested in financial assets like stocks and bonds and invest it directly in students and schools? If education is truly the best investment, let’s find out by taking the money out of stocks and bonds and investing it directly in education. That might buy a few years worth of additional funding, but if it’s truly additional funding, the results might be visible. The bleeding might stop.
    Truly bold, breathtaking, proposals, BRAC, truly bold…
    The BRAC study calls for:
    1. “the reform of TOPS to include de-coupling TOPS awards from tuition cost, raising academic standards, and increasing funding to Go Grants.”
    2. “further study of the program’s [TOPS] use by its original intended target,which was aimed at lower to middle income families.”
    3. “the transfer of tuition and fee authority from the Louisiana Legislature to the state’s higher education management boards.”
    Is that the best you can do, BRAC? Really? Really?
    Decoupling TOPS awards? Earthshaking!
    A study that calls for more study (presumably by the same folks who authored this one) when the one clear conclusion of your study is that there’s not enough money for higher ed? Courageous!
    Transfer tuition and fee authority? Now that’s a battlecry!
    Rearranging deckchairs for the amusement of those seated at the captain’s table–BRAC, you’ve truly outdone yourselves…
    Show me the money! Show some guts! Higher taxes! At least call a spade an earthmoving implement and recommend more revenues from unpopular, or even unspecified, sources.

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