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.
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).
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).
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 5.8
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.
- How low can we go? Louisiana higher education leaders decry deep budget cuts (bobmannblog.com)
- LSU fee bill advances, other tuition bills linger (sfgate.com)
- They can’t handle the truth: Why the LSU Board won’t let Fred Cerise testify before the Legislature (bobmannblog.com)
- Bill would allow colleges to set their own tuition (sfgate.com)