SADOW: The Real Cuts, And Real Changes, In Higher Ed Are Coming

With a revenue gap now forecast to top over $1 billion for fiscal year 2014, once again higher education in Louisiana finds itself on the front lines in any budget balancing exercise. And this time, tinkering at the margins – the past response to a largely nonexistent perceived calamitous situation – probably won’t be good enough.

One drumbeat of opinion that will be relentlessly propagated by some in the upcoming debate is that Louisiana higher education has suffered horribly as result of fiscal retrenchment in recent years, necessitating that existing levels of funding be maintained, if not increasing them that require additional revenues on way or the other. This view ignores the facts surrounding actual higher education spending in Louisiana.

Six months after Gov. Kathleen Blanco took office in 2004, in that fiscal year the state spent about $2.342 billion on higher education, serving (by the fall headcount) 214,144 students, of which 29 percent was self-generated (most of this being tuition and fees), or a per-student cost of $10,937 ($7,765 to taxpayers). Four years later, a half-year after Gov.Bobby Jindal recited the oath of office for the first time, $2.878 billionwas spent (25.9 percent self-generated) on 207,760 students, or a per-student cost of $13,853 ($10,265 to taxpayers). Then, last completed fiscal year, $3.012 billion (37.5 percent self-generated) paid for 225,835 students, or a per-student cost of $13,337 ($8,336 to taxpayers).

In other words, for a student population that has increased 5.5 percent since right before the hurricane disasters of 2005, spending per student has gone up overall 21.9 percent, and the taxpayers’ portion has increased 7.4 percent. Even in FY2008 at the peak of per-student spending as the Katrina fiscal bonus kicked in, total spending today still is 4.7 percent higher while per-student spending decreased a marginal 3.7 percent. Preliminary 2012 numbers of 222,681 students with spending of $2.912 billion, 40.5 percent self-generated, or $13,077 total per-student of which taxpayers picked up $7,781, don’t appear materially different.

To restate, to educate a few thousand more students than eight years ago there currently is spent almost $700 million more annually. On a per-student basis Louisiana pays about the same as it did then for hardly any more students educated now. But per-student spending actually has increased by almost a fifth because of increases in tuition and fees. The narrative that there have been dramatic cuts to higher education in Louisiana is a myth – to date.

Nonetheless, the changing revenue mix has prompted some efficiency introduced into higher education offerings. But they have been marginal – program reductions and consolidations, slowdowns in hiring, changing delivery to encourage degree completion, and minor merging of delivery systems and back-office functions. They have not been where real savings can occur.

Real savings occur when duplicative systems get consolidated, with school mergers that make sense, with shedding baccalaureate-and-above institutions in favor of community colleges where appropriate, and with inefficient fiscal practices forced onto systems by law getting dismantled. Besides some shuffling within systems and minor, largely unhelpful consolidations of community colleges, almost none of this has been pursued.

Tuition has increased, but without other changes to make the use of its fruits more rational, including essentially free education over a certain minimal amount. Systems mergers have gone nowhere, and when a rational merger was scuttled, the next effort wasted energy on a failed nonsensical one. If major dollars are to be saved, many things previously rejected will have to be revisited and implemented.

Because with the impending deficit, the myth of gravely suffering higher education in Louisiana actually may come into reality. Only meaningful structural and cultural changes in how Louisiana higher education is delivered can produce the efficiencies (keep in mind that Louisiana still ranks in the top ten of all states per capita in state spending on higher education) necessary for the system to work well, and only some of them can promise immediate savings. Whether the incipient crisis will provide enough motivation to higher education and elected officials finally to get these things implemented is another matter.

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