SADOW: Higher Education Is The First Hog At John Bel’s Budget Surplus Trough

Now that it’s been fattened with excess taxpayer largesse, the first stab at Louisiana’s fatted calf has occurred, from the state’s higher education institutions following a flawed master plan.

At its meeting last week, the Louisiana Board of Regents for Higher Education expressed its desire to grab over two fiscal years for itself more than $300 million of a projected $534.8 million surplus. It wants $155.6 million to increase operational spending, or about a 15 percent increase in discretionary funding over this year’s fiscal year 2020 budget for FY 2021. Additionally, it petitioned for $150 million in capital outlay spending from the nearly $350 million potentially available for that purpose from the FY 2019 surplus, to address a wish list of $1.5 billion.

Specifically, the Board wants $36.3 million to raise faculty salaries to the southern regional average, $34 million for GO Grants to increase need-based student aid which more than doubles that, $9 million to fund fully Taylor Opportunity Program for Students merit aid, $28.7 million to reward schools for improving student outcomes, and $18.3 million to cover mandated expenses such as rising health insurance and retirement costs. This would add on to the $47 million taxpayer boost from this fiscal year.

The wrongheadedness from some of these requests leaps out. TOPS barely qualifies as a merit program, having such low standards, so, if anything, since in essence it already has so much of a need-based component money should be redirected from TOPS to GO Grants by raising TOPS standards and sending some of the savings to GO Grants. Consider also the larger picture in that Louisiana taxpayers already fund higher education per capita at the national average (and higher than in the south), but it charges below-average tuition. More money for higher education should come from students paying their fair share, not from overburdened taxpayers.

And, reviewing the condition of Louisiana higher education overall, it remains too overbuilt with too few students chasing too many senior institutions. Rather than soak up money to support the bloated system – which the master plan attempts to justify by reversing past reforms that disallowed most remedial education from occurring at universities and in its idea to enroll many more adults despite their lack of preparation at the elementary and secondary level that threatens programmatic integrity and standards – the Regents should take the lead in suggesting merging and demotion of select senior institutions.

However, in the largest sense the Regents’ request represents the initial salvo in trying to normalize the sales tax increases of 2016-18, although temporary and intended only as a bridge to fiscal reform. It doesn’t recognize that three straight years of record surpluses indicate over-taxation and the tax increases to get there undermine the very ability of the state’s economy to sustain in the long run an adequate revenue stream to support higher education.

Indeed, given the results of legislative elections this month, chances are good that policy-makers will roll back some or all of the sales tax increases starting next fiscal year. How runoff elections next month resolve could make this a virtual certainty.

But until the 2020 legislative regular session commences, look for all sorts of increased funding pleas to come out of the state government woodwork (with the monster in the room, Medicaid expansion, devouring everything in sight) in a feeding frenzy, with the goal of grafting the tax increase receipts onto engorged government to make these a permanent feature in one form or another. The Regents request becomes another bullet in the chamber of weaponry to rationalize the permanency of the tax increases, rather than pursue rightfully returning to the people their money.

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