SADOW: Higher Education Spending Increases Aren’t What Louisiana Needs

Last year, it worked, but at long-term expense to Louisiana taxpayers. Legislators need to decide more wisely this year when it comes to Louisiana higher education.

With a legal requirement to submit budgetary suggestions, the Louisiana Board of Regents for Higher Education traditionally has launched its annual version well in advance of budget formulation and quite publicly in October or November. In recent years, this typically involves asking for the moon when it appears the state could run a surplus, but then settling for peanuts. In other apparently leaner years, it asks for restoration of recent cuts and some more, and hopes for the best.

But last year, things were different. Backed by $331 million in federal government largesse from Democrats sending the country  much deeper into debt, higher education scored a $175.7 million increase, with more than $80 million coming from the general fund. Unlike every other state agency, almost all higher education funding comes from self-generated funding and the volatile general fund as opposed to dedications, so when it makes ongoing new commitments, it risks not having money available to fund that when budgets become tighter. Worse, higher education has to compete with other parts of government for general fund dollars, agencies less dependent upon these.

Yet that’s what happened, with pay raises and boosting funds for Taylor Opportunity Programs for Students award recipients, plus starting up an unneeded M.J. Foster Scholars Program that does what TOPS does but for junior institution students. Considering the budget in other areas that also depended on one-time money that will leave a structural deficit in the hundreds of millions of dollars – barring more free spending from Washington or unanticipated good revenue news – when these bucks disappear next year, such increases spending betrayed imprudence.

That realization didn’t hit home with the Regents, who queued up a fiscal year 2022-23 increase of $219.5 million in its request, almost half of which would repeat establishing new commitments. It further asks for $200 million in capital outlay from a projected surplus from last year.

Given the unfunded accrued liabilities in the state’s retirement systems and the next installment in flood protection payments owed to the federal government, spending the surplus on anything else would be foolish. And the new commitments it asked only would garnish an already overbuilt system that, at the senior level, has too many institutions chasing too few students. At the very least, it should pursue hikes in fees and tuition (self-generated) if it wants to keep the current inefficient system propped up instead of calling on taxpayers to do it.

The Regents point to their master plan goal of dramatically boosting enrollment to avoid the hard issue of addressing the top-heavy and bloated system, trying to create demand to close tht gap to the oversupply. Setting aside that the plan itself is essentially unrealistic, it also fails to acknowledge a rapidly-evolving trend undoubtedly exacerbated by the Wuhan coronavirus pandemic (that also appears to have damaged permanently this drive to higher enrollment by setting back secondary education achievement and discouraging those graduates of the last two years from enrolling) – distributed learning expansion that makes a system with excess brick and mortar even more obsolete.

Higher education observers received a recent surprise when statistics came out showing that over half its student population two years ago took at least one online course – and this specifically excludes all learning that on an emergency basis shifted online because of the pandemic. More amazingly, two-ninths of all higher education students are enrolled in online-only programs. Undoubtedly these trends have accelerated in the intervening two years.

This should come as no surprise to the Regents. For example, if you were to guess that the institution with the most graduate students in the fall of 2020 was Louisiana State University, the Baton Rouge campus, you’d be wrong. It was in fact my institution, Louisiana State University Shreveport, with such students comprising three-quarters (and three-quarters of them from out of state) of the nearly 10,000 students enrolled leading the way, and the vast majority of them being online-only students. (The 2021 figures aren’t yet official, but LSUS appears to have lost several hundred – no surprise as government began taking boots off the neck of the economy by letting unnecessary restrictions on it lapse – so Baton Rouge may regain its lead).

Legislators should understand that they must not enable such a system in such an environment by throwing more money at it, but that they must encourage it to make changes towards greater efficiency by holding off funding new ongoing monetary commitments and in taking greater care in establishing capital outlay priorities involving higher education. That means rejecting in near totality the forwarded Regents request.

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