The president of Louisiana State University announced that he had started planning for “financial exigency.” This follows that state’s governor’s call for major cuts to public higher education, which I noted two months ago.
Louisiana’s flagship university began putting together the paperwork for declaring financial exigency this week when the Legislature appeared to make little progress on finding a state budget solution, according to F. King Alexander, president and chancellor of LSU.
“We don’t say that to scare people,” he said. “Basically, it is how we are going to survive.”
Other Louisiana public campuses might do this as well:
[Sandra Woodley, president of the University of Louisiana system] said several of her campuses — though she would not specifically mention which ones — would have to file for financial exigency if no additional state funding is found.
The Times-Picayune explains what this means:
Being in a state of financial exigency means a university’s funding situation is so difficult that the viability of the entire institution is threatened. The status makes it easier for public colleges to shut down programs and lay off tenured faculty, but it also tarnishes the school’s reputation, making it harder to recruit faculty and students.
“shut down programs and lay off tenured faculty”: yes, exigency makes it easier to perform a queen sacrifice.
Here’s the magnitude of possible state funding reductions: “Louisiana’s higher education community is facing an 82 percent funding cut if no extra state money is found.” [emphasis added]
This follows a ratings downgrade by Moody’s, from “positive” to “stable”. Where did this come from? An assessment of
limited prospects for sustained revenue growth due to potential reductions in state operating funding, tight state control of tuition pricing, and pricing sensitivity limiting out-of-state enrollment revenue growth…
Offsetting factors include material declines in state operating support, with a large and increasing share of revenue dedicated to pay growing pension and Other Post-Employment Benefits (OPEB) commitments.
Note that Moody’s doesn’t see increased state support as a potential reason for possible optimism in the future.
Cathy Yang offers an interesting take on this:
That would not be a crazy move for Louisiana politics.
What does this tell us? At the very least this year’s multi-state move to seriously cut public higher education funding is pressing those universities fiercely. Last week we saw the University of Wisconsin-Madison announce plans for serious faculty, staff, and program cuts. If these cuts or some remnant of them take effect, this represents another ratcheting down of American public tertiary education.
Note, too, Moody’s assessment. Yes, take it with a huge grain of salt, but the details they drew attention to are not fantasies: growing retirement obligations; declining state support; controls on tuition hikes. Perhaps this exigency call is a move to get the latter lifted, so LSU and other state schools can boost tuition on out of state students, as Wisconsin’s doing. Plus charging in-state students more.
What do you think?
(thanks to Chris Lott for the pointer)