Budget Update

January 22, 2016
Late yesterday, we received a message from Commissioner of Administration Jay Dardenne letting us know that the state's $750 million budget shortfall in the current year would require a $131 million reduction to higher education. LSU's statewide operations would bear roughly $65 million of that number. We have four days to provide a general plan of how we will respond to the potential cuts. These determinations will be made working collaboratively with campus stakeholders.

Gov. Edwards' plan involves both one-time money and revenues, and if adopted, would avoid mid-year cuts to higher education. Included in his proposed solutions are $128 million in Rainy Day funds, $200 million in one-time BP (non-coastal) funds, and reductions in statutory dedications to "bridge" the budget until more substantive tax reforms can be made.

That brings us to the next fiscal year (FY17), which has an anticipated $1.9 billion shortfall. In our meeting earlier this week, the Governor was both open and frank about the magnitude of the budget situation and has a list of proposals for the legislature to close the long-term as well as short-term gaps. Many of his proposals come from a tax study in which LSU economist James Richardson was heavily involved. It’s unfortunate that Louisiana’s budget is in this condition, but Gov. Edwards remains committed to prioritizing higher education and is putting every funding option on the table in order to avoid cuts.

The last few years have been difficult for LSU and Louisiana higher education. Though it is sometimes hard to remember during such challenging times, it is important to recall that our legislature took difficult steps to maintain higher education’s budget during the most recent legislative session. Gov. Edwards' goal is to permanently stabilize the budget, but this will take time and would require considerable changes to tax codes and budget prioritizations, including dedications.

One of the most common questions we hear during troubling budget times is "what can we do to help?" It’s simple: you can remind your friends, families and communities that LSU isn't just the state's flagship university – it’s key to Louisiana’s progress. We compete in a national marketplace for the best students, faculty, and staff, keeping assets in the state and attracting them from outside our borders. LSU's graduation rate is higher than the national average, and LSU produces national award-winning students. We boast an incredible research portfolio that provides solutions to some of the state's most pressing problems while contributing to the betterment of our society. Our outreach and service touch the far corners of Louisiana, and the economic development we generate through talent and technology builds the state's business community. But to provide all these services and continue in our land-, sea- and space-grant missions, LSU needs the support of its state.

We will continue to work with you, the Governor, the legislature, the business community, and our alumni, friends, and family to help resolve this situation now and for the long term. Remember, these cuts have not yet come to fruition, but the numbers don't lie – we are in for a long legislative season that will generate troubling news stories. I remain confident that we have demonstrated our significant worth to Louisiana and that our state will continue to prioritize our work. We commit to keeping you informed and will post information at www.lsu.edu/budget as it becomes available.

F. King Alexander