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April 3, 2013

Dr. Nick J. BrunoA message to ULM faculty and staff from ULM President Nick J. Bruno

Dear Colleagues,

I recently received preliminary information from the University of Louisiana System regarding budget information for the upcoming fiscal year. Last week, the university presidents met with UL System President Dr. Sandra Woodley and Commissioner of Higher Education Dr. Jim Purcell to discuss a variety of issues, including budget challenges.

At this time, the governor's budget, beginning July 1, 2013, reflects a reduction of $1,039,071 for ULM. This reduction incorporates the expected increase in tuition of 10% over the year's current rate. In other words—as has been the case over the last several years—while our tuition increases, state reductions have exceeded those additional funds.

In addition, the expected increase in our employee benefits is estimated at $936,287. We will need to address a total reduction of current year funds of approximately $1,975,358. Please know this amount will most likely change as the session progresses.

The governor's budget includes significant funds for higher education that are derived from what has been referred to as "one-time" and "contingency" funds. There are a number of legislators who are opposed to this form of funding.

There is over $489 million in the budget for higher education, which is attributable to the aforementioned funding sources. Therefore, as it is currently proposed, if those funds are not included, the reductions would be taken from higher education.

In the event none of these funds are included, higher education could sustain a 19% reduction. I suspect this will not occur, since a cut of that amount would be unthinkable. The Board of Regents is seeking to spread funds across other budgets so that the reductions are not absorbed by higher education alone.

Since the Legislative session has not yet begun, it is too early to speculate. I will be attending the House Appropriations Committee meeting tomorrow morning, and I will be prepared to discuss our position and answer any questions if called upon.

ULM will continue to move forward and address issues as we confront them. Later this month, we will begin our Strategic Planning process, which is very critical at this time in ULM's history. Everyone on campus will be allowed to provide input during this process and will be kept informed of the progress. The final plan will drive whatever actions we must take to address any fiscal challenges we may face.

We are building an outstanding university as the result of your commitment and hard work. Please know that I share our story and achievements at every opportunity.

As the session progresses, we will continue to share our message: ULM is vitally important to our state and to our region. A number of issues will be addressed in the upcoming legislature this session, and while many may be of interest, it is critical we all remain focused on those that may affect higher education.

You can be assured I will keep you apprised as budgetary information regarding ULM becomes available.

Below this letter is a Council for A Better Louisiana (CABL) wire article that provides a very good overview of the issues expected to be addressed regarding higher education in this Legislative session. Please feel free to email me if you have any questions at any time.

Sincerely,

Dr. Nick J. Bruno
President



The CABL Wire for Thursday, March 28, 2013 to Wednesday, April 03, 2013 - HIGHLIGHTS

Higher Education to Get Plenty of Legislative Attention
This year it looks like higher education is going to be getting a lot of attention on a variety of fronts. Some of it might be good, some might not. The higher education budget will be getting more than the usual amount of scrutiny this year, not only because of the level of spending proposed, but also because of where the revenues come from.

It's a little bit complicated, but understanding just what's going on in higher education funding is important. Broadly speaking, last year's state funding to higher education was about $983 million. This year it's $774 million which amounts to a 21% reduction in state support for higher education.

Now, the administration says that reduction is actually being offset primarily from two different sources: 1) reductions in spending at some state hospitals as a result of privatization efforts, and 2) a funding swap where direct state funding for higher education will be replaced by a $75 million increase in tuition.

But even embedded in that are a number of issues that are causing some concern. The first is that of that $774 million in state support for higher education, only $284 million are coming from what is called "state general funds."

Those are the regular recurring funds that operate much of state government. Most of the rest of that – more than $400 million – is coming from other sources that are either contingent on certain things happening, like $47 million in sales of state property, or from various pools of non-recurring dollars. These sources include things like the settlement from a pharmaceutical lawsuit, a FEMA reimbursement and some unexpended revenues from another department.

That's worrisome in and of itself because for the first time ever a significant amount of the state funding for higher education is coming from revenue sources that may or may not materialize next year and some of which might not even come in this year.

While the administration makes a good point that most of that non-recurring money is at least cash in hand right now and saves higher education from further budget cuts, the long-term support for higher education seems to be placed at somewhat of a risk.

Be that as it may, the whole thing is further complicated by the fact that a group of lawmakers in the House of Representatives – the so-called "fiscal hawks" – have expressed great concern over the use of non-recurring and contingent dollars in the budget.

It's likely they will fight to remove it from the higher education spending plan and perhaps from the entire budget. Simply taking it out of higher education support would result in a 19% cut to colleges and universities, so clearly a lot is at stake in that debate.

Whatever happens, it appears higher education will be in for a roller coaster ride this session with an outcome that, at this point, seems uncertain at best. It's hard to see the Legislature actually enacting an additional budget cut to higher education on top of all the others that have occurred over the last five years.

But after years of slashing state government spending, the options for finding additional dollars grow more and more limited. If there's any silver lining, of sorts, all of the non-recurring dollars included in the entire executive budget are going to higher education, so that at least leaves the door open for lawmakers to spread them around to other agencies and replace them with more stable state general fund support.

Other Issues in Higher Education
If the budget battle wasn't enough, there are a couple other looming issues in higher education that could be large. The two chairs of the Legislature's Education Committees are expected to push major legislation to revise the performance funding components now used by higher education.

The details of that are still pending, but they say they want a greater focus on outcomes particularly with regard to graduation and retention rates. They also want to compare the performance of in-state schools with that of peer institutions across the region to help raise the bar.

Louisiana has already made a rather substantial effort toward increasing performance in those and other areas, but as state funding for higher education has continued decline, some university leaders are wondering how much they can continue to improve performance while budgets continue to be cut, class sizes continue to grow, and schools continue to reduce their course offerings in an effort to save money.

If that legislation passes, though, it could open the door to another discussion about tuition flexibility for institutions with the aim of making the pricing of a college education more market-driven and better aligned with the actual costs of operating various degree programs. It could also ignite yet another debate about TOPS and how that program enters into the funding equation.

However all that goes, debate about the role of higher education in our state is healthy, especially if it helps focus attention on the priority it needs to be. With recent announcements about large-scale industrial expansions in Louisiana and new technology firms moving into the state, we should recognize the critical need for a more skilled and educated workforce. We won't be able to provide that without a robust and vibrant postsecondary education system.

We could, perhaps, move closer to that if we had a forward-looking and well-articulated vision of higher education for Louisiana over the next decade. Not one that comes from the universities, but one that expresses what our state leaders want out of higher education and the steps they will take to support it and make it happen. If we can get that alone, it would be an accomplishment.