NSU, Fletcher anticipating new cuts

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Local higher education leaders are once again fretting Louisiana’s legislative session, as another massive reduction in state funding to higher education could mean reductions in programs and services at both Nicholls State University and Fletcher Technical Community College.

Nicholls President Stephen Hulbert declined to elaborate on the “specific or theoretical” effects stemming from what could become the latest reduction in a recurring string of diminutions. The university estimated it could lose up to $7.7 million if the state’s budget isn’t altered.

“We don’t have answers,” Hulbert said. “Any (cuts) that are accumulated beyond this point this year are going to have a dramatic impact.”

The Louisiana Legislature and Gov. Bobby Jindal’s administration are currently tasked with cutting $267.7 million from the state’s 2013 budget, after legislators successfully opposed filling the budget gaps with non-recurring funds, colloquially referred to as one-time dollars.

Roughly two-thirds of the state’s operating budget is protected from cuts due to constitutional or statutory edicts, dedications, federal mandates and other obligations. Higher education and health care are not protected, so the state’s lawmakers and administration frequent those wells quite often.

The latest prospective cut to higher education is included in House Bill 1, the Louisiana Legislature’s budget bill.

State support to Nicholls declined from $35.8 million in 2008 to $22.3 million in 2012, a 38 percent cut. In addition to $13 million in losses, state mandated costs, such as payments into the state’s retirement system, have risen about $4 million over the same period.

The university boosted its revenue by $9 million over that time due to tuition increases – which will continue to rise under authority of the Grad acts –and the university’s net loss is roughly $7 million.

Nicholls has eliminated 101 positions, seven academic programs and four concentrations since 2008. The university has also frozen salaries and restricted travel allotments and supply purchases.

Hulbert said the university has trimmed all excess and has whittled its travel and supply funds to an extent where officials can no longer turn to those areas for relief. Outside of making a commitment to protect academic programs, Hulbert was mum on what actions the university would take if the latest panic comes to fruition.

The university could be forced to again enlarge class sizes, as some teaching positions would likely be cut through attrition. Student services may also be scaled back further.

“We are getting to the point that we do not have alternatives, except for addressing services we provide at the institution,” Hulbert said.

Prior to the blockage of using one-time dollars, Hulbert said the university was eyeing cuts in the neighborhood of $4 million.

Nicholls is one of nine institutions that operates under the University of Louisiana System. If the budget bill passes as constituted, the UL system stands to lose $105.7 million in state funding. If this happens, the total state cuts since 2008-09 would be $293 million, according to the UL System President Randy Moffett.

“Over the last couple of days you have heard from our university presidents calling these proposed cuts ‘catastrophic’ and ‘devastating.’ They are not exaggerating,” Moffett said. “If nothing is done, we are facing a very real possibility of several campuses declaring financial exigency, which is a measure of last resort.”

Fletcher is anticipating a net loss of $325,654 toward its 2013 fiscal year budget, according to Bryan Glatter, vice chancellor of finance and administration.

“With the additional staff and services needed for the new campus opening in August with an anticipated enrollment growth of 10-20 percent, the proposed budget reduction may reduce the college’s ability to maintain our current scope of programs and services for the students,” Glatter said via email.

Fletcher’s state funding would decrease by $950,000, which is mostly offset through self-generated income. The college has saved and now is deploying a one-time lump sum of $500,000 – which is also included in the net change– for furniture and supplies in conjunction with the opening of its new campus.

Fletcher’s operations budget was $8.2 million in 2011-12. Of that total, 67.2 percent was self-generated income. The anticipated budget, prior to the state budget being finalized, is roughly $7.9 million.

The cuts on the table are fluid as the highly political process continues to unfold. The issue at hand is framed as one-time money being a safeguard against continued losses to higher education and health care, but a local representative said there is extraneous spending elsewhere that could be cut.

In summary, H.B. 1 does not include the use of one-time funds, but H.B. 822, which passed the House last week, gives the state authority to put the non-recurring revenue back into the general fund. Both bills are in the Senate.

State Rep. Jerome “Dee” Richard, I-Thibodaux, opposed the use of one-time money (H.B. 822) and did not vote on the budget bill (H.B. 1).

Richard said the use of one-time monies, such as revenue from state-asset sales, as short-term stopgaps that encourage spending beyond the state’s means.

“I was not elected to keep spending money that we don’t have,” Richard said. “I was elected to balance the budget and do what’s right for the state – not just my region, but for the state.”

Richard said he expects the state Senate to restore one-time money into the general fund, thereby reducing the proposed cuts, including those to higher education.

“It’s easy to do,” Richard said. “The one-time funds are there and all they have to do is stick out their hands, get it and put it back in the budget. It’s not hard to do it all.”

The Thibodaux lawmaker said the cuts could be feasibly compensated for with reductions in state contracts and personnel, echoing state Treasurer John Kennedy’s letter to the administration last week.

Richard is sponsoring two bills that offer intermediate solutions. H.B. 327 and H.B. 328 aim to curtail state spending. Both passed the House and are awaiting action in the Senate.

H.B. 327 calls for a 10 percent reduction of all state professional, personal and consulting service contracts.

H.B. 328 calls for the executive branch to reduce the number of employment positions by 5,000 for each of three successive years through attrition, beginning with the current budget, and to reduce personnel expenditures by $500 million by the 2015-16 fiscal year.

H.B. 1 passed the House on May 14. It awaits action by the Senate Finance Committee after hours of public testimony Saturday that put faces and personal anecdotes to the cuts.

“I believe the Senate and the House, through conversation with the administration, is going to step up and mitigate these cuts,” Hulbert said. “At some point in time, you are going to bleed universities and public hospitals dry.”

Nicholls State President Stephen Hulbert speaks to students at budget cuts town hall meeting.