2/8/14

ULM and Its Reaction to the Collapse of Louisiana Government Revenue

Or…

North of Exit 80: Observations on Higher Education in Northern Louisiana with Comments on Causes of and Responses to

Budget Problems

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2009: Initial Crisis

2009 was at the low point of the Financial Industry Debacle. Financial Engineering of “sub-prime” house mortgages did

nothing to limit risk. People and governments didn’t understand this. House prices go up %10 to %20 per year forever. Really!

Well, Wall Street and AIG thought so, too. … as did the Federal Reserve and the Treasury. Everyone lost a lot of money in the end, but increased their

budgets in the interim using housing debt as the engine. Unemployment spiked and Louisiana State Tax Revenue declined. This decline was worsened by a non-revenue-neutral tax repeal

of the Stelly Tax. This blew a bigger hole in the budget – nearly a half billion dollars a year.

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2009: Initial Crisis

Louisiana law and constitution left Health and Higher-Ed to take the cuts to balance the budget. There was concern that budget cuts could be as much as

$6 million dollars. The actual cuts were $27 million in real, inflation adjusted terms over the next 6 years.

For example, ULM can no longer provide students the opportunity to study and gain a degree in: Chemistry, Physics, Sociology, Laboratory Medical Science.

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2010-12: Chronic Situation

2010 –Federal Stimulus Starts Paying. The Federal Stimulus Plan started paying money to the States to

lessen the impact of the 2009 crisis. This helped, but it didn’t cure the overspending headache and avarice of the 2000’s. Louisiana didn’t participate to any great extent, but it still suffered from the effects of the ‘disease’.

Louisiana Legislature Passes the GRAD Act. We were promised help, funding, and tuition relief if we could meet the

requirements of the GRAD Act. For example, ULM met these requirements:

increased our retention rate. increased our graduation rates ( 30% to 38%). eliminated low-completer programs (this means Chemistry, etc.)

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Personnel Reductions 6

From Pres. Bruno’s State of The University Address

La. State Expenditures by Area 2008-09.

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Source: FY 2008-09 La. State Budget

La. State Expenditures by Area 2011-12.

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Total: $25.4 Billion FY 2011-12

Source: FY 2011-12 La. State Budget

Five Year Tax Comparison 2008-12

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Source: FY 2011-12 La. State Budget

FY08 FY09 FY10 FY11 FY12

Total Col.

$9,133 M

$8,481M

$6,962 M

$7,017 M

$7,153 M

Five Year Tax Comparison 2008-12

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Source: FY 2008-12 La. State Budget

Five Year Tax Comparison 2007-12

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Source: FY 2008-12 La. State Budget

The Take-away12

Source: FY 2008-12 La. State Budget

Overall Higher Ed revenues have declined:• due to economic conditions,• due to non-revenue neutral tax

reductions,• due to unfunded mandates such

as retirement, health insurance, etc.,• and no increases to offset

changes in the cost of living.

The Take-away (con’t)13

Source: FY 2008-12 La. State Budget

Higher Ed increased tuition, but these increases have been taken by further cuts in State funding. This has had the effects of:• Students per class have doubled in

cases, • Professor and Instructor positions are

reduced resulting in more students for fewer teachers.

• Fewer sections for students,• Less individual attention,So, the Higher Ed public service mission has suffered.

ULM Efforts ULM has just completed an internal

reorganization from five Colleges to three. We are also working to become a larger, better

recognized online and remote learning provider. The ULM Faculty and Staff Senates have been

working with Northern and Central Louisiana Interfaith to change the public discourse on higher education in northeast Louisiana.

We have begun a cooperative effort with Interfaith, Grambling State University, Louisiana Tech University, Louisiana Delta Community College, local and state officials to better inform our State on the necessity of proper fund for Higher Education in Louisiana.

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Northern and Central Louisiana Interfaith Started in Monroe in1998. A broad-based coalition of 60 member

institutions in Alexandria/Pineville, Lake Providence/Tallulah, Monroe/Ouachita Parish and Shreveport/Bossier.

Affiliated as Together Louisiana with Together Baton Rouge and The Jeremiah Group in New Orleans, (approx. 200 members statewide).

Industrial Areas Foundation (IAF) – the oldest and largest community organizing institute in the country.

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Northern and Central Louisiana Interfaith (cont.)

Key role in the movement which derailed the tax swap proposal in 2013.

Led a campaign which resulted in an open public forum about the transition of the public hospitals.

Emphatically non-partisan, political organizations.

Do not endorse political parties or candidates.

Do not solicit or accept money from government officials, office seekers or political parties.

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REGIONAL ACTION - PRE- LEGISLATIVE SESSION

Thursday, February13 - SUMMIT ON HIGHER EDUCATION AND WORKFORCE – ULM SUB 2nd Floor, 2:30 – 4:30p

A public conversation with Legislators about Higher Education and Community priorities for the development of Human Capital in Louisiana

Organized by NCLI with the senates from ULM, LaTech, GSU and LDCC

Dr. Sandra Woodley, ULS System President to present WISE Plan.

Q & A w NeLA Senators and Representatives and Institution Presidents

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