Louisiana’s budget crisis threatens to cripple years of growth and diversification in the state’s private sector while also derailing recent improvements made in higher education. That was the shared assessment of the three guest speakers at Business Report’s annual Leadership Power Breakfast, held earlier this morning at the Crowne Plaza.
Louisiana Association of Business and Industry President Stephen Waguespack, LSU President F. King Alexander and Louisiana Chemical Association President Dan Borné each began their presentations touting the positive developments made in Louisiana over the past two decades, particularly with respect to the economy and the performance of students. But a state budget shortfall estimated to exceed $1.6 billion and proposed cuts to higher education of more than $360 million threaten to undo all that good news, they said.
“Louisiana has a record-breaking number of workers … the private sector is on the verge of sustainable growth, and we lead the nation in manufacturing growth,” Waguespack told the audience of nearly 500 local business leaders. “The question is where do we go from here? Can we sustain the growth?”
Similarly, Alexander noted that while per-student spending in Louisiana is among the lowest in the nation, LSU’s graduates have among the lowest student debt and some of the highest starting salaries relative to graduates of the nation’s 50 flagship universities.
“That’s what we have been able to accomplish … but now we’re staring down the barrel of a 41% budget cut,” he said. “Right now, a 41% budget reduction would send us reeling backwards.”
Over the past several weeks, Alexander and other higher education leaders have been putting together drastically reduced budgets to prepare for the spending plan the Jindal administration will unveil later this month. Alexander said LSU’s doomsday budget would mean 3,000 fewer courses offered at the Baton Rouge campus next year and the cancellation of all hires made under the new Workforce and Innovation for a Stronger Economy Fund program.
WISE is a much-touted workforce training initiative created last year by the public and private sectors with initial funding of $40 million. Both Waguespack and Alexander said restructuring state spending is one of the keys to at least partially solve the budget crisis.
Waguespack noted that state spending is $9 billion greater today than one decade ago but that more money than ever is diverted to pension costs. He said the state’s pension system needs to be restructured and that higher education officials need more autonomy over their own spending.
“Our budget is tied up in knots,” he said. “We need to make tough changes on structural flaws in our budget.”
Alexander asked the business community to help support higher education leaders and the structural changes they will try to get pushed through the legislature this spring.
“Work with us to give our students the tools they need to succeed,” he said.
—Stephanie Riegel
