Can a new collaborative get buy-in on a sustainable strategy for Louisiana’s colleges and universities?

(Photography by Brian Baiamonte: Joe Rallo)

The academic, business and nonprofit representatives assembled to discuss the future of higher education listened as higher ed commissioner Joseph Rallo rattled off a series of numbers that were no less grim for being all too familiar.

In 2008, Louisiana’s budget for higher education was about $1.5 billion. Five years later, by Rallo’s calculation, that total had been cut in half.

As the most recent legislative session began, Gov. Bobby Jindal’s initial budget request for higher ed was $123 million, Rallo says, reiterating to Business Report what he told the Higher Education Stakeholder Collaborative. In other words, Jindal followed up five straight years of cuts by asking to slash another 82% from the previous year’s $750 million.

That scenario was perhaps 45 minutes and one SAVE Act from becoming reality before lawmakers ratified a new budget on the session’s last day, Rallo says. And it’s one that college and university leaders and supporters would rather not re-enact.

“We’re appreciative to the legislators for their support,” he adds. “[But] nothing has changed in how higher ed is funded, in terms of stability and certainty.”

The Board of Regents put together the unprecedented collaborative, which included the college and university system heads and representatives from Louisiana Economic Development, the Louisiana Association of Business and Industry, Greater New Orleans Inc. (standing in for all of the state’s chambers), the Committee of 100, the Louisiana Workforce Commission, the Workforce Investment Council, Blueprint Louisiana, the Louisiana Budget Project, the Council for a Better Louisiana and the Public Affairs Research Council.

“Everybody recognizes that the status quo’s untenable,” says Louisiana Budget Project Director Jan Moller. “It was a very useful exercise to get everyone around the table.”

The group held meetings over several months to create a higher ed agenda to present to the next governor, says Regents board member Richard Lipsey, chairman of wholesale firearms distributor Lipsey’s. He says they met with each of the four top candidates, and after the primary, they invited John Bel Edwards and David Vitter to meet again, although only one of the two accepted.

“You can imagine which one did and which one did not,” says Lipsey, who served on Edwards’ transition team.

The collaborative produced a “strategic impact report” organized around three key themes: economic development, innovation and promoting the value of education. “Elevate Louisiana! Educate & Innovate” was declared the new tagline for higher ed.

“Louisiana, by and large, does not value higher education,” Rallo says. “Many people view going to college as a private good. … We are trying to focus on the economic impact of our graduates. They’re the ones that take the jobs, pay the taxes and create new wealth.”

The report lacks specific goals and metrics. According to one participant, that’s because the central conflict was never resolved: Yes, higher education needs more stable funding, but what sorts of reforms and accountability measures are institutions willing to accept in exchange for more money?

“The real goal was to try and get together a set of recommendations for the next governor that would be agreed to by everybody in the collaborative,” the participant says. “That did not happen.”

But Rallo says the conversation continues with higher ed CFOs and presidents, and says specific proposals that tie funding to performance should be ready for potential Board of Regents approval by March. He says money will be divvied up into three pots: one for two-year schools, one for four-year schools, and one for institutions that don’t have students, such as the Pennington Biomedical Research Center. Mission-appropriate accountability measures will be developed for each group, he says.

Making colleges and universities more responsive to workforce needs is a major theme for the collaborative, and the foremost concern for Mike Olivier, CEO of “statewide business roundtable” Committee of 100. He says higher education leaders understand the need to change how they operate.

Rallo agrees change is needed. But he says the meetings also were an opportunity to dispel the myth that universities are bloated and inefficient. Some 4,500 employees have been lost, he says, and scores of programs have been eliminated. He also talked about the high cost of unfunded mandates imposed by state lawmakers.

Reducing duplication is an ongoing process, Rallo says, and preserving access for Louisiana’s citizens must be taken into account. While critics say the state has too many colleges and universities, Rallo says competition is a good thing, and it’s important to remember that regional universities are important pipelines for filling crucial jobs such as nurses and teachers. Louisiana needs more college graduates, not fewer, he adds.

Several collaborative participants expect the GRAD Act will be allowed to expire this year. The act was meant to move the state from a purely enrollment-based funding model to one with performance incentives. But “we have taken a big slide back” toward the old system, says PAR President Robert Travis Scott, thanks to reduced state funding, lower admission standards and the SAVE Act, which dedicates state spending based on enrollment.

An additional $154 million for higher ed, which would get Louisiana to 80% of the Southern regional average, might be a realistic goal to shoot for in future years, says CABL President and CEO Barry Erwin. Any new dollars could be tied to performance metrics. Edwards has said he wants taxpayers to pay half of the costs of higher education, with students covering the other half, but Erwin says the amount of new money needed to achieve a 50/50 funding split is “really huge.” Today, students bear 75% of the cost, compared to 25% in 2008, Rallo says.

Erwin says the state’s current revenue picture may be even uglier than most people realize, so avoiding further cuts to higher education might be the best that can be hoped for right now. If there’s one thing that everyone in the collaborative agrees on, it’s that Louisiana’s perpetual budget crisis isn’t good for anyone.

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