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Photo caption: LSU’s Memorial Tower displays the time on Monday, March 20, 2023, on Tower Drive in Baton Rouge. Photo courtesy Matthew Perschall for Louisiana Illuminator.
Both sprawling, public land-grant flagship universities in two of the poorest states in the nation, Louisiana State University and West Virginia University are more similar than you’d think.
It’s why higher education observers in Louisiana are watching the slashing of WVU’s budget with trepidation.
Faced with a budget crisis caused by declining enrollment and a lack of state investment in higher education — both problems Louisiana’s public universities are familiar with — West Virginia University leaders have marked 32 majors for elimination and recommended cuts to other programs.
Louisiana universities are no stranger to such crises. What’s unfolding at WVU is reminiscent of what higher education institutions in the state went through during a budget crisis during former Gov. Bobby Jindal’s administration.
During his two terms in office, Jindal frequently tapped one-time funds for recurring government expenses as means of balancing the budget. He also took an anti-tax hardline at at a time when oil and gas severance revenues, the state’s longtime fiscal staple, tapered off.
But the budget problems faced by WVU are attributed to problems higher education is experiencing across the country and might be compounded in Louisiana if a temporary state sales tax expires as scheduled in midyear 2025.
Looking back
The Jindal era was a constantly evolving, chaotic period in Louisiana higher education. The state was in a self-inflicted budget crisis, and higher education was on the chopping block annually.
The worst of the budget crisis, which was brought on by large corporate tax cuts and industry subsidies, happened between 2012-2016.
Higher education and health care are the only two large portions of the state budget without constitutional or statutory protection, meaning they are the first to get axed when there’s a budget shortfall in Louisiana.
Predictions were catastrophic, to the tune of hundreds of millions to be slashed from university budgets. The reality was less ruinous, although still devastating.
Kevin Cope, an English professor who served as a member of LSU’s Budget Crisis Committee, which in the early 2010s began looking at ways to save money for the university, recalled at one point being asked to prepare for cuts of 38%.
“The budget situation was so fluid and so politicized that we, the budget committee, were working multi-hour shifts, multi-day shifts … to contrive scenario after scenario as the political scene changed and the story coming out of the Capitol also changed,” Cope said.
The budget reductions were not as severe as predicted but still among the worst in history. State aid to higher education was reduced more than 55%, leaving a hole in the budget that had to be mended with increased tuition and fees, which climbed at some campuses more than 100%.
If the worst-case scenario had been realized, the devastating budget cuts that consolidated and trimmed academic programs would have looked more like the dismantling of the state’s flagship university — much like the scenario unfolding in West Virginia.
Real time
A key difference between WVU’s present and LSU’s past is that West Virginia — for better or worse — is proactively cutting the budget to prepare for an expected crisis rather than reacting in real time.
The decision has been criticized by faculty who feel the university is not doing enough to save their jobs and departments. Others praise it as a prudent choice.
An enrollment decline that existed before the pandemic, and was exacerbated by it, is shrinking the university to an unsustainable point. The Morgantown campus predicts a 5,000-student decline over the next decade. The school currently enrolls about 26,000, The Register-Herald reports.
Further declines driven by low birthrates after the 2008 global financial crisis are expected as those recession babies start to reach college age in the next few years.
WVU’s dropping enrollment has been made worse by shrinking state investment. State higher education funding has decreased 24.3% over the past 10 years, according to the West Virginia Center on Budget and Policy. If state investments remained the same as a decade ago, WVU would have received $154.1 million from the general fund in fiscal year 2024, compared with the $116.5 million it actually received.
While not enough to cover the immediate $45 million shortfall, the $37.6 million difference could have greatly limited the severity of the crisis.
More than one cliff
The problems WVU is tackling are absolutely coming for other flagship universities, experts predict.
Tom Harnisch, vice president for government relations at the State Higher Education Executive Officers Association, an organization that works with university and system leaders, told news organization Inside Higher Ed he expects more flagships will follow in WVU’s footsteps.
“Flagships are not immune to these challenges … Even the big institutions are going to have to get smaller,” Harnisch said. “It’s just a reflection of a new reality.”
LSU so far has been immune from declining enrollment trends. Except for drops between 2016 and 2018, the university has been on an upward trend of enrollment since 2010. That fall, the school enrolled 28,771 students. In fall 2022, the student body totaled 34,483.
But those numbers can easily shift again.
Louisiana’s population is shrinking and its birth rate is declining.
According to Carleton College professor Nathan Grawe, Louisiana is projected to experience a 7.5% to 15% decline in college-going students by 2029, Public Affairs Research Council detailed in a report on falling enrollment in Louisiana earlier this year.
What’s worse is that Louisiana might face another budget problem if a temporary 0.45% sales tax is allowed to expire in 2025.
Economists forecast it will lead to a $400 million shortfall for the state budget. State lawmakers could respond by extending the temporary sales tax, which some leaders, including some candidates for governor, oppose.
Others, including current Gov. John Bel Edwards and his budget chief Jay Dardenne, are optimistic the economy will grow enough to make extending the sales tax unnecessary. But the state’s Revenue Estimating Conference already bakes economic forecasts into its revenue projections, Steven Procopio, head of the nonpartisan policy group Public Affairs Research Council, pointed out, meaning official forecasts predict the shortfall despite anticipated economic growth.
But a $400 million budget hole would likely mean significant cuts to higher education and health care.
If Louisiana were to go off two cliffs at once — enrollment and fiscal — it could mean another disaster.
“I am definitely worried about the double impact,” Procopio said.
That disaster could be mitigated by another increase in tuition and fees. But that also could mean Louisiana students, who come from homes with some of the lowest household incomes in the nation, opt to bypass college if the TOPS scholarship doesn’t cover enough of their costs.
While experts agree that now is the time for action, the right answer isn’t easy to find.
Jim Henderson, president of the University of Louisiana System, which educates over 90,000 students, said Louisiana can mitigate the enrollment decline, which he believes to be overstated, by reaching more nontraditional students.
“If we’re smart, systemically and institutionally, we’re changing processes and changing focus so that we’re meeting the available students … and that blue ocean, if you will, of a market that can mitigate any traditional market fall off,” Henderson said.
The Board of Regents, which oversees higher education in Louisiana, also takes the position that the national enrollment cliff won’t hit Louisiana as hard.
Procopio was skeptical, pointing out that enrollment in K-12 schools has also declined, and those numbers will eventually be reflected at colleges and universities.
It will be hard for traditional four-year institutions to reel in nontraditional students without a shift in focus, Procopio said.
He said higher education institutions should act as if the enrollment decline and the fiscal cliff are set in stone. While that might not mean extreme budget cuts like those at WVU, Procopio advises getting expenses off the books and putting off academic program expansions.
If universities have to end up making cuts, it may be best to start now, Procopio said, so it’s a smoother landing for faculty and staff.
Cope, one of just two members of LSU’s Budget Crisis Committee still at the university, is also worried such troubles are coming for the school again — and fears the university and state leaders have not learned from the past. This is, in part, because the university has not retained many administrators who were there during the budget crisis, he said, but he also attributes it to the chaos of Jindal’s tenure.
“In order to learn a lesson, the phenomenon that you’re studying needs to be coherent, rational and predictable,” Cope said. “The behavior of the legislature and vacillations of the budget, the circumstances were completely unpredictable.”
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English (US)