Unwrapping the Louisiana Budget Crisis

The Louisiana university and college system is in turmoil. Rumors spread across the state's over 30 campuses this past week that the operating budget for the university system as a whole is on the verge of being cut by anywhere from 40%-60%. Legislators putting a number to the rumors estimated the slash could fall around the $300 million mark over the next two years.

The state will be $1.6 billion under budget in the coming year. Those more familiar to the causes are pointing to Governor Bobby Jindal's reluctance to "touch any measure that could be seen as increasing taxes, plus the impact of slumping oil prices."

Jindal presented his budget for the coming fiscal year (starting July 1) in which he suggested rolling back refundable tax credits that could see the state retaining $526 million. Yet, despite the tax adjustments, the education system is still facing anywhere from a $143 - 211 million reduction in funding.

It is an uncomfortable and uncertain time to be employed by or a student of any university in Louisiana. Furthermore, it is unclear what can be done in the immediate to slow the sinking ship. Many are suggesting ways to cut costs, anywhere from number crunching on the PnL to solutions much more severe.

Unfortunately, no option presents a truly positive solution to the situation. Outsourcing university services is a short term fix that won't solve the problem, while consolidation of the 5 university systems, closing campuses, or eliminating programs that are redundant within the system may potentially have exponential negative consequences.

Jindal himself suggested the state institute an "excellence" fee in which students and families would pay a greater tuition sum, but in return receive a tax benefit for paying the "excellence." The excellence fee is a political maneuver that would shuffle the money from student's pockets to the states, and then reimburse them with an increased tax on cigarettes. Why not simply tax cigarettes to help pay for college? Jindal is looking to avoid the negative press associated with tax increases.

So right about now you're probably asking yourself two questions.

1) How in the world is a broke state cutting education a thing in the United States in 2015?

and

2) What does this have to do with FOOTBAWLL?

Let's start at number 1. From The Times-Picayune:

"The Louisiana constitution protects everything but higher education and health care from the deepest budgets cuts. Every special interest but those two have political power to persuade legislators and the public to give them virtually immunity from devastating cuts."

Well, that seems ridiculous. Beyond what's going on in the immediate, the state has cut the budget for education over the past seven years by 42%. Thus, the response by those picketing on campus as Jindal met with LSU officials this past week seems awfully justified. This has been going on for a while. Those in the know seem to think another major cut or two could cause the system to collapse altogether.

But still, the state is broke. The budget must be cut somewhere, and if by law the only plausible place to cut is education, then I imagine legislators are able to chip away at it with some sort of peace of mind.

As for number 2. Fourteen schools in Louisiana have athletic programs at the NCAA level, four play FBS football. We cover three of them, and you may have heard of LSU somewhere along the way.

You might also be familiar with a story that broke here at Underdog about a recent demolition of the UAB football program.

At the time, I was quite confident in a prediction that UAB would not be the last FBS team to fold. Yes, UAB ending football can be viewed as an isolated incident of sorts, a colossal institution failure. But it remains a microcosm of a greater problem.

Imagine, had UAB been printing money the past decade, would their football team have vanished?

Universities are a function of the state that funds it. Should Louisiana continue to struggle as is expected, the universities will struggle financially as well. Hard choices will be made. Running a division 1 athletic department is a privilege, not a right.

It's almost counterintuitive at first glance. When you think of Louisiana football, you think Death Valley. You think high round draft picks, Les Miles eating grass, and primetime SEC games of the week. Real money makers, yeah?

Well, yeah. But the net revenue from the LSU athletic department isn't nearly enough to keep 13 other athletic departments afloat on its own. Each school must be responsible for itself.

The G5 athletic programs need to find ways to stay on the positive side of the ledger, acting as an asset to the University. If entire colleges are up for consolidation, if universities are closing, sinking money into a football team becomes foolish.

Obviously this is a worst case scenario, but if you appreciate Louisiana G5 football, show them. Go to the games. Bring your friends. Buy as many shirts as you can carry and give them to all your friends for Christmas. Those shirts could soon be out of circulation if you don't.