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Kennedy: Cuts take toll on higher education

Last Modified: Wednesday, April 17, 2013 11:36 AM

By Lance Traweek / American Press

The state budget isn’t balanced, and there are a “huge number of contingencies,” which are structured to “fall on the backs of higher education,” State Treasurer John Kennedy said Monday.

In 2009, the state budgeted $1.6 billion for higher education. The amount in Gov. Bobby Jindal’s proposed budget for this fiscal year is about $300 million.

“That’s very dramatic,” Kennedy told the American Press editorial board.

He said higher education has decreased from 17 percent to about 4 percent of the state budget. Some of the gap has been filled in with increased tuition over the years, raising tuition 10 percent this year.

“They’ve always been able to get away with that because for the longest time the demand was inelastic,” Kennedy said. “You could keep raising tuition, and the students would keep paying it. It has reached the point now where it has become more elastic. Students are saying, ‘No, I can’t afford it.’ ”

Kennedy calls this a “real concern.”

Kennedy mentioned an outstanding lawsuit regarding tobacco settlement bonds with nonparticipating manufacturers. Nineteen of the states have settled, but most have not. Louisiana’s administration wanted to settle and is counting on a $60 million payment. Kennedy said there is a 60 percent chance Louisiana won’t get the money for a “variety of reasons.”

“That’s already built into the budget,” he said. “If that payment doesn’t show up, higher education will take a midyear budget cut of $60 million.”

With that as an example, Kennedy said he doesn’t recall a budget that has more contingencies being placed on the back of one part of state government — higher education.

He called the budget “risky” and predicted a sixth straight year of midyear budget cuts.

“When you turn to McNeese and say you have to cut $2 million with six months left in the fiscal year, it feels like $4 million and they just don’t have the latitude to do that,” Kennedy said.

The state’s budget is being “gobbled up” by health care, costing the state $9 billion annually, he said.

“Until we get control of our health care spending we’ll continue to have these problems,” Kennedy said, adding that the costs increase each year.

He also said the number of consulting contracts is on the rise — one-time money that needs to be monitored more closely.

“There are thousands of these things,” he said. “There is money to be saved there.”

He’s said he’s not surprised the Legislature took a pass on Jindal’s plan to eliminate the state income tax and switch to a state sales tax base.

He said Jindal needs to “sit down” and focus on how to solve these problems and “consider other points of view.”

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