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Financial Challenges

To: The Nicholls Community

Two weeks ago, I shared summary information on the damage that would be caused to Nicholls State University by either an additional 28.5% or 15.8% reduction in state funding.

While I believe that it is unlikely that these draconian reductions will become a reality, I do believe that some additional cuts may well lie ahead.  Since reductions of any magnitude, if spread “evenly” throughout all units and disciplines, would be damaging to the entire university, areas considered must be those which, although a major element of the university, are not part of the core mission of Nicholls.  We must protect, as much as possible, the disciplines and service units that have made Nicholls the viable institution for this region that it has been for many years.  These include those that contribute to our status as SREB 4-Year IV institution, our general education core and the disciplines that are the major source of an educated workforce in this region.  However, please know that should further budget reductions becoming necessary, the Nicholls community will be involved in any necessary planning once any actual decrease is known.

I will continue to inform the university community of the situation as it changes.  To assist in that communication effort, we have set up a site linked to our Nicholls Web Site which will allow questions and comments from the Nicholls community.  Community members can get to “Your Questions Answered” through the Nicholls Homepage, under Administration and Faculty; University Administrators; President; Your Questions Answered or directly through the link http://www.nicholls.edu/president/your-questions-answered. The answer to your question will be posted on this link for all to see.

Below are some key “Talking Points” that community members may want to include in any oral or written communication regarding budget cuts.  We have included the contact information for the local legislators and the governor as well as how to get the contact information for any other legislator.

Nicholls Dilemma:

Number One Issue – Banner Funding (Required to Update Hardware/Software)

  • First Year Funding – Approved for 2006-07 at $1.7 million with support of Office of Information Technology, University of Louisiana System Board of Supervisors, Louisiana Board of Regents and the then Blanco Administration.
  • Remaining $3.7 million approved by the State’s Office of Information Technology, the University of Louisiana System Board of Supervisors, and the Louisiana Board of Regents but was not included in the Jindal Administration’s 2008-09 Budget Request.
    • The lack of this funding has tied up Academic Enhancement Fund Reserve monies for next 3 years and put the University on the edge of financial exigency.
    • The remaining cost of this initiative has now increased to $4.1 million.
  • CRITICAL – $4.1 million from last year’s surplus!!

Nicholls did not receive any of the $34 million of new four-year higher education dollars in 2008-09 to reach the regional average in state funding.

  • No flexibility – Perhaps the only university with no faculty and staff pay increase.
  • Required to institute “soft” hiring freeze prior to governor’s request because of Gustav and Rita, which impacted enrollment, revenue from canceled athletic events, university closed for over a week, and damage to the university.
    • This prevented using a hiring freeze to help in the 4.6% mid-year budget cut.
    • Any further cut would affect personnel and students directly – Even an additional 3.5% reduction would include the possible elimination of 5 academic programs and the reduction of two others involving approximately 10 faculty/staff positions with a direct impact on at least 120 students!

Higher Education’s Dilemma:

We have been asked to prepare for an additional 15.8% cut to state funding as well as a 28.5% reduction.

These requests are in addition to the 4.6% reduction in state funding that was implemented recently as a mid-year reduction.  That is, we are starting the new year with a 4.6% budget reduction from the beginning of the 2008-09 fiscal year.

The accumulative result of the two scenarios would be approximately a reduction of 20% to 30% of state funding to higher education.

The projected shortfall of $2 billion is less than 7% of the $30 billion state budget.

Higher education is being asked to prepare for over a 30% reduction!

Any further budget reduction does not indicate that higher education is a top priority in this state, even at a time when need for a more educated work force is necessary to improve the state’s economic future!

Based on the latest figures from the Southern Region Educational Board (SREB) for 2007-2008 school year,

  • Louisiana’s state funding per full-time student for 4-year colleges and universities ranked 9th highest of the 16 states in SREB at 96% of the average funding.
  • Combined with the second lowest tuition rate (64% of average),
  • The total funding for higher education in Louisiana ranked next to last (West Virginia) in total revenue (82% of average).  Even $3,031 less per student than Mississippi!
  • With a 30% reduction in state funding we would rank next to last in state funding (67% of average) and dead last in total funding (65% of average) per student!
  • Even a 10% reduction (5.4% on top of the 4.6% already realized) would put our state funding 13th of the 16 states (86% of average) and again dead last in total funding (77% of average)!
  • Even a 7% overall reduction (2.4% on top of the 4.6% already realized) would still have Louisiana dead last in total funding (78% of average)!

A primary problem is that higher education and health and hospitals are the only major state units whose funding is NOT constitutionally protected.  That is why we get a disproportionate share of any budget reduction!

This would obviously have a devastating effect on student’s progress and success as well as their access to higher education.  Also, the effects on faculty and staff and the region and state would be devastating.

What can we do?  We can notify our legislators and governor’s office by email and/or letter (see attached) not only letting them know our concerns, but also to give them ideas of some things that might be looked at to reduce the effect on higher education.

Possible elements to consider

  • Allow for the management boards of higher education to regulate tuition.  We are the only state that requires a 2/3rds vote of the legislature to increase tuition.
  • Make TOPS a fixed stipend (say $1,500 per semester for 4-year universities) regardless of which university the student attends and regardless of the tuition at that school.
  • Use some stimulus money to offset reduction in higher education’s state funding.
  • Convene a Constitutional Convention to aid in prioritizing funding so that reductions could be spread more evenly across all units.  Of course, this will not solve the short term problem, but could help in future downturns in revenue.
  • Do what can be done to spread the budget reduction more evenly throughout all units of state government.  A 7% reduction (2.4% on top of the 4.6% already cut) would be less devastating.
  • Use some of the over $800 million of surplus still available from last year to help stave off this disaster.
  • After the above surplus funds from last year are expended, the “rainy day fund” could be tapped for over $250 million.  It is certainly raining!

Any comments or correspondence in this matter should be polite, to the point, only to the specific legislator, and in your own words.  They will listen to their constituents!

Attached is the contact information for several of our area legislators as well as the web sites for the governor’s office and all legislative contact information.  Please contact them!

Thank you for your contributions to the Nicholls community and please continue your efforts as we work our way through this tough situation.

Download: 2009 Contact Information for Louisiana Governor and Legislators (PDF)

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