***Legislative Session Convenes Monday, March 12, at noon.***
Since 2008, the Louisiana budget has continued to see shortfalls in revenue, which have had significant effects on higher education. As a result, the LSU AgCenter has experienced reductions in yearly state appropriated budgets, consistent midyear reductions and a year-end cut. The reductions over the past four years have made it difficult to implement and maintain efficient statewide operations in both research initiatives and extension programs.
On December 16, 2011, the LSU System received notice to reduce $21.2 million from its current operating budget as part of a $50 million midyear reduction for higher education. This was a part of the overall $251 million deficit-reduction plan unveiled by Gov. Jindal’s administration and approved by the Joint Legislative Committee on the Budget. The provisional distribution was a 5.108 percent reduction of state general funds appropriations to all institutions within the LSU System. The LSU AgCenter’s portion of the 5.108 percent budget reduction of our state general fund appropriation is $3.4 million.
To date, the AgCenter’s state appropriation has been reduced by $19.5 million. This exceeds 20.9 percent of our state-funded operating budget since the beginning of 2008, and it has resulted in the elimination of more than 314 full-time equivalent (FTE) positions.
In addition to these cuts to operational funding, we also have experienced continual increases in mandated costs—without any funding to support them—exceeding $11.18 million during the same time period. These include increases in health insurance premiums, retirement system premiums and Office of Risk Management premiums. These increased costs, compounded with a reduced budget, have required consistent reductions to balance our budget that has brought additional threats to the LSU AgCenter to eliminate long-standing research and extension programs in Louisiana.
The LSU AgCenter’s budget currently is composed of 67 percent state general funds, and the remaining revenue comes from self-generated funds, statutory dedications, grants, contracts and federal funds. This high dependence on state funding magnifies the effects of cuts to the AgCenter.
Unlike most institutions in higher education, the LSU AgCenter receives no tuition from students. Without additional revenue to offset the lack of tuition (other campuses often use increased tuition and fees to help their budgets) and budget cuts, a reduction in the AgCenter’s state operating budget has a more severe effect on the programs and initiatives provided for Louisiana.
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2011 Legislative Session Update
The 2011 legislative session officially ended at 6 p.m. on June 23. After months of discussion on the state budget, the capital outlay bill, governance of higher education and retirement, final agreements were made up until the last minute. In the end, the AgCenter was able to hold on to the $5 million originally removed in the Governor’s Preliminary Budget and restored by the House. Although we were able to restore that cut, we are looking at increased costs for operations this year totaling more than $4.9 million without additional funding support -- $1.9 million for federal supplemental retirement and $3 million for increased mandated costs.
In other news, the Animal Science building received reauthorization in the bill, and we expect to break ground before the end of the summer. GRAD Act 2.0 passed, giving universities more autonomy. Bills to consolidate the Board of Regents and management boards of higher education institutions did not gain enough support to pass. Several retirement bills, including the rehiring of employees under certain circumstances, were passed. Another retirement bill that increased employee contributions and raised the number of years used in the retirement formula failed to make it out of the Senate.
While the AgCenter is not out of the woods yet, overall higher education fared well this year. Thanks to everyone for their hard work and support throughout the last year.
For more information, contact 225-578-4161.
Hamp Grunewald, Bobby H. Fletcher or Frankie Gould