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If you go with the business analogy, LSU is a division of the State Government of Louisiana. No business would intentionally reduce its revenue to where it could no longer adequately fund one of its divisions, in this case, LSU.
It is a financial decision. Money doesn't grow on trees. Budgets have to be balanced. It is time for management to get busy making the shortfalls as harmless as possible. Some things will have to change. Hopefully they will change in a way that won't affect the quality of education meaningfully. That is certainly a possibility.