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Thread: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

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    LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    One more example showing us just how well Republican economic ideas work in the real world.

    LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    LSU and many other public colleges in Louisiana might be forced to file for financial exigency, essentially academic bankruptcy, if state higher education funding doesn't soon take a turn for the better.

    Louisiana's flagship university began putting together the paperwork for declaring financial exigency this week when the Legislature appeared to make little progress on finding a state budget solution, according to F. King Alexander, president and chancellor of LSU.

    "We don't say that to scare people," he said. "Basically, it is how we are going to survive."
    How big are the cuts to college funding?
    The change would bring state funding for LSU from around $3,500 per undergraduate student to $660 per undergraduate student next year.
    One might almost think the modern Republican Party doesn't much care for public education. An article from February points out the tax cuts being promoted as economic boosters don't seem to be working too well and public education is suffering as a consequence.
    GOP governors want higher education cuts to recoup budget shortfalls
    Facing budget shortfalls, a handful of prominent Republicans governors want to cut funding for higher education to help make up the gap, while insisting that tax hikes are a non-starter.

    Wisconsin Gov. Scott Walker wants a $300 million funding cut for higher education, and Gov. Bobby Jindal has proposed the same level of cuts in Louisiana. Arizona Gov. Doug Ducey wants at least a $75 million cut to higher ed, and Kansas Gov. Sam Brownback is aiming to cut $45 million from K-12 schools and higher education combined.
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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    `
    Quote Originally Posted by Somerville View Post
    One more example showing us just how well Republican economic ideas work in the real world.



    How big are the cuts to college funding?


    One might almost think the modern Republican Party doesn't much care for public education. An article from February points out the tax cuts being promoted as economic boosters don't seem to be working too well and public education is suffering as a consequence.
    This is all understandable. Louisiana recently learned they ranked 3rd in a poll of America's most backward state. Who wants to be 3rd to Arkansas and Mississippi?

    Of course, the really sad/scary thing is that Walker is doing much the same thing in Wisconsin, which really has (soon.... had) a great university system.

    http://fox11online.com/2015/04/17/uw...walker-budget/
    Last edited by upsideguy; 04-24-15 at 01:03 AM.

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    republicans care less about higher ed, despite most of the repubs in office went to colleges that were greatly funded by taxpayers, but the truth is that few dems are willing to raise taxes or prioritize higher ed either

    In my state, the gutting of higher ed began years before the great recession (2002 ish). The dem governor canvassed voters and discovered that college was "the lowest priority" for them. Not surprising coming from a population where 80% never got a degree and even fewer currently rely on subsidized college. However, to make up for this (or as revenge), my public school has gone from 30% to 50% out of state enrollment. LSU will attempt this now, but with less success i'm sure.

    At the same time, i have to question the academic mission of a place where 25% of its budget comes from football. Maybe if these fans donated the football ticket $ to i dunno, the *school* instead, this would be a total non issue. Let's see, $100 million from athletics, yep, pretty sure that will cover the loss in state revenue. It's like that's the only purpose for LSU existing or what?

    All of the state's colleges will declare bankruptcy at once, to minimize the blow to enrollment, because no one goes to those colleges unless they have no other choice. The problem is that now they'll have to come up with $3000/year more to cover tuition, so this will indeed cripple enrollment as uneducated and unemployed beats uneducated (sorry but it is LSU), unemployed, and debt ridden

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    I don't have much sympathy for the school.. sorry.

    there's an awful lot of money floating around in terms of sports and merchandising...not to mention the tuition dollars that are already paid, exorbitant book prices, etc.

    the salaries that are made by coaches, administrators and professors is just... damn...crazy.
    300 grand a year to be a assistant crash.. or 250 grand a year to teach a class?... bull****...absolute bull****.

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    IMO, people don't realize the just kind of drastic funding cuts LSU is facing. Moody's lowered the school's credit outlook The Times-Picayune's blog related to that development revealed:

    The state's college and university systems are facing as much as an 82 percent reduction in state financing in the next budget cycle. Louisiana's public colleges and universities, including LSU, also lack the ability to hike their own tuition rates, first needing approval from two-thirds of state legislators.

    http://blog.nola.com/politics/print....ting_down.html

    That's not a modest cut. That's a catastrophic one. Even worse, under state law, LSU has no ability to raise its tuition, so its latitude to develop alternative revenue streams is also impaired.

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Jindal is going to leave Louisiana is a compete financial mess. Even Republican politicians in LA. are PO'ed at him. He's walking out the door and they have to stay and fix the crap he left them.

    The 1 good thing is this mess has completely destroyed any chance Jindal had in running for president. Many Republicans are starting to see that people like Brownback and Jindal and their warped ideology of burning down the village to save it is destructive and dangerous.

    Smaller government and less taxes are fine, but you just can't shut it down all at once. And with Jindal it's worse, he's going to walk away, makes millions while LA. is going to struggle for years because of his ideology. Hell of a guy.
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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by Somerville View Post
    One more example showing us just how well Republican economic ideas work in the real world.



    How big are the cuts to college funding?


    One might almost think the modern Republican Party doesn't much care for public education. An article from February points out the tax cuts being promoted as economic boosters don't seem to be working too well and public education is suffering as a consequence.
    They need to hire people with business acumen to run the University. When revenue falls you take measures to compensate. You reduce costs. You redouble efforts to get more donations from successful alumni. You don't whine and threaten. Life has its ups and downs. We all have to manage the downs the best we can.

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by fmw View Post
    They need to hire people with business acumen to run the University. When revenue falls you take measures to compensate. You reduce costs. You redouble efforts to get more donations from successful alumni. You don't whine and threaten. Life has its ups and downs. We all have to manage the downs the best we can.
    This has nothing to do with a lack of "business acumen." If Louisiana carries through with the reported 82% reduction in appropriations to LSU, LSU would see an immediate loss of more than 26% of revenue and 22% of cash inflows. The University would need to sell a substantial share of its investments just to avoid running out of cash within a year, even while slashing employment, classes, etc. Reductions in academic and support services would reduce enrollment (depriving it of tuition revenue). Its borrowing terms would grow less favorable. Prospective donors would abandon it. A dramatic retrenchment of its operations would also lead to losses in research grants and contracts. In short, there would be significant additional knock on effects that would further reduce its revenue and cash flow.

    The magnitude of that sudden fiscal shock would pose an existential threat to the University. Its magnitude would be larger than revenue and cash flow hits that have driven many companies out of business. Even worse, Louisiana's laws preclude the University from changing tuition, so the University would have even less flexibility to deal with its fiscal crisis.

    LSU's leadership understands the kind of crisis that could unfold, even as the State's Governor and Legislature appear indifferent and/or oblivious. That grave outcome is exactly why LSU is drafting a financial exigency plan.

    The great tragedy of such an outcome, should it unfold, is that it would have been an entirely avoidable crisis. The crisis would have nothing to do with mismanagement or a lack of "business acumen" at LSU. It would have everything to do with a Governor and Legislature that failed the most basic test of leadership responsibility by embracing an extraordinarily reckless policy choice with little or no consideration of its consequences.

    Then again, given this willingness to take that route, I'm not surprised that the State faces significant fiscal pressures. Failed leadership has consequences across-the-board.

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Quote Originally Posted by donsutherland1 View Post
    This has nothing to do with a lack of "business acumen." If Louisiana carries through with the reported 82% reduction in appropriations to LSU, LSU would see an immediate loss of more than 26% of revenue and 22% of cash inflows. The University would need to sell a substantial share of its investments just to avoid running out of cash within a year, even while slashing employment, classes, etc. Reductions in academic and support services would reduce enrollment (depriving it of tuition revenue). Its borrowing terms would grow less favorable. Prospective donors would abandon it. A dramatic retrenchment of its operations would also lead to losses in research grants and contracts. In short, there would be significant additional knock on effects that would further reduce its revenue and cash flow.

    The magnitude of that sudden fiscal shock would pose an existential threat to the University. Its magnitude would be larger than revenue and cash flow hits that have driven many companies out of business. Even worse, Louisiana's laws preclude the University from changing tuition, so the University would have even less flexibility to deal with its fiscal crisis.

    LSU's leadership understands the kind of crisis that could unfold, even as the State's Governor and Legislature appear indifferent and/or oblivious. That grave outcome is exactly why LSU is drafting a financial exigency plan.

    The great tragedy of such an outcome, should it unfold, is that it would have been an entirely avoidable crisis. The crisis would have nothing to do with mismanagement or a lack of "business acumen" at LSU. It would have everything to do with a Governor and Legislature that failed the most basic test of leadership responsibility by embracing an extraordinarily reckless policy choice with little or no consideration of its consequences.

    Then again, given this willingness to take that route, I'm not surprised that the State faces significant fiscal pressures. Failed leadership has consequences across-the-board.
    I stand by what I said.

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    Re: LSU drafting 'academic bankruptcy' plan in response to state budget crisis

    Who cares, it's Louisiana.
    Trump Attacked A Syrian Airfield. Trump will be a one-term president.

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