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

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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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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-madison-says-400-jobs-to-be-cut-under-walker-budget/
 
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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
 
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****.
 
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.html?entry=/2015/04/lsu_credit_rating_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.
 
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.
 
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.
 
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.
 
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.
 
Who cares, it's Louisiana.
 
I thought Jindal was doing an OK job when he was first elected. Now I can't find a single person that supports him. Now that he's ****ed everything up he's acting like a little bitch.
 
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****.


What professors make 250 grand a year? Maybe at the very best law schools and business schools I suppose it might be possible some one makes that amount of money, but the average professor salary is very low. Especially now that tenured professors are becoming so rare, and adjuncts and assistant professors are picking up the slack. Adjuncts make a very small amount of money.

Otherwise I agree entirely. The administrators are probably the worst. They have administrators making millions, and what do we get out of it? And how can an academic establishment justify spending 7 million dollars a year on a football coach? It really is crazy.
 
Oh ya. Just the GOP going after education. Here in CT, our all democrat run state just proposed this:

The budget lays out tens of millions of cuts for higher education. Malloy's proposed cuts have led to an approved tuition hike at the Board of Regents for institutions like community colleges, Central Connecticut State University and Eastern Connecticut State University.

Malloy Defends Hundreds of Millions in Cuts | NBC Connecticut

And our local:

Higher education cut, local school aid flat in Malloy budget | The CT Mirror

Malloy's budget proposes an overall cut of $10.6 million for UConn.

/snip

The state's dozen community colleges, four regional Connecticut State Universities and online Charter Oak State College face a $20.6 million cut, but say they will be $38 million short of what they need to continue existing programs.

/snip

Tuition has increasingly made up for reductions in state support. Tuition and mandatory fees to attend UConn rose by $738 from last school year to the current year. At the regional Connecticut State Universities, tuition and fees increased by $178.

Yup, just those damn Republicans.

He also is cutting funding to mental health which his commission said to increase when asked to help after Sandy Hook.

The governor proposed cutting $25 million in grants for organizations that provide mental health services throughout Connecticut.
 
This is great news. LSU will have to reduce their professors' pay and cut the cost of education to attract more students.

If their bluff is called and they file those papers a judge will be setting the LSU employees' pay.
 
What professors make 250 grand a year? Maybe at the very best law schools and business schools I suppose it might be possible some one makes that amount of money, but the average professor salary is very low.

Wait, HOW Many UW System Employees Make More than Wisconsin's Governor? | Common Sense Central on News/Talk 1130 WISN

The highest-paid professor earned $306,030. According to publicly available University of Wisconsin-Madison class schedules, he didn’t teach a single course during the fall semester, and is not teaching any courses this semester—instead overseeing graduate students as they write their theses.

The second-highest paid professor also teaches economics at Madison and made $296,085. He taught two classes last semester and the same two this semester, though he did teach one with another professor.

That professor made $232,583 himself yet is not teaching a single course by himself this semester.

The ten highest-paid professors in the UW System all teach at Madison and earned an average salary of $269,253 but are only teaching a total of 15 different courses. Four of those ten professors are only teaching one course, and only one is teaching three.

Sure, talk radio.. But the salaries earned are sourced pretty well.
 
This is great news. LSU will have to reduce their professors' pay and cut the cost of education to attract more students.

If their bluff is called and they file those papers a judge will be setting the LSU employees' pay.
Just because someone is a republican doesn't mean they're fiscally competent, but in all fairness, and notwithstanding Dons take, this isn't all Jindals fault nor his policies, it is a variety of reasons, and it's not just affecting States like LA. New York state is also in trouble, CA, and most of the red states.. The economy as much as it is being reported that it is recovering, isn't recovering near enough, especially when you talk to the man on the street! Gov can flub the numbers all they want, but everyone of us knows people with good educations sitting on their thumbs right now, and that is never a good sign of a robust or even healthy economy.

The truth is that more than 12% of the capable working class in this country are not working, much higher if you're black. SMB and mid-sized enterprises are struggling mightily with over-regulation and stagnation, not to mention Obamacare and other responsibilities. People just can't afford to send their kids to schools that charge a tremendously outrageous tuition, nor can they afford to send their little darlings to major in crap educations like psychology and liberal arts..


Tim-
 


Sorry, I forgot to include economics in my post. There are a few departments where professors are more highly paid, as those departments bring a lot of money back into the university. Outside of those departments, the average professor makes nowhere near that amount. So referencing a few outliers doesn't actually say much about the issue.
 
One can ask "Is the La. Government making drastic cuts or are they forcing a previously bloated system to reform by starving the beast?"
 
Just because someone is a republican doesn't mean they're fiscally competent, but in all fairness, and notwithstanding Dons take...

I was clear in mentioning both the Governor and Legislature. I agree that the Governor is not solely to blame.
 

It's impossible to know without more information, but I've got some friends that are Professors, several in economics. The guys making the big money are often cash cows. One person in particular I know brings in a ton in consulting work that floats an entire research section, all of his salary, half the salary of several econ faculty, admin, plus an annual many $thousands transfer to technology for the rest of the department, and he teaches 1/2 class per year many years. There is no one making that kind of money just sitting around overseeing graduate students.

The other thing is most of the well paid folks, especially in the business fields, are endowed professors, so those examples in Wisconsin might be the (e.g.) Charles Koch Professor of Economics, with who knows ($100k?) of that salary paid for out of an endowed fund. Any decent school will have several of those for the most senior faculty in the business departments. It's also common for local businesses to make donations short of endowments to "augment" salaries for the areas they are most interested in, such as economics and accounting. So the money flows through the school, but is earmarked for higher salaries for the express purpose of attracting the big guys to campus - so accounting firms as a group might donate $200k/year to go to salary for senior accounting professors, etc.
 

As noted by Frodly (post #17) a "few outliers" doesn't really tell the whole story.

2014-2015 average professorial salaries - Univ of Wisconsin-Madison

Anyone who thinks "overseeing graduate students as they write their theses" is not to be regarded as "teaching", don't know **** about graduate level education.
 
Sorry, I forgot to include economics in my post.

Sure, i guess if you keep eliminating professors and departments that make more than $250,000.00 / year, you'll eventually get to a spot where no professors make $250,000.00 /year.
 
One can ask "Is the La. Government making drastic cuts or are they forcing a previously bloated system to reform by starving the beast?"

One can ask it but it don't make the "bloated system" premise true.

What has been happening at universities and colleges across the country is the expanding number of adjunct instructors, many with equal qualifications to those professors making the outrageous salaries so targeted by those who really don't like expanded opportunities for education. Different from previous times, the adjunct profs are not on "tenure tracks" as a recent study shows.
The average salary of a full-time faculty member increased by 1.7 percent in 2012-13, roughly keeping pace with inflation, according to a report being released today by the American Association of University Professors.

The increases in average salary were far from uniform. Gains were larger at private than at public institutions, and gains were larger at doctoral institutions than in other sectors. In other words, the (relatively) wealthy got wealthier.

The AAUP report notes repeatedly that the salaries covered in this study represent a minority (and a shrinking minority at that) of those teaching in American higher education. While full-time, non-tenure-track faculty members are included, part-timers are not. So while adjuncts are doing a larger and larger share of teaching, their pay levels aren't reflected here. Given that adjuncts tend to earn a fraction of what tenure-track professors take home, and that benefits are generally minimal (if there are any), an overall economic picture of the American professoriate would be much bleaker than this one.
 
One can ask it but it don't make the "bloated system" premise true.

What has been happening at universities and colleges across the country is the expanding number of adjunct instructors, many with equal qualifications to those professors making the outrageous salaries so targeted by those who really don't like expanded opportunities for education. Different from previous times, the adjunct profs are not on "tenure tracks" as a recent study shows.

The bloated system is the entire higher education system:

education_sm.jpg
 
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