LSU-E threatens ‘exigency’
Regents refuses to modify goals; ‘death spiral’ warned
The Louisiana Board of Regents refused Wednesday to modify performance and funding goals for LSU at Eunice in a move that LSU officials said could financially cripple the two-year college.
The LSU-E decision represented the first test case of the LA GRAD Act legislation and the Board of Regents members saying they refused to set a precedent for a college changing the goals the college agreed to reach.
The 2010 LA GRAD Act allows colleges to hike tuition costs by up to 10 percent a year if they meet certain performance goals like improved graduation and retention rates.
But the state’s performance-based funding formula revised earlier this year also bases 15 percent of overall state funding for each college on meeting the GRAD Act goals.
“This is the first test of the GRAD Act,” said Regents Chairman Bob Levy, of Ruston. “I think it’s important we follow the spirit and the letter of the law. I don’t think we change the goal line in the middle of the game just because of misunderstandings or we missed the targets.”
Levy said the decision on LSU-E avoids setting a bad precedent that could be cited by every other college requesting changes that do not arise from “extraordinary circumstances.”
LSU-E Chancellor William Nunez pleaded that he erred by being too aggressive in setting high performance goals that the college could not meet, even as one of the state’s top two-year colleges. He said it “seems” most other colleges kept their goals lower to avoid suffering financially. He requested that the college’s retention and graduation rates be scaled down somewhat.
“It could put us in a kind of death spiral and unmercifully so,” Nunez said. “You’d be hurting the students more than anything else.”
“I’ve already had a bypass from this job,” Nunez later added. “I can’t afford a broken heart too.”
The LSU-E chancellor said he is OK with losing the ability to increase tuition for at least one year, even though that would cost the small school at least $750,000 annually. But the loss of 15 percent of its state general funds, which would be more than $900,000, would result in massive layoffs and academic program cuts, he said.
LSU System President John Lombardi asked for mercy for LSU-E, even though he said he pushed for Nunez to initially adopt lower performance goals. Lombardi said the Regents’ refusal to adopt any modifications in goals for LSU-E likely would force the school to declare a financial emergency, called exigency.
“We’ll have stood up for our principles, but we’ll have a ruined college, which is one of our best in the state,” Lombardi said. “If you take a million bucks out of this institution … it’ll crush them.”
State Commissioner of Higher Education Jim Purcell asked the Board of Regents not to budge on the GRAD Act requirements. “We don’t know that this is going to be the only institution that’s in this situation (next year),” he said.
But Purcell said the Board of Regents will work closely with LSU-E to boost the school’s performance and finances. Purcell said the Board of Regents could set aside the $900,000 or so for LSU-E in some kind of intervention fund and, if progress is made, then the school could maybe earn back 75 percent of it or so.
Doing so could avoid major funding losses, he said.
LSU-E set its initial first-year student retention rate at 50.3 percent — after retaining just more than 50 percent of its first-year students in 2009. But that percentage dropped to 42.86 percent last year, Nunez said, largely because of state budget cuts to LSU-E of more than 25 percent in three years.
That result skewed the LSU-E projections going five years further out, he said. Progress is being made to offset the setbacks, Nunez said, but doing so will take longer than expected because of budget cuts, larger class sizes and other problems.
More students dropped out of school, or scaled back to part-time status last year than anticipated because of personal financial problems during economic recession times, Nunez said.