Louisiana’s higher education leaders are trying to work out a financing deal with Gov. Bobby Jindal’s administration to keep the state’s public colleges from running low on cash to operate their campuses.
At issue is the way the Jindal administration and lawmakers chose to provide much of the state funding for the schools in the state’s $25.4 billion budget.
They are using a patchwork of dollars from property sales, legal settlements, lease payments and other financing arrangements.
Most of what was budgeted hasn’t been deposited into the set-aside fund used to pay for higher education, called the Overcollections Fund. Property sales aren’t complete, dollars owed to the state haven’t yet been paid and fund transfers haven’t been completed.
Uncertainties about the pace of deposits into the fund are creating cash flow concerns for colleges.
Money shortages could hit campuses by the end of the month unless new dollars arrive or a temporary fix is devised to keep money flowing.
Barbara Goodson is deputy commissioner for finance and administration for the Board of Regents, which oversees state financing for the colleges. She said she’s in daily conversations with the Jindal administration about ways to guarantee consistent funding for campuses.
“We have been told repeatedly that all of the money will be deposited. The problem is the timing. And they have assured us if we can give them the data that explains where the cash-flow concerns are then they can work it out,” Goodson said Tuesday.
Jindal said the administration will shuffle around available state cash, if needed, to keep campuses afloat until the dollars planned for higher education’s budget arrive. He said the schools will get the money promised.
“We do seed funding all the time for different agencies,” the Republican governor said. “That wouldn’t be anything difficult or extraordinary to do.”
About $850 million in state funding was budgeted for higher education in the 2013-14 fiscal year, and $340 million — or 40 percent — of that is slated to come from the Overcollections Fund.
The Jindal administration and lawmakers have used similar funding maneuvers for years, but this is the first time the bulk of the money was earmarked for higher education, instead of health care services.
Worries about cash flow were raised by Commissioner of Higher Education Jim Purcell during the Legislature’s budget negotiations.
Commissioner of Administration Kristy Nichols, the governor’s top budget architect, said she’s confident the dollars expected for the Overcollections Fund will pan out as expected.
She said the administration is working with higher education leaders to determine the rate of campus tuition collections to see if other state dollars will need to be provided until the set-aside fund catches up with schools’ operating cash needs.
“I know it is new, I suppose, to higher ed, but it’s certainly not new to state budgeting and not risky,” Nichols said.
Goodson said she’s hoping Regents and the Jindal administration can work out a payment structure that will keep colleges from having repeated cash flow concerns for the remaining six months of the budget year.
“I would really like for us to all come together and get a plan on the table, so we don’t have to do this month after month,” she said. “We have been assured again this morning that they will do what needs to be done.”