Some legislators worried about funding for TOPS

Lawmakers fret over Jindal’s plan

Republican legislators complained Monday that the governor’s approach to the budget threatens long-term funding for a popular college tuition program.

At issue is $120 million from tobacco companies that the Jindal administration wants to use in next year’s budget for the Taylor Opportunity Program for Students. The money is a one-time infusion that would leave more dollars in the state general fund to pay other expenses, including health care and higher education, during a time in which the state is pressed for cash.

State Reps. Cameron Henry, R-New Orleans; Thomas Carmody, R-Shreveport; and John Schroder, R-Covington, said Gov. Bobby Jindal is just creating a problem for the following year, when the extra tobacco money no longer will exist. They said the governor is putting TOPS on track for a deficit.

“All they’re doing is creating a $120 million budget hole that we’re going to have to fill,” Henry said.

Commissioner of Administration Kristy Nichols, the governor’s top budget aide, said not using the money would mean a 5 percent cut to higher education funding in the budget year that starts July 1. She said the governor wanted to protect what he considers to be critical services.

Nichols said cuts can be made in the following year if the revenue does not materialize to sustain services. “We make decisions every year about what expenditures to fund based on the available revenue,” Nichols said.

In the upcoming fiscal year, state government faced a more than $1 billion shortfall in the money needed to keep services at their current levels.

The governor presented a $24.7 billion proposed budget last month that relies on property sales and other so-called one-time, or nonrecurring, money sources to balance expenses with revenue. The spending plan will be debated in the legislative session that starts in April.

The tobacco money comes from two sources, both stemming from the more than $200 billion that major tobacco companies agreed to pay to states in 1998 to settle lawsuits related to health-care costs.

Louisiana sold 60 percent of the future settlement in 2001 by taking out bonds.

Refinancing those bonds to take advantage of lower interest rates is expected to net the state roughly $85 million in savings, $60 million of which the Jindal administration wants to use to lessen how much in state general fund dollars must be spent on TOPS.

At the same time, the settlement of an argument over compliance that resulted in tobacco companies withholding a portion of the tobacco settlement in an escrow account will produce more dollars. By settling, the state unlocks access to at least $90 million, $60 million of which would be used for TOPS.

The governor plugged the $120 million into the proposed budget, frustrating legislators who oppose the use of one-time money for ongoing expenses such as TOPS.

“I have spoken with a good number of the members of the Legislature, and each senator and representative has expressed concern over how this budget has been cobbled together. The proposal regarding use of tobacco settlement funds is yet another example of just how concerned we should all be,” Carmody said in a prepared statement.

Schroder complained that accounting games are jeopardizing TOPS’ future.

Henry said he is all for saving money on the tobacco bonds.

“Anytime you can finance for a lower interest rate, why not do it. It’s what you do with the savings,” he said.

Henry said he doubts the governor will listen to their concerns.

“I want members to be aware of where the nonrecurring money is and let them know we’re creating a problem,” Henry said.

Comments

1) Comment by Bouncer - 06/03/2013

@whodat70816......yes, really. I see it all the time. Far too many incoming freshmen treat LSU as a tax-paid day camp. Class absenteeism skyrockets, they fail to do their assignments or take tests on schedule, they lie and make up excuses for failing to take care of their academic responsibilities. I could go on and on, but the worst part of it is that so many of them are academically unprepared to tackle study at the university level. They ought to go to BRCC for a couple of years and take remedial courses.

2) Comment by jwarren - 05/03/2013

swinhim, my mistake. I was reading so much trash in these comments that your sarcasm did not register.

3) Comment by whodat70816 - 05/03/2013

What really needs to be revised is the gene pool in Louisiana....not TOPS.

4) Comment by whodat70816 - 05/03/2013

@Bouncer....really? SMDH...all I can say to that is "wow....how sad".

5) Comment by whodat70816 - 05/03/2013

And not a single one of these fools will stand up to Booby when it comes time.....they will all vote for and pass exactly what Booby wants and then later refer us to this article to say that they warned us. What a bunch of spineless bunch at the State Capital.

6) Comment by KilgoreTrout - 05/03/2013

After Bobby Jindal and the leges used fiscal gimmicks to declare the state budget balance for the last 5 years the chickens have come home to roost. After millions of dollars in mid-year budget cuts in December, 2012, up to $278 Million more may have to cut before June 30. The shortfall results from budgeting revenues that were highly unlikely to materialize. (See the details here.) It’s interesting that Jindal is even using some of the same revenues that didn’t materialize in the current fiscal year to balance the budget for FY14. One of those is the sale of the old insurance building property next to the State Capitol. Not only has the property not sold, but the revenues projected are higher than the appraisals. It’s the same for other properties around the state. Even in Louisiana, the state cannot spend the same money twice. Either there will be a shortfall in the current year’s budget or in the FY14 budget. Jindal makes a mockery of the intent of state constitution which requires a balanced budget. A majority of the leges are equally at fault because they voted for this fraud. Such accounting gimmicky makes as much sense as us mullets balancing our personal budgets based on the proceeds from winning the Powerball. It’s time to stop these fiscal games that only serve to harm the citizens of our state by denying them needed services. Jindal will not stop deceiving us; it’s up the leges to bring some sanity to our state budget. Ironically (or hypocritically) it’s the same sanity that Jindal claims is needed at the Federal level.

7) Comment by KilgoreTrout - 05/03/2013

Bobby Jindal, In an email message to his "friends" was this startling statement: “The folks in Washington could take a page out of our playbook in Louisiana and make government live within its means instead of taking money out of the private sector economy to grow government.” In other words, Bobby is suggesting that the people at the U.S. Capitol emulate, fiscally, what he has done at the Louisiana Capitol. Here’s what Jindal has done in Louisiana: – The per capita state debt has reached an all-time record. – The state is within striking distance of the constitutional “cap” on total debt. – The current state budget has a $278 Million hole in it because Jindal budgeted funds that never materialized. – The proposed budget for FY14 has a $1.2 Billion shortfall and is balanced using one-time and fictitious revenues. – The Unfunded liability is the state pension systems has grown by over $6 Billion. Unfortunately, it appears that the “folks in Washington” have already borrowed Louisiana’s playbook.

8) Comment by Bouncer - 05/03/2013

Americans ought to stop perpetuating the myth that everyone should go to college. Some students are not college material, and they should not be pushed into going by well-meaning, but shortsighted, parents or teachers. An untold amount of TOPS money is squandered on these types of students. Next, we ought to realize that going to college is not some sort of inalienable "right" that people have. It is a privilege, and admissions need to be far, far more selective than they are now. A huge amount of TOPS money is also thrown away on students who simply are not academically prepared for college-level studies.

9) Comment by swinham - 05/03/2013

@ crazycajun & jwarren: I think you both know I was being sarcastic and that my point was if Jeff Sadow knows the solution (as an academician), surely the High IQ Jindalistas (actually intimately involved in governance) should.

10) Comment by jwarren - 05/03/2013

BTW, I think TOPS is a great program, but I do agree with those who think the standard for TOPS is too low. I think the fact that it is based on merit, though, is outstanding. There are few such programs these days. Keep TOPS. Raise the standard. That will save money.

11) Comment by jwarren - 05/03/2013

markward, you're dodging. Do you really think the state university system should be dissolved? Was that your response to me, or were you replying to someone else? Did I misunderstand? But more generally, what government services would you retain in your version of Louisiana?

12) Comment by RODEO CLOWN - 05/03/2013

The presentation of a 2% increase in the sales tax is ludicrous and unrealistic. It is simply a regurgitation of the vomit coming out of the Jindal administration. First, Jindal knows full well that a simple 2 cents increase will fall approximately 1.6 billion dollars short of replacing state income tax collection. A sales tax increase of from 4.75 to 6 cents is more fiduciarily sound, resulting in a state sales tax of from 9 to 10 cents per dollar of purchase-or a 225% to 250% increase in the state sales tax alone. When combined with local sales tax, some areas of the state would have a sales tax ranging from 14 to 16 cents per dollar purchased. For every $100 purchased a sales tax of $14 to $16 dollars would be collected. Let's increase the sales tax on the poor and middle class-roughly 35% of Louisiana's population-all of the while allowing sales tax exemptions for such things as home purchases(including mobile homes and RV's) and the materials used to build the home, electricity purchased for non-residential usage, business purchases of commercial vehicles(rentals and acquisitions), or purchases of commercial trucks with a gross vehicular weight exceeding 5 tons. Yes, let's continue these and dozens of others sales tax exemptions businesses benefit from, as well as other tax exemptions benefiting business such as property tax exemptions, tax credits on new employees, transferable(salable) tax credits but, place bulk of the state's revenue generation on the 35% of Louisiana citizens that can least afford the burden. Yeah, that's the deal. It's screwy, but according to Jindal and the Jindanista's, this is the "fair" and "equitable" approach to follow.

13) Comment by crazycajun - 05/03/2013

swinham, r u talking about this governor in this state? Because if u r ur one of the very few to have witnessed what you said. LOL

14) Comment by LSUalum08 - 05/03/2013

Why don't you educate us, Mark?

15) Comment by markedwardmarchiafava - 05/03/2013

Maybe The Advocate could run a series or articles teaching what a truly free country is supposed to look like, since many of it's readers are clueless on that topic.

16) Comment by Bouncer - 05/03/2013

TOPS need further revision, as it is extremely wasteful, awarded as it is to student of such meager academic achievement (which in reality is no real "achievement" at all). The academic requirements to receive it should be much more strict; the academic performance needed to keep it should be much more stringent; and finally, students who receive it and spend their time partying, not taking school seriously, and falling below the minimum GPA and hour requirement should by law have to pay it back. Better yet, make their parents liable for the bill. As a taxpayer, there's very little more annoying to me than seeing thousands of freshmen each year, many of whom have no business at a university to begin with, squander thousands of TOPS dollars on just having a good time.

17) Comment by jwarren - 05/03/2013

swinham, no, it does not stand to reason that Jindal and his cronies have credible solutions for the state's problems.

18) Comment by jwarren - 05/03/2013

Okay, markedward, were you responding to me? Do you think the state universities should be disbanded? Is there any public/governmental entity that you think should not be disbanded?

19) Comment by swinham - 05/03/2013

@jeffsadow: You seem to have all the answers here. Since you make it all seem so simple, doesn't it stand to reason Governor Jindal and his people have credible solutions? If so, given the governor's proven abilities to have the legislature implement and enact his proposals, don't you think Governor Jindal should present a plan to solve the state's fiscal and budget problems, rather than leaving the legislators floundering about? The "fiscal hawks" have stepped in to fill a void that shouldn't be there.

20) Comment by jeffsadow - 05/03/2013

There is more than enough revenue presently coming into the state, it's just maldistributed because of so many dedications which lead to crazy scenarios such as this: http://jeffsadow.blogspot.com/2013/03/excess-funds-tussle-exemplifies-need.html. And while the so-called fiscal hawks have a number of good ideas, their problem is they do not yet have the political courage to fight this disease rather than attack the symptoms and thereby make no real changes; see http://jeffsadow.blogspot.com/2013/01/good-budget-reform-attempt-emerges-but.html.

21) Comment by markedwardmarchiafava - 05/03/2013

Not simply "yes," but "absolutely." As for those who insist on taking "general welfare" out of context, all I can do is hope ignorance isn't permanent.

22) Comment by RODEO CLOWN - 05/03/2013

SuzanneMS, the TOPS program can and does provide scholarship funds to private, for profit schools The following quote is verbatim from the TOPS website:“TOPS (Taylor Opportunity Program for Students) is a program of state scholarships for Louisiana residents who attend either one of the Louisiana Public Colleges and Universities, schools that are a part of the Louisiana Community and Technical College System, Louisiana approved Proprietary and Cosmetology Schools or institutions that are a part of the Louisiana Association of Independent Colleges and Universities.” TOPS scholarships are provided to students attending private, for profit such as University of Phoenix, Delta College, ITT Tech, Diesel Driving Academy and other for profit programs. A list of the 70+ “approved” proprietary, for profit, schools is provided on the LOSFA website. It is quiet an eye opener. An LPB report dated February, 2011, indicated that roughly 10% of all TOPS scholarship funds went to for-profit schools.

23) Comment by jwarren - 05/03/2013

17) Comment by markedwardmarchiafava - 03/05/2013 It's not the responsibility of the state to take money from one citizen to finance the education of his neighbor's kids Markedward, would you favor dissolving all state universities? Yes or no?

24) Comment by 1ryben - 05/03/2013

So a "C" student is worthy of free tuition on the tax payer's dime, yet a "C" rated school is deemed a failure and we have to rescue these kids with our magic voucher?

25) Comment by oni-yuri - 05/03/2013

1. Out of state students are not eligible for TOPS unless their parents have been LA residents for at least 2 years before graduation. 2. TOPS only covers a basic tuition amount-no fees, no room and board, no books, etc. 3. TOPS can be used at an in-state private institution, it just won't pay very much. 4. You can find all this stuff on thier website.

26) Comment by SuzanneMS - 05/03/2013

TOPS can only be used by Louisiana residents at a state school -- not private and not out of state. As I understand it, the original purpose was to keep high-performing students in the state. However, 2.5 gpa and 22 on the ACT is not a "high-performing student." That's an average student. And you're right, foldgers, that many of the students move out of state up on graduation, but you can hardly blame them. They didn't go to college to get a job as a chicken-plucker or hotel maid.

27) Comment by foldgers - 05/03/2013

I never liked the idea of TOPS, especially at first when the requirements to obtain it were so low. I say scrap it all together or raise the qualifications to reduce the number of those who just barely get it, use it for maybe a year and realize they were not made for college and drop out or fail out and bam, wasted about $6k on that one student who should not have had it in the first place. A full paid scholarship with a C AVERAGE?? I believe it used to be 2.0 of the ACT score was high enough. And for the love of Pete, so NOT give it to out of state students!! This is Louisiana taxpayer money, why should we give these students our money that their families have not put one dime into??? Not to mention, chances are, once they graduated from their free education, they will most likely move back home or elsewhere and produce NOTHING for the very state's taxpayers that provided said education. Second thought, just scrap the whole thing. There are many private companies that make you EARN your scholarships!

28) Comment by Mygulfbleedsforu - 05/03/2013

Or, as some of us call it, promoting the general welfare.

29) Comment by markedwardmarchiafava - 05/03/2013

It's more than obvious by the majority of the comments here socialism is alive and well.

30) Comment by SuzanneMS - 05/03/2013

No, actually, I did not elect any of them. I voted -- but not for them. TOPS definitely needs to be revised. The irony is that those who demand that TOPS be provided to every average student (2.5 is C, which is by definition "average;" it should be at least a 3.0, preferably 3.5), regardless of the cost, are the same ones who will scream for cuts in every other sector because "we can't afford it." Well, the reality is that Louisiana cannot afford TOPS as it is. The program has not been cut, even though every other aspect of higher education has been butchered. In fact, it's grown, because tuition increases result in increases in TOPS, which means we have set up a never ending cycle. TOPS is partially responsible for the low completion rate at Louisiana universities; too many average students go to a university when they would do better at a college or community college. Because they are not making an investment in their own education, far too many view it as a year-long high school graduation party paid for by the tax payers. The same people who scream that the poor must pay "something in taxes" so that they have "skin in the game" reject any idea that TOPS students should do the same. There is no means test, yet the same people who oppose taxes for public education for the poor and middle class demand that the wealthy be subsidized when it comes to higher education.

31) Comment by 1ryben - 05/03/2013

TOPS is a huge waste. The program needs to be scrapped or big changes need to be made.

32) Comment by markedwardmarchiafava - 05/03/2013

Before you people take up stones to cast at the legislators, remember this one thought: they didn't appoint themselves, you and your neighbors elected them.

33) Comment by tradewinns - 05/03/2013

tobacco money now used to fund college education? what about the stop smoking programs? here go the politicians spending money for one thing, they like, meant for another, they don't like. one means they get votes, the other means no votes.

34) Comment by crazycajun - 05/03/2013

All of a sudden they develop a spine. Five years they have no spine or pairs and they want us to believe they actually care about the constituents. I think that L'il booby low approval rating had something to do with it. Distancing themselves from booby is isn't going to wash the stink from their hands.

35) Comment by Scrooge - 05/03/2013

Go ahead, tee off the college students who typically pay little attention to politics, all these d%$# politicians will be losing their jobs, ideology may not work too good in the real world

36) Comment by swinham - 05/03/2013

Let's hope more legislators of both parties will join the "Fiscal Hawks" in demanding an end to this insanity. Ms. Nichols' defense of this ridiculous budget is: "We didn't want to cut so we made up some revenue we might get and and added some we probably will get (once) to make it look like the budget is balanced, If it isn't, we'll make cuts in the middle of the year and we might even propose cuts for the following year unless we can come up with some more gimmicks to make that budget seem balanced." Bottom-Line: Recurring state expenses exceed recurring state revenues. They have for many years and are projected to do so every future year. The legislature needs to collectively get the cajones to increase recurring revenues, reduce recurring expenditures, or both. It's not rocket science, but it is clear the governor is not going to even propose a realistic way to fix this.

37) Comment by markedwardmarchiafava - 05/03/2013

It's obvious the concept of statism has been well indoctrinated into the minds of Amerikans.

38) Comment by jwarren - 05/03/2013

By markedward's logic, we should do away with all public universities and then all public facilities and institutions. We should privatize EVERYTHING. Need a police officer? Pay your subcription to Acme Security. Need that pothole fixed? Ante up. Brilliant.

39) Comment by Traveler - 05/03/2013

Markedward...: I guess that means that the state should not use my tax dollars to fund police and fire protection for YOUR home----you must bear your portion of that expense alone. By your reasoning, the state should not use one penny of my tax dollars to pay for street repairs in front of YOUR house. In fact, let's just privatize all such services, right? What a silly statement----don't you comprehend that an educated citizenry makes YOUR world a better place for YOU?

40) Comment by markedwardmarchiafava - 05/03/2013

It's not the responsibility of the state to take money from one citizen to finance the education of his neighbor's kids.

41) Comment by Traveler - 05/03/2013

To "Mygulf..." You're right. Perhaps some legislators are realizing that blindly and obediently following the governor rather than serving their constituents is a sure way for them to be voted out of office at the first opportunity. They need to try to undo some of the harm that they did last year.

42) Comment by Mygulfbleedsforu - 05/03/2013

Republican legislators complained Monday that the governor’s tanking approval rating only recently became known to them.

43) Comment by jwarren - 05/03/2013

Yes, maybe our legislators have decided to stop being scared of bobby Jindal. May e they will also have the chance to revisit the education bills they passed Pelosi style, without even reading them.

44) Comment by Traveler - 05/03/2013

The members of the Louisiana legislature have an opportunity in the upcoming legislative session to redeem themselves for their disgraceful performance last year. It was pathetically apparent last year that the legislators were acting as puppets of the administration rather than fulfilling their responsibility to the people who elected them. If those legislators had acted with independence, courage, and integrity last year, then citizens would not now be spending lots of time, energy, and money to fight to overturn the unconstitutional and unfair laws that were enacted in 2012.

45) Comment by teacherguy - 04/03/2013

THANK YOU legislators for beginning to use your brains on these "cobbled together" proposals the executive branch keeps throwing at you guys. It is time Jindal gets out of the legislative body's powers and tend to his own....particularly in this situation, he must propose a budget...but legislators are required to check what he is trying to do and balance his actions appropriately...not just rubber- stamp everything he pushes at you. Kuddos for doing your job, and beginning to right the ship that went astray with an arrogant President-wannabe!!!