Our Views: A new sign of bad policy

What does it say when the following is the good news: “LSU avoids staff layoffs.”

That headline says a lot about how off-track Louisiana has become in higher education, and in state policy.

In response to yet more cuts mandated by Gov. Bobby Jindal and the Legislature — the fifth time major cuts have been ordered since 2008 — some of LSU’s academic units will absorb cuts and reductions in services, such as fewer courses for students to choose from, and sometimes larger classes.

It is not simply an LSU problem: Colleges and universities across the state will be going through similar exercises in the next few weeks as they finalize their plans to cope with a $66 million reduction in state funding handed down by Louisiana legislators in early June as part of the state’s $26.5 billion operating budget.

The toll of the Jindal administration on higher education is in the hundreds of millions. Some of that has been offset by tuition increases, a sort of a tax increase that the governor embraces.

The LSU cuts would be worse, Chancellor Mike Martin told students and faculty, but for a $5.5 million gift from the university’s athletic department.

If legislators want to talk about one-time money, this is a perfect example: We hope for continued success of LSU athletics as much as anybody, but this is a case of using money that varies from year to year, depending on LSU’s fortunes on the athletic field and resulting TV contracts. The money is nice, now, but may not be there next year.

It’s a perfect example of the kind of scraping by that is particularly disturbing in the case of the state’s flagship institution of higher learning. LSU’s mission should be to achieve national and international stature, not be hobbled by short-sighted funding decisions made at the State Capitol.

For decades, states like North Carolina and Texas invested in their colleges, and reaped enormous benefits. Only in the past two decades, before Jindal’s accession, have we seen Louisiana make up its deficits in higher education funding. And now that progress has been halted.


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Comments (17)


1) Comment by InPVille - 31/07/2012

@Lannonmac: Thanks. You are still ignoring the statistics I pointed to in my initial post on this thread and have mentioned since showing that most U.S. States are having the same fiscal problems as Louisiana. Are their tax revenue structures also based on sales tax revenues? Or is something else involved?

2) Comment by Lannonmac - 31/07/2012

An Income tax based revenue stream is far more stable than a sales tax based revenue stream because it is buffered against temporary economic swings in a state by the simple fact that the economic impact of employment swings in an economy are spaced out over time. Even a basic understanding of tax theory would allow you to see this simple fact. No doubt President Bush’s 2008 Great Recession has had an impact on Louisiana revenue, but the effect of the Great Recession would have been far less dramatic if Gov. Jindal had not gutted the Stelly Plan. Plus income tax is a far more equitable method of taxation.

3) Comment by InPVille - 30/07/2012

@Lannonmac: Is Income tax revenue truly stable? When an economy tanks as ours has, the unemployment rate increases and income tax revenues must also decline as the tax liability of the unemployed and underemployed declines with the loss of income and presumably the income of small business and others is also going to decline. That so many other states are also experiencing revenue shortfalls leads me to believe the situation is a bit more complicated than your theory would have it.

4) Comment by Lannonmac - 30/07/2012

InPVille, apparently you are missing something. By shifting Louisiana to rely on a sales tax based revenue stream, Louisiana's revenue took a nose dive in 2008, when the USA's economy tanked. That is the problem with relying on sales tax, because when sales drop off because of a bad economy there is an immidiate drop in revenue. The whole point of the Stelly Plan was to make a stable system of revenue, but that did not last long when Gov. Jindal was elected. I suspect you already know this, but just feel justified in trying to justify such a huge screwup.

5) Comment by InPVille - 30/07/2012

@Lannonmac: "While every reliable review of the Stelly Plan found that it was tax neutral, Gov. Jindal and his cronies managed to convince many people that it increased taxes. As a result of the Governor and the Legislature’s repeal of the Stelly Plan, the State of Louisiana has lost over $350,000,000 in tax neutral revenue each year since 2008, creating the revenue shortfall we are dealing with now." -[**]- The Stelly Plan did two things. It removed sales taxes. The sales taxes were replaced by income taxes. Apparently when the Stelly Plan was repealed, the income taxes were removed but the sales taxes were not returned to the books. Since the Stelly Plan was supposed to have been revenue NEUTRAL, it is the only way I can see how the removal of the income tax portion of the Stelly Plan could have resulted in a loss of tax revenue to the state. Only half of the Stelly Plan was taken away. Am I missing something here?

6) Comment by 8.3 - 27/07/2012

So lets go for that economic nirvana of no taxes, which means no government. But then WWJD (what would Jindal do)?

7) Comment by 8.3 - 27/07/2012

yeah, we gots business attitude. Bring it on!

8) Comment by 8.3 - 27/07/2012

If my tax increase is invested in university research which creates economic opportunity and dividends exponentially surpassing the inconvenience of investing a few dollars, (see ARPANET) , why not? To not do so might be stupied and doesn't work reel gud. But hey, I gots that right to hunt and fish and bare arms in chruch, ain't needed no kollage fer that. .

9) Comment by Lannonmac - 27/07/2012

Doing away with various outdated exemptions, exclusions and tax credits for sales tax, corporate income tax, personal income tax and severance tax would not be a tax increase, simply because the income is taxable and would normally be taxed. The only reason the income is not being taxed normally is because of a sweetheart deal to special interst groups. I don’t want to be taxed anymore than anyone else, but I sure as heck want everyone and every business to help share the load and that is simply not happening in Louisiana. The old saying that “many hands makes easy work of hard tasks” applies in this case, because right now Louisiana is being gutted so that a few special interest groups can benefit. The Stelly Plan was not repealed by Statewide referendum (that is how it was created), rather it was repealed at the insistance of Gov. Jindal by Act 396 SB 87 in 2008. While every reliable review of the Stelly Plan found that it was tax neutral, Gov. Jindal and his cronies managed to convince many people that it increased taxes. As a result of the Governor and the Legislature’s repeal of the Stelly Plan, the State of Louisiana has lost over $350,000,000 in tax neutral revenue each year since 2008, creating the revenue shortfall we are dealing with now.

10) Comment by 8.3 - 27/07/2012

"5th best state in business attitude", what is that? Thas all you've got. Given the factors of Louisiana misery enumerated below, doesn't appear that "businesses" are waiting in line even with all the state subsidies, is that what "business attitude" means? Globalstar sure liked the attitude, they took the money and ran. Without a thriving educational environment including research and infrastructure, and a prosperous, educated society, attitude is much ado about nothing with little meaning. Where will the consumers come from? The oil will run out, my boy and actually failure to invest for the future wisely (key word wisely, not for political expediency) in the past has brought us to the impasse of today. Isn't spending money to make money pretty much what business do? The new paradigm for state government appears to be cutting revenue and using the little left to lose money in half-baked schemes supported by delusional expectations. That is a business model and attitude? Seems like 5 years might have produced tangible results if the ideology worked so good. By the way, the solutions are obvious and proven. China is very aware of the implications of investing for the future while we complain about paying the lowest taxes in decades. The results ain't there, bra, sorry. Take a trip out of Louisiana to some more economically viable states, the difference is obvious, and many weren't blessed with oil. But they sure know how to exploit the da'es in Louisiana, don't they?

11) Comment by tradewinns - 27/07/2012

the stelly plan was repealed when the taxpayers complained about higher state income taxes. some of the business tax relief you mention help make la. the 5th best state in business attitude. i agree with the final example of stupid exemptions, if the business can not file the necessary forms on time, they should pay a PENALTY for not doing what they are suppose to do. but lannonmac, your solution to a budget shortfall is to increase taxes?

12) Comment by Lannonmac - 27/07/2012

Louisiana is a fiscal disaster zone because of the Governor’s repeal of the Stelly Plan and the multitude of tax exemptions, tax exclusions and tax credits in the State’s tax code. Repeal of the Stelly Plan cost Louisiana over $350,000,000 in lost revenues each year since 2008. To compound this shortfall in State revenue, various tax exemptions and tax exclusions exempt about 36% of taxable income produced from the extraction of Louisiana’s natural resources, accounting for a loss of over $432,000,000 in 2011. Even more shocking is that 88% of taxable corporate income in Louisiana is excluded or exempted from taxation, costing the State about $1,657,000,000 in lost revenues in 2011. The review of tax exemptions, tax exclusions, tax credits and tax suspensions is long overdue and I applaud the LA Legislature for the political will to scrutinize Louisiana’s tax code. For example, do we really need to give around $740,000 in tax credits to sugar cane growers to buy trailers? (R.S. 47:6029) or give sellers of alcoholic beverages a 3.3% discount on alcohol taxes for reporting their sales on time? (R.S. 47:354) If you don’t believe me, take a look at http://www.rev.state.la.us/forms/publications/TEB(2011).pdf.

13) Comment by DMJ - 27/07/2012

Stop cutting and pasting your own comments. Be creative.

14) Comment by tradewinns - 27/07/2012

income down, expendatures also go down. what is so difficult to understand? if education is not cut, where would you cut? it is easy to criticize what someone else does, so what would you do? i'd cut ALL social welfare programs to just the severly mentally and physically handicapped. all others i'd tell them how great N.C. and Texas are.

15) Comment by lovemykids - 27/07/2012

Bad policy is an understatement.

16) Comment by InPVille - 27/07/2012

State and local tax revenues are down in the current economy. The fact that the economy is down creates a greater need for assistance in public health and other services. . . a perfect storm of sorts. http://www.cbpp.org/cms/index.cfm?fa=view&id=1214 -[**]- 31 states have cut Public Health services., 29 states have cut services to the elderly/disabled, 34 states plus DC have cut K-12 education, 43 states have cut payments to higher education, 44 states plus DC have cut the state workforce. NORTH CAROLINA is included in all of the lists above. TEXAS is included in only the list of states cutting higher education payments. -[**]- Thirty one states have addressed or are projected to have budget shortfalls for the coming year. http://www.cbpp.org/cms/?fa=view&id=711 -[**]- All U.S. States seem to carry some debt http://www.usgovernmentspending.com/state_debt_rank -[**]- When an individual or government entity hasn't put aside sufficient funds to weather down times, difficult choices must be made. Most states seem to have chosen to limit how much further indebtedness they take on.

17) Comment by 8.3 - 27/07/2012

The regressives will have a feild day iwth this-"For decades, states like North Carolina and Texas invested in their colleges, and reaped enormous benefits." Yup, you reap what you sow: LA contains the area with the Highest Level of Senior Citizens Living in Poverty. LA Most Violent state (20 years in a row as of 2012) Longest prison sentence by a Congressman – LA’s Bill Jefferson LA last in Camelot Index LA 1st in corruption convictions per capita LA 49th in student performance and progress LA has worst drivers LA least peaceful state LA 50TH in women’s health LA 49th in Health LA 1st in Murders per 100,000 population. LA 1st in Laziness. LA has least affordable auto insurance LA 2nd worst lawsuit climate LA gets an ‘F’ for Children’s Dental Health LA 1st in deaths from diabetes. LA 1st in Personal Income drop. LA 1st in the number of forms of legalized gambling. LA 1st in rate of children under 5 on the brink of hunger. LA 2nd Most Dangerous State LA Worst State for Nursing Homes LA 1st in Homeless Children LA 1st in Percentage of Homeless Veterans. LA 52nd in population gain LA 2nd in bad auto loans LA 49th in Higher Education LA 2nd WORST state for businesses LA 49TH in Business competitiveness and retention LA 48TH in child well-being LA 1ST in gonorrhea rate LA has highest auto insurance rates in the nation LA 1st in the rate of corruption LA LAST in attracting college-educated workers LA 51st in child care LA 2nd in Black Homicides LA roads WORST in the nation. LA 49th in Savings LA 49TH in Longevity LA 50TH in per capita income LA 50TH in livability. LA 4th Highest Rate of Adult Obesity LA 1ST in wasting Medicare dollars LA 2ND in rate of men killing women LA 48TH in places to die LA 2ND in rate of healthcare uninsureds LA 49TH in social health LA 1ST in high school dropout rate LA public schools are 4TH worst LA 2ND cost of Homeowner’s Insurance LA 1ST in net population loss LA is ONLY southern state to lose population LA 1st in people moving out LA 1ST in Southeast in population exodus LA 1ST in rate of incarceration LA 1ST in number of child living in poverty LA 48TH in educational attainment of the population 25 years and over LA 1ST in number of women living in poverty LA LAST in bond ratings LA LAST in healthcare for seniors LA 1ST in abandoning public schools LA 2ND in DWI fatalities LA 46TH in Integrity LA is the 49TH “smartest state” LA WORST for healthcare for the elderly and disabled LA LAST in wealth of our citizens LA’s economy 49th out of 50 LA LAST in cash for research LA 1ST in teen use of steroids LA 1ST in the percentage of income used to pay rent LA 2ND in rate of poverty