07262017Headline:

In the nick of time: Louisiana Higher education is spared major cuts

By Meghan Henoumont

 

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members of Delgado City Park campus student council at the higher education rally in Baton Rouge. Picture by: Meghan Henoumont

 

With only two hours remaining for the Louisiana legislature’s 2015 session a budget was finally approved on May 21. First the good news: Higher education will not be cut by the original proposed amount of $392 million this fiscal year. Instead, the cuts will total $40 million, meaning higher education will have a budget similar to last year.

Now the bad: The divesting cuts were narrowly avoided by approving a funding arrangement to appease Gov. Bobby Jindal, an arrangement that many lawmakers have compared to “ money laundering” and called “stupid” according to The New York Times. Students at state colleges are being asked to fund their education by paying an “assessment” of $1,500 that they don’t actually have to pay.

The plan is to raise the cigarette tax to generate millions and cut tax break rollbacks to local business owners and the film industry, which helps save higher education but still leaves a gapping estimated shortfall of at least $155 million, that falls mainly on Louisiana’s healthcare system.
These short-term fixes ride on the back of a plan the Jindal administration has deemed the Student Assessment for a Valuable Education (SAVE) Plan. At the heart of the 2016 state budget and the source of most of the debate lies the fee that falls on students that doesn’t actually exist and the cigarette tax hikes and tax break rollbacks that are not technically raising taxes, but are.

The program would assess a fee of $1,500 per higher education student, which raises around $350 million of revenue, but only on paper, Students will not actually pay a thing as they will receive a tax credit for the same amount, nor will universities actually receive any new money. However, SAVE would create a tax credit that Jindal could use to offset the new revenue that legislators are trying to raise.

Even legislature members who voted on the bill were unsure of its goals. State Representative Blake Miguez told The New York Times that, “It’s an embarrassing bill to vote for. But with so much on the line and the governor being hardheaded, I had to take one for my district.” To save higher education lawmakers had no choice but to approve the governor’s latest plan that most find questionable. “Everyone knows its nonsense,” said state treasurer John Kennedy. “It’ll make [Jindal] happy, and we can always come back and get rid of it.”

Louisiana legislature members weren’t the only ones confused by the SAVE Plan and its implementation. Jordan Wissman of Slate said that the plan adds to “the illusion that he didn’t raise taxes.” “Jindal created a fake fee for students, and a fake tax credit to balance it out, which ultimately leads to no money changing hands,” Wissman said.

So why would Louisiana legislators agree on a plan that raises no new revenue, lowers no one’s tax burdens and leaves the $1.6 billion state deficit for the next governor to deal with next year? The Jindal administration would not approve the legislator’s other ideas, as Gov. Jindal does not want to appear to be raising taxes, although it’s the very thing that many lawmakers say he is doing.

“This is a vehicle that allows Governor Jindal to raise taxes, period,” said Robert Travis Scott, the president of the nonpartisan Public Affairs Research Counsel of Louisiana. “There is no way you can explain that it’s an offset.”

In the end the budget that has been approved kicks Louisiana’s fiscal troubles simply further down the road for citizens and a new governor to worry about next year. As for Jindal, who is expecting to announce his run for presidency this month, he himself is his most outspoken supporter saying, “We view this as a very successful session.” If he says it is, it must be.

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