BATON ROUGE---LSU System President William L. Jenkins on Tuesday said pending state budget cuts of $97.6 million to the LSU System, in a worst-case scenario, could cause some LSU campuses to immediately seek financial exigency, force closure of the LSU Medical School in Shreveport as well as the LSU Nursing School in New Orleans while seriously threatening the status of LSU A&M as Louisiana's Flagship University.
In addition, Jenkins said, the university system could be forced to immediately impose major personnel and program cutbacks, such as ending the LSU Health Science Center's Rural Scholars Track program that trains physicians for areas with poor access to health care.
An estimated 645 LSU System employees could be laid off statewide and an additional 676 could be furloughed for indefinite periods. Thousands of students also could see their degree programs ended. A closure of LSU's Shreveport medical school and the LSU Nursing School alone could affect more than 975 nursing students in New Orleans and 462 medical students in Shreveport.
At the LSU Health Care Services Division, which is facing a $24.5 million reduction in state funding for its 10 hospitals and 500 physician clinics, LSU System Vice President for Health Care and Medical Education, says inpatient hospital and emergency beds will be taken out of service; operating suites shut down; mental health emergency rooms closed; in-patient psychiatric services ended and multiple specialty clinics shut down statewide. The reductions will mean a projected loss of $80.6 million in federal matching funds.
Including net changes to alternative means of financing like statutory dedications, interagency transfers, and self-generated revenues such as tuition and fees, the overall impact of pending reductions for the LSU System would be almost $103 million.
"While we hope none of these cuts become a reality," Jenkins said, "the truth is that if the Legislature doesn't reconsider these reductions, we could be forced to quickly impose a series of appalling cuts to our institutions, without the kind of careful planning and deliberation that takes into account the long-range consequences of such radical actions."
Flagship Campus Chancellor Mike Martin put it more directly in a memo to Jenkins about the impact of possibly losing an additional $43 million in state money for his campus, writing, "Declaring financial exigency is a last resort of a genuine crisis. Still, under the Board of Supervisors definition of exigency, the campus may have qualified for a declaration already. It's imperative we step back from this impending disaster."
In a follow up message to Jenkins, Martin added, "Once exigency is implemented, several colleges will have to be closed and LSU will be forever different. This is a generational decision; it would take decades to repair the damage done to our students, faculty, and reputation. LSU would immediately experience a decline in enrollment and retention and graduation rates will decrease within a few years."
Attached is a detailed spreadsheet, illustrating projected state budget cuts to LSU System institutions, including reductions that could be necessary if the elimination of one-time money in the Executive Budget is upheld by the Legislature. It should be noted that for both the LSU AgCenter and Pennington Biomedical Research Center, both institutions are held at current funding levels but could face additional cuts later in the fiscal year as spelled out below.
"No matter what the Legislature finally decides the LSU System and the Board of Supervisors will be cautious in implementing budgetreductions in ways that minimize impacts on our faculty, staff and students in addition to the hundreds of thousands of Louisiana citizens LSU serves daily around the state," said Jenkins.
What follows is a rundown of potential effects from the proposed budget reductions prepared by chancellors and administrators at LSU System institutions.
Impact of Proposed Budget Cuts on the LSU System
Major academic programs could be eliminated
Outreach efforts such as extension services could be curtailed or significantly downsized, including reductions in personnel and the closing of research stations, as well as an end to popular statewide 4-H programs.
Ranks of research scientists and clinicians could be trimmed.
Faculty hiring and critical clinical services could be curtailed at LSU Health facilities.
Some LSU hospitals, particularly in rural areas, could be forced to cut back or suspend operations entirely.
An estimated 108 unfilled positions statewide could be eliminated.
New facilities could be mothballed such as the new clinical research and imaging centers at the Pennington Biomedical Research Center in Baton Rouge.
Ultimately, cuts could cost students, generating the urgent need to seek new rounds of tuition and fee increases.
Faculty and staff morale, already low because of no increase in faculty or staff pay in four years, could be further damaged, prompting more of our best and brightest to leave, impacting LSU institutions for generations to come.
? Elimination of one or more significant academic units.
? Adversely impact research funding.
? Adversely impact mission-specific services.
? Although LSU A&M has met the criteria under the LaGrad Act and has increased tuition by 10 percent, the campus is netting approximately 78-80 cents per dollar as tuition increases and the accumulated increased implemented over the past three years do not come close to offsetting the approximately $125 million in reduced state appropriations. A further cut could exacerbate this differential.
Pennington Biomedical Research Center
? Pennington Biomedical has received one of the highest cuts in the LSU System since the beginning of FY 08-09 at 18.9%. At the same time, the Center has seen a 22% increase in space and related operating expenses. Cumulative loss of funding since the beginning of 2008 has been $10.8 million and Pennington Biomedical has not had the ability to backfill with tuition or fees.
? The "hold harmless" position in Board of Regents distributions as they now stand is absolutely essential to keep Pennington from losing its critical mass of successful research scientists and associated grant and contract income. Research is a business and faculty are the entrepreneurs. Achieving a sustainable level of state funding could attract long-range investment from federal andprivate sources and promote economic development.
? Even at the "hold harmless" level, Pennington does not currently have the means to make the top two floors of its new Clinical Research Center functional or to open its new Biomedical Imaging Center to full capacity. There is a potential for offsetting a portion of the operating costs with grant funding. However, to use the space to its potential could require an additional $3 million in recurring base funding. A recent analysis indicated that properly staffed space at Pennington generates between $349 and $1,278 per square foot
? Pennington is also unable to recruit research scientists and clinicians to staff its new facilities, and these researchers are the engines that drive the institution's self-generated funding in the form of new grants and contracts. Clinical/imaging research pods (1 MD/researcher and 5 associated staff) cost the center about $1M each, and at least 2 are needed to begin full utilization of new and existing facilities ($2M total). In order to reach a level of sustainability Pennington needs a base level of funding to maintain a critical mass of scientists in order to attract grants, remain globally competitive, retain faculty, and become less reliant on state funds.
Paul M. Hebert Law Center
? Would not be able to hire a Director of Academic Support to work with at-risk students and enhance retention, graduation, and bar passage rates (all GRAD Act performance metrics)
? Would have to curtail faculty hiring and programs necessary to support and promote Law Center's critical Energy Law initiative
? Could reduce scholarship support needed to attract highly qualified and diverse students in competitive law school environment
? Could require further staff reductions and/or faculty/staff furloughs
Please note, BOR projections significantly understate the financial impact of the budget cuts (now at the 30 percent level of state general funds) by assuming a 10 percent tuition increase, with no provision for tuition discounts when our tuition discounts run 25-28 percent (slightly above peer norms but being brought into line this year).
Chancellor Jack Weiss notes that there is a competitive marketplace for law schools that points strongly toward a tuition increase in the range of 5 percent, not 10 percent, and his planning assumes an increase at that level, not 10 percent.
LSU Ag Center
With the continued reduction of both state and federal dollars, maintaining LSU AgCenter program vital to the public is becoming increasingly difficult. State funding has seen consistent yearly reductions since 2008, and recently, federal funding for special research grants was terminated, while capacity funding for research and extension support has been reduced.
Because the AgCenter is a nonstudent campus, increases in tuition and student fees are not available as a revenue source.
Passage of the GRAD Act provided no relief for the AgCenter. Self-generated revenue is used to the extent possible, but a declining number of programs and employees create a negative effect. Competition for external sources of funding is fierce, and granting agencies increasingly require matching funds or personnel effort at a time when these AgCenter resources are declining.
Additional reductions in the LSU AgCenter's operating budget could require the elimination of additional positions, closing additional research stations, and the elimination and reduction of additional research and extension programs including 4-H youth development.
? Freeze vacant full-time faculty positions (9)
? Freeze vacant recruiting, IET, and facilities staff
? Increase faculty workload to 15 hours
? Layoff unclassified staff in:
o Student Advising Center
o Enrollment Management
? In College of Professional Studies, Department of Teacher Education
o Furlough remaining unclassified and classified staff
o Move all educational technology staff to student technology fee
o Move institutional advancement staff to foundation accounts
o Reduce scholarships by 50 percent
? Jeopardize reaffirmation of accreditation (2013-14)--will be hard to prove sound financial base and stability
? Reduction in personnel
? Reduction in services and academic programs
? Reduction in Pathway services
? Increase in class sizes
? Decrease in number of class sections
? Loss of students
? Further reduce potential for increasing graduation and retention rates
? New $9 million classroom building coming online in summer 2012 will increase operational costs
? Terminate or layoff large numbers of faculty and staff.
? Reduce scholarship offers to students.
? Severely reduction of course offerings, delaying student graduation.
? Possible loss of accreditation of some programs.
? Possible reduction of academic programs.
? Failure to meet GRAD ACT goals for FY 2013-14, which could lead to
further financial problems.
LSU HSC Shreveport & Hospitals
This proposed budget could reduce the LSU School of Medicine in Shreveport to a total revenue budget of $ 49.3 million with total state general funds direct of $27.3 million. The total earnings will be insufficient to keep the school operational. This could force closure of the medical school.
For the hospital the total revenue budget of $356 million with $6.8 million in state general funds direct will leave a shortfall for the hospital that will not allow it to back fill the School of Medicine even to $30 million. Any cuts of this magnitude could reduce the income of the hospital resulting in closure of the medical school, loss of faculty, and diminished patient care. This hospital cut does not include the expected additional cuts from the DHH.
LSU HSC New Orleans
? Do away with several major programs
? Reduce a significant part of Nursing School and possibly eliminate entire school.
? Eliminate Rural Track Program