By Brian Blackwell, Message Staff Writer
Louisiana Governor John Bel Edwards took to the airwaves Thursday night in an effort to convince citizens of the state additional revenue is needed to shore up what he says is a nearly $1 billion gap in the state budget or the outcome would be dire.
If higher taxes and major cuts are not put into place, Edwards told voters, devastating consequences could occur such as closure of universities, elimination of health care services and even the possibility of no college football taking place in 2016. The state faces a $943 million shortfall this year and possibly a $2 billion deficit in the next fiscal cycle, according to Edwards’ staff.
“To stabilize our state’s budget we should not shy away from the fiscal right sizing that is needed,” Edwards said during his 12-minute speech that aired on television and radio stations throughout the state. “For me ‘right sizing’ requires that we get both the spending and revenue right. Focusing on one without the other would be irresponsible.
“But, I want you to understand that, if left unresolved — if the legislature does not choose a way to raise additional dollars to strengthen the budget — very soon, we will face unimaginable cuts to vital state services.”
Shortly before Edwards’ speech, Louisiana’s colleges and universities received an unprecedented notice by email from the Louisiana Office of Student Financial Aid it was suspending all payments of funds from TOPS, or Taylor Opportunity Program for Students. Commissioner of Administration Jay Dardenne announced the program was $28 million short of the scholarship funds necessary to last until the end of the semester.
At noon on Feb. 12, LOFSA Executive Director Sujuan Boutte said the suspension had been lifted and TOPS payments would resume the next week.
In a release from the governor’s office on Feb. 12, the day after his televised speech set off a firestorm, Edwards tried to assure students and parents alike.
“As I said last night, students on TOPS this semester will not see cuts. The universities will have to absorb the TOPS shortfall this year. Students will not receive any bills for this shortfall or lose any TOPS awards this semester,” the statement read.
“For this semester, LOSFA has only been able to pay universities 80 percent of students’ TOPS bills. This is due in part to the previous administration not budgeting properly for all the students who would be using TOPS this year,” Edwards continued. “Next year, as it stands, TOPS is only funded 25 percent, unless the legislature acts to change that. This means fewer TOPS scholarships will be awarded next year.
“That is why it is so important for the legislature to work with me to balance this budget and prevent future cuts to the TOPS Scholarship Program,” Edwards said.
Covington’s Annette Londono, a sophomore at Louisiana College, said while she receives some scholarships from LC, she may not be able to continue to attend school without the financial assistance she receives from TOPS.
“TOPS is a big factor in where I go to college,” Londono said. “Losing that scholarship money would hurt a lot of people here that I know. I hope to see it continued to be implemented.”
Louisiana College President Rick Brewer released a statement Friday morning urging Louisiana Baptists and others with an interest in the college to contact their local and state officials. He said the cuts will negatively impact the mission of LC and other higher education institutions in the state.
“Unlike other private institutions, Louisiana College has consistently sought to position our cost in a manner that is commensurate with public institutions,” Brewer said. “Our goal is to offer affordable excellence in a faith-based environment committed to a liberal arts education. This will never change.
“However, we believe the potential cuts announced February 12 that will be considered during the next legislative session could disrupt our mission,” he said. “We will stand in opposition.
“The state of Louisiana needs and deserves an educated populace, one that will be equipped to face the challenges of today and capitalize on the opportunities of tomorrow,” he continued. “Now is not the time to cease investing in our students, who are the future of our beloved state.”
Two prominent Louisiana Baptist lawmakers assured those in the state TOPS is not going away, but that it is temporarily suspended.
State Sen. Gerald Long, who is a member of First Baptist Church in Natchitoches, said that reflects the dire financial condition at the state level. Long said lawmakers will work hard to restore TOPS funding immediately.
“I have 100 percent confidence this suspension will be lifted and it will continue to be the cornerstone of higher education as it applies to how families will manage the high cost of education,” said Long, who serves as president pro tempore of the state Senate. “I’m extremely optimistic that as we head to Baton Rouge we will deal with this. TOPS is too important to the people of Louisiana in these tough economic times.”
State Rep. Mike Johnson, a member of First Baptist Church in Bossier City, said in a written statement TOPS will survive and legislators will fight to defend the program.
“Here is an important point to remember – the governor of Louisiana has no constitutional authority to unilaterally suspend TOPS payments because they are specifically dedicated funds by the Legislature,” said Johnson, who earlier in the week announced a bid to run for the 4th Congressional District seat. “TOPS is a contract between students and the state, and we must honor the commitment.
“Don’t let anyone convince you the state cannot cut unnecessary expenses elsewhere and operate more efficiently,” he said. “It must do so, and we will be introducing legislation to change the structure of the budget in a number of ways.
“Louisiana has the highest per capita expenditures of any state in the southern region, and we are 30 percent higher than the southern average,” he continued. “This is inexcusable – and we are going to fix it.”
Gene Mills, president of the Louisiana Family Forum, believes TOPS will be funded next year.
“TOPs is subject to legislative appropriation,” Mills said in a written statement. “The Governor has no authority to cut TOPS. Even if Gov. Edwards uses his unilateral authority to reduce the State General Fund by 3 percent and statutory dedications by 5 percent, the legislature can appropriate money in a supplemental bill in the regular session to fully fund TOPS. The Governor may line item veto it, but the legislature will override that veto.
“John Bell’s actual strategy last night came straight out of Donald Trump’s playbook,” he continued. “It is a classic bait and switch: tell them the sky has fallen on TOPS, and while they are fussing about it and the end of college football, force the largest tax increase in the history of Louisiana!”
Lawmakers will convene on Sunday for a special session of the legislature to deal with the budget problems. The session will end in early March.
Long said just making cuts will not solve the financial problems, he hopes the legislature will be very cautious before raising taxes. He reiterates the needs of prioritizing spending.
He said that as a Christian, every crisis presents an opportunity and this case is no different.
“I see this as an opportunity for the people of Louisiana to address long-term problems now so they aren’t problems in 5-10 years and put Louisiana on sound financial footing.
“It’s not going to be easy,” he said. “It’s going to take a lot of working together. We really need to put the political parties aside. This is Louisiana. We’ve always worked for the common good of the people and we really need to do that now.”
EDITOR’S NOTE: Louisiana Gov. John Bel Edwards took the airwaves Feb. 11 and laid out a shocking plan to address a $940 million shortfall. In his address he called closing colleges and universities, including suspending TOPS payments, which would effectively cancel the 2016 football season, and raise taxes. He painted a grim picture of major problems for higher education, health care and other services unless the Legislature agrees on how to come up with the money by June 30.
He painted a very bleak picture … worst case scenario — especially on the higher education front. According to a defiant Edwards, it meant issuing tuition bills to students on the underfunded Taylor Opportunity Program for Students scholarships, or not being able to meet payroll or offer summer school.
Realizing what a firestorm he had caused, especially with students and their parents, Edwards attempted to soften his tone on a Q&A on his website. In the Q&A, he claimed he either didn’t say it or he was being misunderstood. Here is both the address and Q&A. We will let you decide.
Text of Gov. Edward’s address on Feb. 11
Tonight I speak to you as no other Louisiana governor has ever spoken to our state, because the challenges have never been so great, nor the impacts so severe for all of us who live, work or go to school here.
Just as importantly, though, I speak to you as a fellow Louisianan, a former small business owner, a concerned husband and a father.
Since I took office exactly one month ago today, I have met with business and industry, working families, educators, and parents to share the news of our budget crisis and to discuss workable solutions. I have also met with legislators from across the state – north and South, urban and rural, republicans, democrats and independents to seek their ideas and share my own so that we can get down to the business of solving this mammoth problem as quickly as possible.
I have also received devastating facts from our state’s economists showing that we are in an unprecedented position. We’ve faced crises in the past – when flood waters rose and damaging winds bruised and battered us – we pulled together as one Louisiana. People from every walk of life, black and white, urban and rural joined hands and resolved to get our state back on its feet.
Once again, we must focus on solutions and not allow party labels and bickering to pull us apart.
This Sunday, just three days from now, state lawmakers, will convene in a special legislative session. For the next three weeks, we will take on the grueling task of correcting the largest budget deficit in our state’s history.
We know that behind every budget number are real Louisiana citizens.
People like Braden Wilson. Braden is 9 years old and suffers from Leigh’s Disease. He has been bedridden since birth and requires around the clock care. There’s nothing in the world Braden’s mom, Kodi, wouldn’t do for her family, and as a father of three I understand that. But the Wilsons and thousands of others like them are at risk of going bankrupt if the state program they rely on to help pay for Braden’s care is severely cut. It’s called the NOW Waiver program and they can’t survive without it. It is one of many that will take a major hit if we do not solve our budget problems.
I will also tell you about cuts we are facing that, without your support to fix, will close down higher education institutions all across our state.
As I sit here with you tonight, we now have a more than $940 million budget deficit for this current fiscal year, ending June 30. In the year that starts July 1, we are facing a $2 billion budget deficit. And because the Louisiana Constitution does not allow us to fix either of these budget deficits in the regular legislative session this year, we have just three weeks, starting this Sunday, to make the changes we need.
We will not be paralyzed in fear by the size of this challenge, nor would we falsely claim “the sky is falling,” but this is a historic fiscal crisis, the likes of which our state has never seen and absolute candor is required.
First of all, how did we get here?
While my predecessor inherited a $1 billion dollar surplus when he became Governor, I’ve been left with almost a $1 billion deficit for this year alone and a $2 billion deficit next year.
For seven years in a row, the state has had growing budget deficits. Year after year, the previous administration made temporary fixes using one-time funds to patch recurring expenses, knowing that eventually the well would run dry. And it has.
This year’s $940 million budget deficit is made up of two different categories:
First, the Revenue Estimating Conference – the panel of economists and financial experts our legislature relies on – met yesterday and told us that we are $570 million short of the revenue we originally expected for the year. That’s the first part of the problem. This is due, in part, to the drop in oil prices and a slowdown in sales and corporate tax collections. In fact, we’re paying out more in credits and refunds to corporations this year than we are collecting from them in taxes. This is not sound financial policy.
The other part of our $940 million budget problem this year is $370 million dollars in commitments we made that we don’t have the funds to pay for. This is partly due to irresponsible budgeting by the previous administration. They failed to account for how many people would need access to public health care, how many students would qualify for TOPS, how many people would enroll in our public schools, and how many state inmates would be housed by our sheriffs, among other failures. Now the money is not there to pay those bills.
I know we’ve all heard alarming talk about budgets before, but this is our reality. There are some who will try to downplay the severity of our problems for political gain. Some will claim our state’s economists’ numbers are false. Others will say we simply need to cut our way out of this mess. Remember, for 8 years, we’ve had a conservative Governor with a conservative Legislature, if stabilizing the budget were as easy as cutting spending and simply reducing state contracts, that work would have been done, but it hasn’t.
Today, the stakes are far too high for Washington-style politics, or for a crisis in leadership. I recall saying two things our state would never run out of were gumbo and gumption….now is the time for both.
To stabilize our state’s budget we should not shy away from the fiscal right sizing that is needed. For me “right sizing” requires that we get both the spending and revenue right. Focusing on one without the other would be irresponsible.
But, I want you to understand that, if left unresolved – if the legislature does not choose a way to raise additional dollars to strengthen the budget – very soon, we will face unimaginable cuts to vital state services. Here are some examples.
Our health care system is on the verge of imploding. The Department of Health and Hospitals is already facing severe cuts. And without new revenue, those cuts will be catastrophic. With larger cuts looming next year, safety net hospitals will close, starting in places like Lake Charles, Alexandria and Bogalusa.
The health care services that are in jeopardy literally mean the difference between life and death. Funding for vital services like hospice care and end-stage kidney dialysis would be impacted.
The New Opportunity Waiver program, also known as the NOW waiver, which provides much-needed help for families with developmental disabilities like Kodi Wilson’s, whom I told you about earlier, is under consideration for painful cuts and could be offered to far fewer people.
I don’t say this to scare you. But I am going to be honest with you. No more tricks. No more smoke and mirrors.
Let’s talk about our universities and community and technical colleges.
The Louisiana TOPS scholarship fund is now so depleted that, if the legislature does not raise revenue, fewer high school students will receive awards and current recipients are in jeopardy of losing their existing scholarships for next year.
Even with additional revenue, higher education this year will need to cut $42 million. This will be combined with a $28 million cut in TOPS scholarship funds that the universities will have to absorb, resulting in the largest mid-year cut in Louisiana history. However, if there is no new revenue raised this year, higher education will face catastrophic cuts over the next 4 months. And that comes on the heels of the largest disinvestment in higher education in the nation over the last eight years.
As I mentioned earlier, if the legislature fails to act and we are forced to proceed with these cuts, the LSU Ag Center and parish extension offices in every parish, and Pennington Biomedical Research Center will close by April 1st and the LSU main campus in Baton Rouge will run out of money after April 30th, as will the Health Sciences Center in Shreveport and LSU Eunice. There is no money left for payroll after those dates. The Southern University System, and University of Louisiana System, and the Louisiana Community and Technical College System are in the same boat: without legislators approving new revenue this special session, some campuses will be forced to declare financial bankruptcy, which would include massive layoffs and the cancellation of classes.
If you are a student attending one of these universities, it means that you will receive a grade of incomplete, many students will not be able to graduate and student athletes across the state at those schools will be ineligible to play next semester. That means you can say farewell to college football next fall.
The development of our technical and community college system has been one our greatest points of progress in the last two decades. The current budget realities will decimate these institutions as they are already preparing to lay off 1,200 employees at a time when business and industries primary concern is the development of a world class workforce.
These are not scare tactics. This is reality — an unstable state budget will not only hurt children and working families in our state, it will devastate communities, businesses and local government as well.
So, where do we go from here?
While I did not create the problem before us, as your governor, it is my job to fix it – and that is what I intend to do.
I am fully aware that I did not campaign on a platform of raising taxes, but the state’s deficit is now more than twice as big as anyone ever anticipated. So clearly, when the facts surrounding the problem change so dramatically, so must the solutions.
Here’s what I need you to do: We cannot solve this problem without support from you for the measures I am proposing to stabilize our budget.
First of all, I am proposing significant cuts, including a hiring freeze across state government, a reduction in state contracts, and I’m making more than $160 million in cuts to state government spending. I also propose to use $128 million from the rainy day fund and $200 million in non-coastal BP payments to the state to reduce the current year deficit.
Beyond those painful cuts and other proposals to fill our current $940 million deficit, and next year’s $2 billion deficit, I am proposing a set of revenue-raising measures to stabilize our budget.
These proposals include further reducing tax credits, suspending corporate tax deductions, and adding one penny of sales tax to our state’s four cent sales tax. I am proposing this penny as a bridge that will give us time to stabilize and restructure our state’s tax code. When that restructuring is complete, this penny sales tax will be removed.
As a part of this restructuring, I am also proposing an increase in alcohol and cigarette taxes.
So, as we begin this very hard work, I need you to call your representatives and your senators. You can find out how to do that using a link on the governor’s office website at gov.louisiana.gov.
Tell your legislators we need a responsible fix for this budget – a balance of necessary cuts and responsible revenue that will make our budget realistic and strong. When you hear others talk about solutions, demand specifics.
Together, we will solve this historic problem.
In Louisiana, we are resilient, and we are determined to meet any challenge that comes our way. We are experienced at working together in the face of great adversity, and I know our brightest days are ahead of us.
As we begin this critical work together, please join me in praying for our state, and I’m asking you to please pray for me and for all of our elected officials.
God bless you and your family, God bless the great state of Louisiana and God bless the United States of America.
Thank you all and good night.
Higher Education and the State Budget Crisis: FAQs released on Feb. 12
From the Office of the Governor
Q: I’ve heard that TOPS payments were being suspended. Does that mean that students will lose TOPS funding this semester? What about next semester?
A: TOPS awards that students received this year will not be disturbed. Students will not be billed for their TOPS awards this semester, nor will any students lose their TOPS awards this semester. Next semester is uncertain at this point. Unless legislators raise revenue, TOPS is currently only funded next year at 25% of its usual yearly funding.
Note: TOPS is $28 million short in funding this year for what it needs to pay colleges for students’ bills for the rest of this semester. However, universities and colleges will have to absorb that $28 million – which will feel like a cut to those universities and colleges. The reason we are in this situation is because the previous administration did not properly budget enough money to pay for the real number of students on TOPS this semester.
Q: Why is Gov. Edwards taking away TOPS funding and threatening to close colleges and universities?
A: Gov. Edwards is not taking away TOPS funding, nor threatening to close colleges and universities. The governor is working to try to save TOPS. The governor is informing the people of Louisiana that the previous administration did not budget enough money to pay the full TOPS bill for this year. That has forced the Louisiana Office of Student Financial Assistance (LOSFA) this spring semester to pay only 80% of each student’s TOPS bills to that student’s university because TOPS was not fully funded for this year. Gov. Edwards is not in favor of cutting TOPS or closing any college or university. However, the budget problems are so severe that drastic changes will have to take place if the legislature does not act during the special session to raise revenue.
Q: How was the decision made to take TOPS funding away? Who made this decision?
A: The previous administration budgeted for too few students to use TOPS this year. That means that before the year ran out, TOPS money ran out. LOSFA, the organization that pays TOPS scholarship money to the various universities students attend, has only been able to pay each university up to 80% of each student’s bill this spring semester. Now, Gov. Edwards and this current legislature are the ones tasked with either cutting the TOPS program or finding the money to pay for it.
Q: How will this affect my child currently enrolled at a Louisiana college or university?
A: Students who are on TOPS this semester will not be affected this semester. No student will be billed for their TOPS scholarship this semester or lose their TOPS award this semester. However, fewer TOPS awards will be awarded next year because TOPS is only 25% funded next year at this point, unless legislators work with the governor to find more revenue. Therefore, some students on TOPS this semester may not awarded a TOPS scholarship next semester.
Q: How will this affect high school students who meet the qualifications for the TOPS scholarship?
A: Unless the legislature raises new revenue to stabilize the budget, fewer high school students who are applying for TOPS scholarships next year will be awarded TOPS next year. Again, this is because currently only 25% of TOPS funding is available for next year, unless legislators work with the governor to find new revenue during this special session. Typically, Louisiana spends more than $285 million a year on TOPS. Next year, there are no state general fund dollars available for TOPS. The Commissioner of Administration has said that the only money currently available for TOPS next year is $65 million from a small portion of the Tobacco Settlement Fund. This money is constitutionally dedicated to TOPS.