In the final two days of the legislative session that ends today, Thursday, June 6, the Legislature reached agreement on the state's budget for next fiscal year that begins July 1.
While it could take several weeks for us to know the exact impact on our state funds for next year, the final state budget agreed to by legislators appears to avoid significant additional reductions in funding for higher education. In addition, Governor Jindal is expected to sign a bill approved by the Legislature that would allow institutions to increase "building use" fees, generating funds that can be used for repair and maintenance.
While I am cautiously optimistic about the state budget outcome from the legislative session, it is important to remind the campus community that we still have some significant challenges to manage.
One key issue is the status of the budget in the current fiscal year. As I explained in my campus update on July 19, 2013, some of the steps used to balance our budget this year are not sustainable. In effect, our current budget reflects a structural deficit - the amount of revenues from normal recurring sources is less than the amount of normal recurring operating expenses.
This underlying structural budget problem, which has resulted from the cumulative reductions in state support over the last several years, will recur with the new fiscal year. Going forward, as we work to build our budget for next fiscal year, and plan for the future of the university beyond next year, we have to shrink this structural deficit to ensure the long-term financial viability of our institution.
As further details are available about our state funding for next year, and the resulting impact on our institutional budget, I will continue to keep the campus apprised.