Message from the President
December 16, 2016
The Louisiana Constitution requires the State budget be brought into balance in a timely fashion once a deficit has been recognized. As has been reported in the media, last month the State Revenue Estimating Conference concluded that the 2016 fiscal year State budget, which ended June 30, 2016, was approximately $300 million short of the revenue necessary to cover expenditures.
At that time, the JLCB (Joint Legislative Committee on the Budget) and the Administration of Governor Edwards agreed to delay until this month the decision about how to address that $300 million shortfall.
The Administration's plan to address the shortfall, approved yesterday by the JLCB, includes a $12 million mid-year reduction in funding for higher education. Southeastern's part of that reduction is approximately $440,000.
Given the uncertainty regarding the ultimate impact of multiple tax and other budget-related changes enacted by the Legislature last year, we have been concerned about the possibility of mid-year budget reductions in the current fiscal year. We were therefore very conservative in creating the university's operating budget and have been cautious in filling vacancies resulting from retirements and resignations. Accordingly, we will be able to use related attrition savings to address the $440,000 mid-year reduction in State funding.
Even more unsettling are concerns related to a shortfall in the current fiscal year State budget. State officials have suggested that disappointing tax collections and the continued weakness in petroleum prices could result in an additional $200 - $400 million shortfall.
The State Revenue Estimating Conference and JLCB will meet again in January to formally address any additional shortfall. I am concerned that the impact on higher education could result in an additional mid-year cut potentially greater than the immediate $12 million, given that some of the deficit reduction measures utilized to address the current shortfall will not be available again in January.
As always, I will keep the campus apprised of any new developments.
John L. Crain