Campus Budget Update
January 25, 2016

I recently joined other higher education leaders from across our state in a meeting with our new Governor, the Honorable John Bel Edwards. As you might surmise from recent press accounts, the subject of our meeting was the deteriorating condition of the state budget.

I regret having to inform you that, once again, we face a critical situation where state resources are concerned. Multiple factors, including the continued decline in the prices of oil and natural gas, as well as the deferring budget tactics of the prior administration, have resulted in a “perfect storm” where our state’s fiscal health is concerned.

In the current 2016 fiscal year which ends June 30, Louisiana faces a $750 million budget shortfall. Given persistently low petroleum prices, this shortfall is expected to exceed $800 million by mid-February when the Revenue Estimating Conference next meets. In addition, the 2017 fiscal year, which begins July 1, appears to be approximately $1.9 billion short of the necessary revenues to fund state expenditures at the same level planned in the current fiscal year.

These are stunning financial challenges that must be addressed quickly by the new Governor, his administration and the Legislature. Accordingly, late last Thursday we received word about a potential reduction in state funds for higher education in the current fiscal year of $131 million. Further information received Friday clarified that Southeastern’s share of this potential reduction is $5 million.

True to the character and demeanor that I had grown to know and appreciate even prior to his pursuit of his current office, Governor Edwards is facing this fiscal challenge head on and has announced plans to call a special session of the Louisiana Legislature in mid February. He plans to propose a set of actions, including revenue raising measures, that would forestall the worst impacts on higher education and set the stage for a more stable state budget going forward.

Make no mistake, given the cumulative impact of years of budget cuts at Southeastern and across all of higher education in our state, this is arguably the greatest financial challenge we have faced to date. Legislative approval of the Governor’s budget proposals is far from certain, and there will be difficult and disquieting days ahead as I along with other higher education leaders are asked to publicly portray the devastating impacts of potential budget-cut scenarios.

While these circumstances are dire, my feelings, and my message to you, are mixed and somewhat conflicted.

Although the immediate financial situation is daunting, I also have great hope because of the leadership of a new Governor who campaigned and was elected on a platform of support for higher education. While I believe his commitment of support for higher education is intact, he unfortunately faces an inherited immediate financial crisis.

We have all grown weary of years of budget cuts and the personal challenges they have caused for all members of our Southeastern family - students, faculty and staff. Regrettably, I am forced to ask you, once again, to draw upon the inner strength and commitment of our mission of service to our students. Fortunately, for the first time in a long time, I really do believe that there is light at the end of the tunnel - but our journey through the immediate tunnel in the months ahead will likely be fraught with travails.

As I always have, I will continue to apprise the campus of new developments.

John L. Crain