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Louisiana Considering Tax Hikes to Avert More Higher Ed Cuts

The Louisiana Senate is considering a House-approved budget this week that includes several tax increases to avoid further higher education cuts.  Senate approval isn’t assured, and Governor Bobby Jindal vows to veto tax increases not offset by other tax cuts.  Still, the House action is welcome news after several years of serious cuts to Louisiana’s public colleges and universities forced students to assume a much larger share of the state education tab.  

Tuition has risen dramatically at Louisiana’s public four-year institutions — by 67 percent since the recession started — but those increases fall far short of covering losses in state funding.  To fill the gap, many schools have cut their own budgets, partly by eliminating staff and courses.  For example, the Louisiana State University System furloughed 727 employees, laid off another 210 staff and faculty members, and cut 217 academic programs between 2008 and 2012.

Louisiana has cut higher education funding per student by 42 percent since 2008, after adjusting for inflation.  Only Arizona has cut more.  (See graph.)

Now, lawmakers apparently have reached their limit.

Facing a $1.6 billion budget shortfall for the fiscal year that begins July 1, the House passed 11 tax bills, raising roughly $600 million in additional revenue, and devoted almost all of it to preventing further cuts to higher education.  The bills shrink personal and corporate income tax breaks, boost the cigarette tax, cap the costly film tax credit, and cut tax breaks for oil and gas companies.

If Governor Jindal vetoes the budget and lawmakers don’t override him, the state’s public two- and four-year colleges could face another damaging round of cuts, which may further boost tuition, jeopardize education quality, and make college even less affordable.

The proposed tax increases would be a good first step to prevent even more higher education cuts.  But, like many other states, Louisiana will need to do much more to reverse the damage caused in recent years and improve access to quality higher education.