Six Amendments in Six Days: Amendment 2

The Public Affairs Research Council of Louisiana helps us break down the six constitutional amendments on the ballot. In this article, we are talking about amendment number two.

CURRENT SITUATION

Public higher education management boards had the autonomy to raise or lower tuition rates for schools in their systems until a 1995 constitutional amendment defined public college and university tuition as a “fee” imposed by state agencies and therefore subjected all rate changes to legislative scrutiny and consent. The four management boards oversee the Louisiana State University system, the University of Louisiana system, the Southern University system, and the Community and Technical College system. Each board is comprised of 15 members selected by the governor and confirmed by the Senate to serve staggered six-year terms as well as one student member chosen annually.1 The Board of Regents has a broader mission of establishing higher education policy for all Louisiana colleges and of helping determine the allocation of resources.

Some tuition authority has been temporarily granted to higher education in recent years. In 2010, Governor Jindal signed the Louisiana Granting Resources and Autonomy for Diplomas Act, or LA GRAD Act. This law granted limited autonomy to public postsecondary institutions by permitting annual tuition increases of up to 10% if the respective management boards committed to (and continued to make adequate annual progress toward satisfying) a host of established performance objectives set by the Board of Regents. The objectives covered student retention, graduation rates, research productivity, and institutional efficiency and accountability. Additionally, the Regents would compile the information and annually present the results to the Legislature and governor. These contractual agreements between college management boards and the Board of Regents were six years in length, meaning that many university systems that originally contracted in the 2010-2011 academic year have reached the end of their initial performance agreements. The LA GRAD Act allows the management boards and the Board of Regents to negotiate subsequent six-year performance agreements if they choose to do so.2

Colleges receive revenue from legislative appropriations, tuition and fees, federal and private-sector grants, donations and various self-generated revenues such as dorm rent. Direct state general fund appropriations from the state to public postsecondary institutions have dropped precipitously. Since the 2008 fiscal year, direct support has fallen by approximately 71%, the largest proportional state reduction in the United States. The LA GRAD Act allowed colleges to compensate for this divestment by raising tuition. Even adding in other sources of increased financing such as tuition and dedicated funds, colleges on average took a 6% cut. Meanwhile, award amounts disbursed by the Taylor Opportunity Program for Students (TOPS) covered 100% of tuition for qualified students at public universities and colleges. Consequently, the state’s cost of the scholarship program grew as the price of tuition grew. However, Act 18 of the 2016 regular session set TOPS award amounts at 2016-2017 levels, meaning that all college students, regardless of their TOPS award status, will be responsible for finding other means to pay for future tuition increases unless the Legislature decides to take further action. More immediately, cuts in the most recent budget mean that students will get 70% of what would normally be funded by TOPS for this academic year.

PROPOSED CHANGE

This amendment would allow the higher education management boards to set annual tuition and fee amounts without legislative approval. To provide a sense of scale, the Legislative Fiscal Office estimated that a 1% increase in tuition would generate approximately $12 million in additional revenue for higher education. The actual increase would depend on how much each board increased tuition. Tuition and fee increases would cost more for students and their parents while also providing additional funding for colleges and universities if enrollments do not fall steeply.

ARGUMENT FOR

Louisiana remains one of just two states that do not allow colleges to make autonomous decisions regarding tuition and fee levels at their respective universities. It is the only state that requires a two-thirds vote of the Legislature to change tuition and fees. Because the Legislature is sometimes slow to act, public universities across the state are often unable to price themselves in a competitive manner or raise enough tuition revenue to deliver appropriate education services to their students. Among the many considerations, the state’s colleges must factor rising competition for students, mounting competition to recruit and retain superior faculty, growing expectations from industry for better prepared graduates, annually escalating pension liability payments, and the prospect of the state’s general fund appropriation decreasing in the future. The Legislature may also allow political considerations to outweigh academic concerns when deliberating on tuition rates.

Louisiana can expect colleges and universities to be more efficient. Because Act 18 of the 2016 Regular Session sets TOPS awards at 2016-2017 levels, colleges will need to stretch dollars as far as possible before increasing tuition for students now paying more out of pocket. If granted the freedom to set tuition rates, colleges may elect to charge students in some degree programs different rates per course hour than those in other programs. The ability to impose differential tuition rates on degree programs with higher instructional costs (e.g., business, health care and engineering programs) will allow schools to match revenues more effectively with costs, improve program quality, and respond to market demand for various types of college degrees. For those who argue higher education should be more business-like, this authority would force colleges to reassess efficiency across their operations.

Additionally, the Legislature and governor would maintain control of board compositions after the adoption of the constitutional amendment. The governor currently appoints board members who are then subject to approval by the state senate. This mechanism ensures that the Legislature and governor are still able to respond to the implementation of injudicious fee and tuition schedules or severe board mismanagement.

ARGUMENT AGAINST

There is little evidence in recent years that the Legislature would not raise tuition when appropriate. As stated earlier, tuition has almost doubled since 2007. If colleges still feel that tuition levels are too low, they can make a case to the Legislature.

The state Legislature has a responsibility to ensure that all Louisiana children have access to a quality and affordable learning experience. Instead of passing on tuition-raising autonomy to the boards of supervisors, legislators should focus on increasing direct investments to public colleges and universities to ensure that schools are able to provide the best education possible rather than allowing colleges to become less affordable.

Louisiana is not as different from other states as it might first appear. While Louisiana might be only of one of two states that directly controls tuition, other state legislatures exert indirect influence.

Giving boards the ability to differentiate tuition rates between degree programs may also put valuable degrees out of reach for low-income and minority students. As the price of tuition increases in these fields, demand may drop and less revenue may actually materialize. Competitive programs in relatively more expensive programs such as business, engineering, and health care might also become further dominated by students from affluent families and could run counter to the state’s workforce needs.