The LSU Paul M. Hebert Law Center and LSU AgCenter generate large amounts of revenue within the LSU System, according to the 2014-15 semiannual financial reports.
Despite their recent financial realignment with the main campus, the centers’ annual revenues are still calculated and reported independently of LSU’s restricted and unrestricted revenues.
The 2014-15 semiannual financial report, which ended June 30, shows the Law Center brought in $24.7 million in unrestricted revenue within the aforementioned financial period despite financial challenges, causing the Law Center to raise tuition. This revenue amount is nearly the same as it was in the 2013-14 fiscal year for this reason.
Gregory Smith, associate dean for business and financial affairs for the Law Center, said the tuition increase is something the Law Center applied for through LSU out of a need to self-generate revenue after state appropriations were cut by about 25 percent.
“We had to self-generate, and the way to do this would be through increasing tuition and fees or having larger class sizes while holding tuition and fees constant,” Smith said. “We thought class size wouldn’t change much, that we’d still have to deal with the problem of state revenues declining, so this is what was chosen.”
While there were several tuition increases over time, one of the most recent requests Law Center representatives made in July 2013 saw a 5 percent raise in tuition rates after the school suffered a reduction in state financial support.
Smith said an additional 6 percent increase approved in June 2014 also affected law students’ tuition rates.
“There’s been a dramatic change over time,” Smith said. “In more recent times, like in 2009 and 2010, [the Law Center] had about $10 million of allocated state support. More recently, it’s declined close to $5 million.”
When the university faced the threat of an up to $60 million budget reduction earlier this year, raising tuition was never a proposed solution to covering this funding gap. Smith said curtailing programs and laying off employees were initial ideas to maintain funding.
“We were trying to figure out how we might react if that happened,” Smith said. “We looked mostly at cost cutting.”
Per the AgCenter’s revenue and expenditure summary report, it generated nearly $90 million in unrestricted revenue, most of which came from the AgCenter’s general fund.
LSU Vice President for Agriculture and College of Agriculture Dean William Richardson said an average 65 percent of the AgCenter’s research and extension budget is supported by annual state appropriations. The AgCenter also receives federal funding under the land grant and the Smith-Lever and Hatch Acts.
Richardson said the amount of state appropriations varies each year, and the AgCenter self-generates the remaining percentage through income from farming and research operations, gas and oil revenue and intellectual property income.
Budget cuts took a toll on the LSU Health Sciences Centers and the AgCenter because it has no support from tuition dollars, Richardson said. Over time, the AgCenter has had to reduce its workforce by 350 people because of the cuts.
“There’s lots of uncertainty right now where this will go,” he said. “We can’t go to students and make up for that loss of revenue. The cuts we feel are real.”
According to the 2014-15 semi-annual financial report, the LSU main campus generated roughly $467 million of the $475 million budgeted in unrestricted operations revenue. The original total budget amount was set at more than $503 million, according to Board of Regents revenue and expenditure data provided by the Office of Budget and Planning.
LSU Associate Director of Budget and Planning Helen Reaux said unrestricted revenue comprises state appropriations and self-generated revenue, most of which comes from tuition and other required fees. However, restricted revenues include grant and contract activity, auxiliary units, endowments, student fees and other self-generated funds.
The main campus’ beginning account and fund balance in restricted revenues totaled over $146 million in that same year, according to the university’s semiannual revenues and expenditures executive summary provided by the Board of Supervisors.
“The majority of funding for LSU’s daily operations comes from unrestricted revenues since most restricted funds are earmarked for a specific purpose,” Reaux said. “The unrestricted funds are used for the day-to-day operations of the university and do not carry forward across fiscal years.”

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Nicholas Martino

The Law Center is compared to the Ag Center to see which of the outer school pulls in the most revenue, on Sept. 01, 2015, at LSU.