LSU could miss out on more than $16 million in extra funds next year if secretive financial wrangling by the LSU Board of Supervisors is approved by the Legislature.
The money comes from the Higher Education Initiatives Fund, established by the state to give institutions money for certain initiatives, according to the Board of Regents.
The state plans to withdraw $97 million in self-generated funds — mostly tuition and fees — from higher education institutions statewide in this fiscal year, according to Wendy Simoneaux, chief financial officer with the LSU System.
Those funds will be placed in the HEIF — the institutions will get the money back this year with state general dollars.
The money in the HEIF will then be carried into the next fiscal year, which starts in July.
Policymakers are calling the coming year the “cliff year,” when expiring federal stimulus funds from the American Recovery and Reinvestment Act will create the steepest budget hole of the past few years.
The controversy surrounds how the HEIF money will be distributed in the cliff year.
When the Board of Regents created a formula to distribute funds, it based the amount allotted to each campus on tuition metrics in the LA GRAD Act and fee income, Regents documents show.
Under that formula, LSU would receive $27 million from the fund.
The LSU System, however, selected a different method to distribute its $43 million share of the funds, Simoneaux said.
The System chose to distribute money to offset individual institutions’ funding lost from the expiring ARRA funding.
Some institutions in the System, like the LSU Health Science Centers in New Orleans and Shreveport, require more to make up that gap than others. That’s because those institutions don’t make much money from increased self-generated revenue like tuition or fee increases.
Institutions that do — like LSU — have smaller ARRA holes to make up because they raise more money from tuition and fee increases.
Thus, the System formula would distribute only $10 million to LSU — $16 million less than the $27 million the school would receive under the Regents’ calculations.
By contrast, HSC-Shreveport would receive $631,591 under the Regents’ plan — but would get more than $7 million under the System plan.
Simoneaux said the Supervisors’ distribution echoed calculations in Gov. Bobby Jindal’s executive budget.
The System’s method prevents budget cuts to all institutions in the System. But advocates of larger schools like LSU say it cheats deserving larger universities from money they deserve.
“These are tuition dollars paid by students at the flagship campus,” said Sean Reilly, co-chair of the Flagship Coalition, a group of business leaders lobbying on behalf of LSU. “The Board of Regents has recommended that these funds go to the campus of origin. We think the Regents are right.”
Reilly said while LSU isn’t exactly being cut, the campus could certainly use the cash.
“We don’t have the full budget picture yet, and these funds could prevent devastating cuts to the flagship institution,” he said. “Hopefully, [LSU System President John Lombardi] and the Board of Supervisors will take this into consideration again.”
LSU administrators themselves have repeatedly refused to comment on the issue.
The System formula was approved by the Board of Supervisors the Friday before Spring Break. When LSU System officials presented their HEIF distribution, they did not mention the Regents’ distribution metrics.
Lombardi drew criticism earlier this week for meeting with Board members before the April 15 meeting.
Because HEIF funds are included in the state’s supplemental budget — a bill that makes adjustments for the end of the fiscal year — it requires legislative approval.
 
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Contact Matthew Albright at [email protected]