The Louisiana Board of Regents released financial health scores for state universities Wednesday in conjunction with its Elevate Louisiana! initiative.
The University’s main campus received a composite score of 3.90, placing it safely above the significant financial stress marker of 1.75. The University system received a 2.90 average overall.
The composite scores were calculated using University assets, revenues, expenses and debt from the University’s most recent year-end audited financial statements, according to the report. Scores were ranked between zero and five, with zero indicating poor financial health and five indicating excellent financial health when compared to similar national institutions.
Commissioner of Higher Education Joseph Rallo said producing annual financial health statements is an important step toward keeping higher education at the top of legislators’ minds. Financial health is important all year, not just in times of financial hardship or when higher education budgets are facing cuts, he said.
Ensuring institutions’ financial health is a small facet of Elevate Louisiana’s overall mission.
Rallo said the first phase of the initiative focused on establishing an aspirational brand for higher education in Louisiana. After meeting with regional stakeholders, the Board chose education and innovation as the driving forces behind the Elevate initiative.
Rallo said this initiative is part of an overhaul of the Board’s master plan in light of continuing financial limitations. In under 10 years, the Board has shifted from an approximately $1.5 billion budget to less than $700 million for all state higher education institutions. It is no longer feasible to attempt the same level of operation with a lesser budget, Rallo said.
The impacts of decreased funding are increasingly evident.
“Louisiana has some great institutions, but at the same time, we’re pretty much not highly ranked in anything,” he said.
Elevate Louisiana’s goal is to change that, he said.
The commissioner said the initiative is assessing the state’s educational programs to ensure the Board’s investments are being made in areas where they’ll be the most beneficial. This includes boosting programs and opportunities for investment that will lead to economic growth for graduates and universities.
To do so, the Board is establishing metrics for tracking the economic success of the state’s university programs and graduates, Rallo said. The Board will be able to follow graduation rates, graduates’ career movements and salary growth like never before, he said.
The Board will then use this data to make strategic investments in departments that meet the needs of the state’s workforce, or encourage alterations to programs to include courses focused on high-demand skills.
For example, instead of offering students free choice of electives, the program could incorporate marketing or other skills-based courses into the curriculum. This option would allow students to pursue their desired major while also becoming more marketable post-graduation, Rallo said.
The Board is also altering the way it allocates funds to state universities.
For the first time, the Board will allocate a portion of its funding based on universities’ performance in areas such as graduation rates and time to degree completion, Rallo said. The Board is also more strictly enforcing university spending of funds coming from the tobacco fund, in an effort to guarantee the funds support the hiring and retention of faculty, he said.
Board funds will also be used to promote innovation. Rallo said it’s important for universities to provide faculty members outlets to commercialize their ideas in order to begin bringing in revenue both for the faculty members and for the universities.
Faculty Senate President Kevin Cope said he’s pleased the Board is pushing the state’s higher education systems to excel instead of simply keep up. Aspiration and funding are often intertwined, and raising residents’ expectations for the higher education system could also lead to funding increases, he said.
“The electorate, the voters, the people have come to tolerate or at least be accustomed to universities that are impaired,” Cope said. “One of the ways to cure that is by raising the aspirations of the people, and that is exactly what the Commissioner is doing. He is in fact undertaking an educational project to show the electorate that there is something better than bare survival.”
By taking a microscopic view of funding, the Board can assist universities in building leading programs while freeing the university systems to focus on the bigger picture, Cope said. This can be a more effective and fiscally responsible approach than blanketing universities with funding that won’t make as large of an impact, he said.