The University and the state face difficult times ahead because of a $1.93 billion budget shortfall and a complicated economic climate which makes financial revision difficult, a panel of budgetary experts said on Monday.The roundtable discussion, sponsored by the Faculty Senate and the Office of Academic Affairs, focused on both revenue and the budget.One must first examine the state’s revenue to understand budget cuts, said Jim Richardson, director of the Public Administration Institute at the E.J. Ourso College of Business.Fluctuations in oil prices and the economy are partially responsible for budget shortfalls, Richardson said, as well as personal income tax.Funds coming to the state after Hurricane Katrina and rising oil prices caused the state to lower taxes, said Bob Keaton, supervisor of internal audit for the LSU System, because “it seemed the state was rich.”Though shortfalls are now a problem, raising taxes to increase revenue is not an option in the next legislative session because of Louisiana law restrictions concerning when tax-raising bills can be introduced.Only $3.3 billion in “discretionary funds” would realistically be available to cover a $1.93 billion shortfall, but restrictions on certain parts of the budget and previous allocations make reallocating those funds toward the shortfall difficult, he said.Approximately equal portions of the discretionary budget are allocated to health care and higher education, but because of the federal match program, every $4 cut in health care means the state legislature has to make $10 in program cuts.”The politics of budget cuts favor keeping more money in health care,” Keaton said.Because of various state laws, Keaton said potential solutions to the University’s budget woes like the “rainy day fund” and moving funds that have been previously allocated are unrealistic.”[Cutting spending] will be the primary means by which we address the budget,” Keaton said. Robert Kuhn, associate vice chancellor of budget and planning, discussed the potential $1,000 per year flagship fee, which he said could generate approximately $26 million.Kuhn said the new fee would require a two-thirds vote in the legislature and would not be covered by TOPS, which he said is used by about half of University students.Richardson said convincing the legislature of that may be difficult.”The legislature sees that as a tax almost, and they are reluctant to vote on that,” he said. Chancellor Michael Martin said he thinks legislative support is there.”I’ve had conversations with several leaders in the legislature who will say to my face, ‘If the state can’t preserve the essence of the flagship through appropriations, we’ve got to give you latitude on tuition and fees to save yourself,” Martin said.Martin said he recognizes criticism saying the fee could cause a drop in enrollment, but the question would be whether the drop would be large enough to offset what could be gained from the fee.Cutting certain academic programs was another cost-cutting tactic mentioned. Matthew Hilliard, social work graduate student, said he is concerned about programs like social work.”We give 900 hours of public service as part of [the social work] degree program,” he said. “We are smaller so it might look easier to cut us, but we make a large contribution to the state.”Astrid Merget, executive vice chancellor and provost, said cuts will be performance-based and “from the periphery,” or not affecting the academic core.”We don’t want to cut programs based on size or grants or unilateral dimensions like that,” Merget said.- – – -Contact Ryan Buxton at [email protected]