LSU to file for bankruptcy?

[dales5050]

Not related to ND but interesting nonetheless.

LSU to file for bankruptcy?

LSU President F. King Alexander announced Wednesday that staff is drawing up paperwork for financial exigency, a move that paves the way for Louisiana’s flagship university to begin the loathsome task of laying off tenured professors, shuttering academic programs and making other painful cost-cutting moves.

According to nola.com, King made the announcement after it has become apparent this week that state lawmakers are having little luck in finding solutions to Louisiana’s $1.6 billion budget shortfall.

As LSU journalism professor, blogger and Times-Picayune columnist Robert Mann writes on his blog, Something Like the Truth:

LSU President F. King Alexander’s stunning announcement Wednesday that he’s drawing up official bankruptcy papers for the school is just one step short of naming the colleges and departments that he will close if the Legislature does not raise the funds to close the $1.6 billion budget shortfall for the coming fiscal year.

Unless Gov. Bobby Jindal and legislators come up with a budget solution very soon, you can cancel just about every ongoing faculty search at LSU and watch as the exodus of faculty accelerates.

Students, especially incoming freshmen who have offers from out-of-state colleges, will start bailing out, too, as it increasingly appears there could be no fall semester at the state’s flagship university.​

King’s stunning announcement comes as Moody’s Investors Service announced it has lowered LSU’s credit outlook from positive to stable.​

 

[Bogtrotter07]

Not related to ND but interesting nonetheless.

LSU to file for bankruptcy?

LSU President F. King Alexander announced Wednesday that staff is drawing up paperwork for financial exigency, a move that paves the way for Louisiana’s flagship university to begin the loathsome task of laying off tenured professors, shuttering academic programs and making other painful cost-cutting moves.

According to nola.com, King made the announcement after it has become apparent this week that state lawmakers are having little luck in finding solutions to Louisiana’s $1.6 billion budget shortfall.

As LSU journalism professor, blogger and Times-Picayune columnist Robert Mann writes on his blog, Something Like the Truth:

LSU President F. King Alexander’s stunning announcement Wednesday that he’s drawing up official bankruptcy papers for the school is just one step short of naming the colleges and departments that he will close if the Legislature does not raise the funds to close the $1.6 billion budget shortfall for the coming fiscal year.

Unless Gov. Bobby Jindal and legislators come up with a budget solution very soon, you can cancel just about every ongoing faculty search at LSU and watch as the exodus of faculty accelerates.

Students, especially incoming freshmen who have offers from out-of-state colleges, will start bailing out, too, as it increasingly appears there could be no fall semester at the state’s flagship university.​

King’s stunning announcement comes as Moody’s Investors Service announced it has lowered LSU’s credit outlook from positive to stable.​

Quite stunning! I wonder if Les Miles still gets his guarantee?

Seriously, is this trend powerful enough to clean up the cesspool college athletics has become?

 

[IrishLax]

Serious question, does their athletic department run at a profit? And how many sports do you think will get cut unless they're endowed? Years ago Cal did something similar.

 

[dales5050]

From 2013 but just a few years ago they were still increasing their athletic budget.

LSU’s athletic budget to rise — along with some ticket costs

I wonder how long before the voices that be look to slash the money for the Football Program? Not that I agree with this idea. It appears that Football is one area where they actually make money but no doubt that Les Miles making $4.3M a year is not going to sit well with many.

 

[Irish YJ]

Wonder if they will cut their bag man budget?

 

[dales5050]

Serious question, does their athletic department run at a profit? And how many sports do you think will get cut unless they're endowed? Years ago Cal did something similar.

Therein lies the rub.

The football program runs a profit for sure. Source

Louisiana State University
Total Revenue: $74,275,838
Total Expenses: $25,822,306
Net Revenue: $48,453,532


But it looks like Title IX is responsible for having 3/4 of the athletic budget go to programs outside of football.

How this plays out will be interesting for sure. If LSU is forced, in one way or another, to cut what they spend on Football it's highly probable that the revenue will drop. Not only does this cause a backwards cycle for the football program but for the athletics program in general.

 

[dales5050]

Wonder if they will cut their bag man budget?

A few million per year is a drop in the bucket.

 

[IrishLax]

Therein lies the rub.

The football program runs a profit for sure. Source

Louisiana State University
Total Revenue: $74,275,838
Total Expenses: $25,822,306
Net Revenue: $48,453,532


But it looks like Title IX is responsible for having 3/4 of the athletic budget go to programs outside of football.

How this plays out will be interesting for sure. If LSU is forced, in one way or another, to cut what they spend on Football it's highly probable that the revenue will drop. Not only does this cause a backwards cycle for the football program but for the athletics program in general.

Similar stuff happened at Cal and Maryland recently. Cal, because of the financial crisis in California at the time. Maryland just with their budget being so out-of-whack that it wasn't sustainable. Cal basically said "we're cutting these teams unless $X is raised to endow them" and then went about getting donations. If people cared, then they donated, and the team was saved... if they didn't, bye-bye. But as I understand it the football budget was never touched.

Maryland simply cut like a half dozen sports and then moved to the Big Ten for more $$. They also refused to pay what was owed to the ACC for leaving.

Athletic departments are usually rightfully the first on the chopping block over academic programs. It's easy to slash a team and save millions, whereas slashing professors/programs can look really bad for an academic institution.

 

[GoIrish41]

Bobby Jindal for president!!! LOL

 

[IrishJayhawk]

Bobby Jindal for president!!! LOL

Yeesh. Scary stuff.

 

[Irish YJ]

Bobby Jindal for president!!! LOL

Yeesh. Scary stuff.

Not a Jindal or political expert, and not of fan of Jindal, but hasn't the states credit rating improved while he's been at the helm?

 

[greyhammer90]

Serious question, does their athletic department run at a profit? And how many sports do you think will get cut unless they're endowed? Years ago Cal did something similar.

Not sure if LSU is like Tennessee, but Tennessee's athletic finances are wholly seperate and distinct from the university proper.

 

[dales5050]

Similar stuff happened at Cal and Maryland recently. Cal, because of the financial crisis in California at the time. Maryland just with their budget being so out-of-whack that it wasn't sustainable. Cal basically said "we're cutting these teams unless $X is raised to endow them" and then went about getting donations. If people cared, then they donated, and the team was saved... if they didn't, bye-bye. But as I understand it the football budget was never touched.

Maryland simply cut like a half dozen sports and then moved to the Big Ten for more $$. They also refused to pay what was owed to the ACC for leaving.

Athletic departments are usually rightfully the first on the chopping block over academic programs. It's easy to slash a team and save millions, whereas slashing professors/programs can look really bad for an academic institution.

Thanks for the information. I did some additional reading and found that Cal was not allowed to cut Football, Basketball or Volleyball. If they did, they would have been dropped from the Pac10. I wonder if the SEC has similar terms and, if so, which sports.

Also interesting to read that it's not just as simple as donating to save X team. The donations would have had to cover most, if not all, of the teams, because of Title IX considerations.

 

[Old Man Mike]

This has nothing to do with football. It's a simple political power play to get a do-nothing State Legislature to move their asse{t}s on creating a budget. Government institutions [a la LSU] cannot function until they do. Thus the bankruptcy ploy.

 

[Rizzophil]

Big Teacher/Education pensions are crushing the university. Teachers get their annual income after they retire. Sooner or later you have to find the money to keep paying people NOT to work for you. It's unsustainable

 

[GoldenToTheGrave]

Big Teacher pensions are crushing the university. Teachers get their annual income after they retire. Sooner or later you have to find the money to keep paying people NOT to work for you. It's unsustainable

You're right, that's a great cover for an artificial crisis to enact a "starve the beast" budget. Not to mention in a state that ranks 49th out of 50 states in education.

 

[dales5050]

Big Teacher pensions are crushing the university. Teachers get their annual income after they retire. Sooner or later you have to find the money to keep paying people NOT to work for you. It's unsustainable

Go figure. When fringe benefit costs go from 22% to 39% in a 5 year span...it must be something else...like that bad Gov. that is causing the issues at LSU. :/

 

[pkt77242]

Ok, here is a more reputable source.
LSU could lose 300 faculty positions under proposed state funding cuts, says King Alexander | NOLA.com

The state is facing a projected $1.6 billion budget shortfall next year, and higher education institutions have been told to prepare for $300 million to $400 million in reduced funding in the coming academic year.

 

[phgreek]

Not enough information to determine if LSU has internal issues it is refusing to deal with.

They seem to be fairly effective with what they spend per student. I don't think that should ever be lost in the discussion. It seems the core function is being performed fairly well. What else is going on...???

 

[Old Man Mike]

I have no information as to how the Louisiana system works, but in Michigan I get paid NOTHING by the university since retiring. Everything has been taken care of by required payments to TIAA-CREF during my employment. The only added benefit that I still get from WMU is the opportunity to still participate in their health care plan --- which I pay fees for.

So, the flavor of the above comments about us terrible rip-off teachers is out-of-line for my experience in Michigan's system. I earned my salary and my retirement.

 

[pkt77242]

Not enough information to determine if LSU has internal issues it is refusing to deal with.

They seem to be fairly effective with what they spend per student. I don't think that should ever be lost in the discussion. It seems the core function is being performed fairly well. What else is going on...???

The state of Louisiana is looking to cut an extreme amount of money in higher education funding.

 

[Ndaccountant]

The state of Louisiana is looking to cut an extreme amount of money in higher education funding.

PAR says Louisiana’s budget crisis ‘even worse than many thought’ - Baton Rouge Business Report

The summaries attached to this article explain what is going on.

 

[IrishLax]

Thanks for the information. I did some additional reading and found that Cal was not allowed to cut Football, Basketball or Volleyball. If they did, they would have been dropped from the Pac10. I wonder if the SEC has similar terms and, if so, which sports.

Also interesting to read that it's not just as simple as donating to save X team. The donations would have had to cover most, if not all, of the teams, because of Title IX considerations.

Yes, this was the trickiest part. They found it easy to raise money for some men's teams, but for every men's team they wanted to save they needed to also save a women's team. Because of the way equivalency sports work, for every women's team cut they had to cut a men's team... it was an utter mess.

BTW, Title IX is just the absolute worst. It's not just unnecessary, it's downright unfair and unjust.

 

[pkt77242]

PAR says Louisiana’s budget crisis ‘even worse than many thought’ - Baton Rouge Business Report

The summaries attached to this article explain what is going on.

Louisiana has a massive budget crisis but doesn't that go back to the idea that reducing taxes rarely increases state revenue (though some conservatives like to argue differently) and is the main reason (though not only reason) they are in this predicament? At what point do we kill off the idea that cutting taxes is the answer?

 

[GoldenToTheGrave]

Louisiana has a massive budget crisis but doesn't that go back to the idea that reducing taxes rarely increases state revenue (though some conservatives like to argue differently) and is the main reason (though not only reason) they are in this predicament? At what point do we kill off the idea that cutting taxes is the answer?

Sometime after the state's already abysmal education system fails an entire generation of students.

 

[phgreek]

The state of Louisiana is looking to cut an extreme amount of money in higher education funding.

THANKS...I kinda got that.

Clearly someone believes there is waste somewhere in the system...some allusions were made to retirement...but as mentioned above, retirement payments are usually a function of ACTIVE current performers and executed on an individual basis...not a pool made from current workers for current retirees...ie, this isn't Social security. ...so how'd retirement get out of whack? What made it all work BEFORE...but not NOW?

Let me help...its all BJ's fault, he is a scum bag. K...got it. any other insights?

 

[NDgradstudent]

You're right, that's a great cover for an artificial crisis to enact a "starve the beast" budget. Not to mention in a state that ranks 49th out of 50 states in education.

A larger education budget cannot turn Louisianans into Iowans.

 

[pkt77242]

THANKS...I kinda got that.

Clearly someone believes there is waste somewhere in the system...some allusions were made to retirement...but as mentioned above, retirement payments are usually a function of ACTIVE current performers and executed on an individual basis...not a pool made from current workers for current retirees...ie, this isn't Social security. ...so how'd retirement get out of whack? What made it all work BEFORE...but not NOW?

Let me help...its all BJ's fault, he is a scum bag. K...got it. any other insights?

Not sure what you are driving at. Louisiana lowered taxes which have led to budget short falls which is leading to them having to cut funding to higher education (and it will be a very large amount). It is pretty much that simple.

 

[Redbar]

They are also proposing that a students tuition be based on the cost of their particular college. So for example a philosophy majors tuition might be considerably less than say an architecture or medical students.

 

[pumpdog20]

Yes, this was the trickiest part. They found it easy to raise money for some men's teams, but for every men's team they wanted to save they needed to also save a women's team. Because of the way equivalency sports work, for every women's team cut they had to cut a men's team... it was an utter mess.

BTW, Title IX is just the absolute worst. It's not just unnecessary, it's downright unfair and unjust.

From a college wrestling fan, I couldn't agree with you more.