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Story Archives: Higher education has a responsibility, too


Higher education has a responsibility, too
by Sam Hanna, Jr. - posted Tuesday, May 19th, 2009 @ 4:58 pmE-mail Story E-mail Story | Print Story Print Story 
Though the House of Representatives turned a deaf ear to suggestions that it postpone state income tax cuts the people are expected to enjoy beginning after July 1, you can rest assured another effort will surface to do the same when the Senate entertains the state's operating budget for the 2009-2010 fiscal year.

As you will recall, last year the Legislature approved a measure by Sen. Buddy Shaw to roll back income tax hikes the people approved earlier in the decade through a constitutional amendment, which the Legislature passed along to the voters for consideration. The income tax hike was and remains commonly known as the Stelly Tax, for it was named after then-Rep. Vic Stelly, who authored the legislation to raise income taxes in Louisiana.

Stelly evolved into a serious revenue generator for state government. That's understandable since Stelly raised income taxes for middle and upper-middle class wage earners. Today, courtesy of the Stelly Tax, Louisiana holds the dubious honor of being one of the highest taxed states in the Union in the personal income tax arena.

In the past few years—2004, 2005, 2006 and 2007—severance taxes generated by the oil and gas industry climbed at a record clip thanks to robust activity in the oil patch, which was brought about by a spike in the price of oil. State government became flush with cash overnight, especially following hurricanes Katrina and Rita when the federal government dumped money by the truck load into Louisiana to aid the state's recovery efforts. The gift from the feds helped fuel a spike in sales tax collections, too.

Add it all up and what we witnessed was a state treasury filled to the brim with cash while a more-than-eager state Legislature waited in the wings to spend it, which it did like a hoard of drunken sailors.

Now, here we are, smack dab in the midst of a global recession. Tax collections are down, and there "ain't" enough money in the treasury to pay for all of the goodies the people expect government to finance. That would include the state's colleges and universities, which are being asked to absorb some $200 million in budget cuts to help the Legislature cope with a $1.3-billion revenue shortfall for the 2009-2010 fiscal year, which begins July 1.

Remember, state revenue officials tell us the roll back in income tax rates will cost the state treasury some $300 million-$400 million. Obviously, that's more than enough money to offset proposed cuts in state appropriations for higher education.

Thus, according to the higher education community, the Legislature should freeze any income tax cuts the people are in line to receive after July 1.

Piloting the anti-tax cut movement in the bowels of the capitol these days is the higher education community itself, which has been feverishly persistent with its claims that budget cuts the Legislature is entertaining for the state's colleges and universities would mark the end of the world as we know it. The $200 million in proposed cuts for higher ed are significant, but they're not as devastating as some higher ed officials would have us believe. Mark my word.

It's not being suggested that the state spends too much money on higher education. An argument could easily be made that Louisiana woefully under-funds higher ed. After all, not one state-funded university in Louisiana is ranked as one of the best in the nation. Sadly, how much money a state spends on a university tends to determine whether it's considered one of the elite of the elite.

However, in tough economic times such as the ones we're witnessing today the higher education community should expect to bear some of the responsibility to help the Legislature pass a balanced budget for the new fiscal year. The responsibility is two-fold—either absorb the cuts state lawmakers approve or help lawmakers identify other areas of the budget to cut to offset proposed cuts for higher ed. It's that simple.

Whining and griping at every turn, clamoring for the Legislature to renege on income tax cuts it approved for the people, is disingenuous at best. Worse, it's a slap in the face to the people who pay the freight, so to speak, in Louisiana—middle and upper-middle class wage earners and the business community, too.

Sam Hanna, Jr. is publisher of The Ouachita Citizen, and he serves in an editorial/management capacity with The Concordia Sentinel and The Franklin Sun, three newspapers owned and operated by the Hanna family. Hanna can be reached by calling (318) 805-8158 or by emailing him at samhannajr@samhannajr.com.
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