Last Thursday, in addressing the state about a looming $950 million dollar budget shortage for the remaining budget year and a eye-boggling $2.2 billion shortfall for next fiscal year, Governor Jon Bel Edwards mentioned that if there are no new revenues, college football might have to shut down.
To many, this statement might have been the only sentence heard. The Internet, TV, social media went bonkers. Immediately, the Louisiana and the American sports world caught on fire.
The political sphere and some in the media started to call Edwards an extortionist. How dare he utter the prospects that LSU football season could be jeopardized? For whom does he work for, anyway, Nick Saban?
Well, slow down. Hold your horses. As I mentioned earlier this week, what Governor Edwards said was not simply his sense of reality but the real concerns and words of the Board of Regents.
Today, I interviewed via Internet-video, Commissioner Joseph Rallo of the Louisiana Board of Regents, which oversees the various university and higher education systems. I wanted to know, just how bad the budget crises for higher education might be? Just where did Governor Edwards obtain the information that put the spooks in the best of Cajunland which worships the Tigers as a religion? Why would the universities be at risk? How much of a cut can we expect this year? Next year? When can we expecct Louisiana D-Day?
Below is part I of the video interview I conducted with Rallo and the transcription. Part 2 of the interview will be posted tomorrow.
SABLUDOWSKY: Hi, everybody this is Stephen Sabludowsky, Publisher of Bayoubuzz.com, and today we have Commissioner Rallo from the Louisiana Board of Regents. Good afternoon Commissioner..
COMISSIONER RALLO Good afterrnoon
SABLUDOWSKY:Thank you for joining us this afternoon. Obviously were in the middle of a very very rough controversial special session. Why don't you tell us, from your standpoint where are we right now in terms of our being four days in--from a higher education standpoint, how are we doing?
COMISSIONER RALLO: Literally there are two issues at stake. One is the budget between now and at the end of the fiscal year in June and then the budget projections for next year so let me address each one of those separately. From now until the end of June, higher education will have a minimum $70 million budget cut and it could go up to all layout to $232 million. So, even the base case scenario where all of the governor's budget request, revenue requests passed--we'd still have to take a $70 million hit in the last three months of the session so there will be adverse impacts on campuses that will vary--depending upon the nature of the institution including not being able to make payroll. The closer that you get to the 242 or the worst-case scenario then the ripple effects intensify. Now,next year we've been told to expect a 27% budget reduction overall as well as funding the TOPS at 80% less than we have now. So both of those events taken together paint a pretty direr picture for higher education.
SABLUDOWSKY:Okay, as far as the 27%, were talking about starting July 1 to June 30 next year, so what does that 27% actually represent in terms of dollars.
COMISSIONER RALLO:Well five years ago, six years ago, the budget the Board of Regents allocated was $1.5 billion. Over the past five years that has been cut, so this year, before the projected cut we had $750 million. So, you're looking at 27% of 750 million it's about 180 million-$190 million less.
So that's roughly $190 million then and 70 million-- so we're talking about possibly $260 million? Well we don't know how the 70 million is going to be calculated, whether they're going to be starting next year's budget with what were starting this year 750, or 750 less the 70, that we don't know at this point in time--but in any event, it's going to be 180 million-190 million less next year, as well as a 80% reduction in TOPS funding.
SABLUDOWSKY: pretty serious, so obviously last week, Gov. Edwards gave his speech, to the state and he, scared a lot of people, there's a lot that has been said on social media and elsewhere, basically saying, their saying that he threatened to shut down LSU football and the LSU Tigers--even though he didn't mention the LSU by name or Tigers, by name, in terms of football--at what point in time, in terms of the actual dollars would we have to be below or lose, in order to be in the situation where something like that would happen?
COMISSIONER RALLO:Well I actually met with him a few before, a little while before, he presented his speech, so what he was referring to was a letter that I sent on behalf of of all of the system presidents. Let me just walk you through it. What we said again--$70 million is the least, that's the best case scenario all the way up to 232, so that's number one. The second thing is, that when special session and March 8, unless the campus presidents have some idea, as to whether budget cuts is, they're gonna have to start shutting things down. Again, it may be classes, it may be summer school, whatever. So what he was referring to was in the worst case or even close to the worst case, students would have classes canceled and they would receive in-completes and there would be no summer school So athletes, who normally go to summer school because of the heavy workload during the year, would not be able to do that, they'd have incompletes and under the NCAA Division I rules, you have to have a grade if you want to be eligible for fall sports. That is what he was referring to.
SABLUDOWSKY:So, he got the information from the Board of Regents, am I correct? He got the information from you--is that what happened
COMISSIONER RALLO: we meet on a regular basis with the four system presidents and the four board chairs of the management board, as well as our board chai--as a result of our conversation, I think it was probably Wednesday, before the Thursday-- that was the letter I wrote on behalf of everyone to the governor responding to, what we were asked to respond to.
SABLUDOWSKY: Sure, and I received that letter on Friday and I think a lot of people receive it on Friday. And so that's a real dire situation, but there's no real dollar figure in terms of where we would have to be in order for us to begin that process--where some of the students would not be able to, say, get a letter grade, and therefore dissipate in sports? Are we talking about say 100 million, 150 million? Is there any way of calculating that--I know that you said that's is worst-case scenario.
COMISSIONER RALLO:Well, I mean, again, the worst-case scenario is 242, but the best case scenario is 70. So somewhere between 70 and 242 is where we're going to land. The issue really is--we have three months left before that bill is due and so if we don't have clarity by the end of the special session, March 8, then the presidents and chancellors would have to assume, if not a worst worse case, close to a worst-case scenario, because the only place that you have money at this late date is in salaries. 80 to 85% of costs to universities, particularly this late in the year or salaries. The other thing is, that the state normally allocates 40 million dollars a year. It's sort of like your paycheck, 42 million. Well they're not going to pay that one out in May. So it's as if you had your own personal bank account and you expect to get your paycheck at the end of the month and you don't get it. You still have to pay things and there's simply not enough money, cash flow, at that point in time, to make payroll in any of the campuses