Audit says Louisiana community colleges could face budgetary crisis

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(The Center Square) – Some of Louisiana’s community and technical colleges may soon face budget deficits without a sharp rebound in student enrollment, according to a recent report.

A report on the fiscal year 2023 finances of the Louisiana Community and Technical College System released by the Louisiana Legislative Auditor last week suggests the loss of federal COVID aid could have a significant impact on some of the 12 schools in the system.

“The loss of Higher Education Emergency Relief funds at the end of FY 2023 may leave some System colleges with a budget deficit,” auditors wrote. “These funds were used to fund self-generated revenue losses as a result of student enrollment declines from the COVID-19 pandemic.

“If student enrollment does not rise to pre COVID-19 pandemic levels, this may leave a budget deficit.”

The report shows overall fall enrollment in the system stood at 60,180 in fiscal year 2019, before dropping to a low of 52,282 in fiscal year 2022, then rebounding some to 55,009 in fiscal year 2023. Enrollment peaked at 75,167 in fiscal year 2012, according to the report.

State appropriations had remained around $130 million to $140 million between fiscal years 2013 and 2020, before declining to $122 million in 2021 and increasing sharply to $151 million in 2022 and $184 million in 2023. The last two years included one-time funds totaling $3.6 million in 2022 and $20.6 million in 2023.

The community college system collected a total of more than $74 million in COVID-19 federal funding in 2023, while net tuition and fee revenues increased by about $4 million from 2022 to $110 million in 2023.

A breakdown of funding by college shows Delgado Community College received the largest share of federal COVID-19 funding at $36.6 million in 2023, followed by South Louisiana Community College at $18.8 million, Baton Rouge Community College at $18.4 million, Bossier Parish Community College at $15.4 million, Louisiana Delta Community College at $10.8 million, and River Parishes Community College at $10.1 million. The six other colleges in the system collected less than $10 million each in federal COVID funding last fiscal year, according to the report.

That funding is among a total of $1.3 billion in Higher Education Emergency Relief funds sent to Louisiana colleges and universities, of which $1.2 billion had been spent through September 30, according to a U.S. Department of Education dashboard.

The overall funds included about $446 million for the “student portion” and $577 million for the “institutional” portion, the data shows.

While it’s unclear exactly how Louisiana’s community college system aims to address the loss of federal COVID funds, regents submitted a budget request for fiscal year 2024-25 with $272.8 million in new funds, including $184.9 million in “competitive advantage funding” over the next two years “for talent development to meet future workforce needs.”

Erin Bendily, vice president for policy and strategy at the Pelican Institute, told The Center Square the loss of federal COVID funding is not unique to the community college system, and the institute, lawmakers and others have repeatedly called for prudent spending on one-time expenses to avoid future shortfalls.

“We’ve been pretty vocal that because they’re temporary dollars, they should be used on one-time expenses,” she said.

Bendily noted that “enrollment declines have happened before COVID,” and suggested it’s one of many issues tied into a broader trend of residents leaving the state that could be remedied by legislative reforms in the coming years.

“It’s no secret our state is losing population,” she said, pointing to census figures that show more than 80,000 have left over the last three years. “All of these things are certainly connected and underscore the need for bold transformational change to stop the loss of our population.”

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