Budget battle gets worse
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Business leaders urged lawmakers Saturday to avoid making deep cuts to the state’s public colleges and universities.
The Shaw Group President and CEO Jim Bernhard said Louisiana lacks the knowledge base necessary to attract many companies to the state.
“If you invest in our children, you’ll be proud 20 years from now,” Bernhard told the Senate Finance Committee.
Sean Reilly, chief operating officer and president of the outdoor division of Lamar Advertising, asked legislators to protect higher education from “truly draconian cuts” to the greatest extent possible.
He said there is only one shot to get it right.
Gov. Bobby Jindal proposed cutting $219 million from public colleges and universities in the budget year that starts July 1. The state, like the rest of the nation, is suffering an economic downturn.
The Shaw Group recently said it will forgo $172.5 million in state incentives for a Lake Charles nuclear manufacturing plant and headquarter retention.
The Baton Rouge-based corporation wired $13.5 million back to the state and scrapped plans to receive $28.5 million from a state economic development “megafund.” Other incentives included forgivable loans.
The Shaw Group is one of only two Fortune 500 companies in Louisiana in 2009.
Bernhard, a former chairman of the state’s Democratic Party as well as Shaw’s chief executive officer, urged the state to use the money for higher education.
Bernhard also is considered a possible contender to challenge U.S. Sen. David Vitter, R-La.
Vitter is seeking re-election next year.
Bernhard declined Saturday to delve into his political ambitions.
“I’m not going to go down that path. I really haven’t ruled it out, ruled it in, ruled it anything,” he said.
Bernhard said he came to the State Capitol Saturday to talk about higher education and the “unacceptable” cuts that Jindal is proposing.
Bernhard told the committee that he established an engineering base in Charlotte, N.C., three years ago because it is difficult to attract employees of a high caliber to Louisiana.
Committee members questioned whether it was state incentives that lured him to North Carolina.
He said incentives did not play a role in the decision. Instead, he said, it was the personnel base that was attractive.
Bernhard, an LSU graduate, said former Govs. Mike Foster and Kathleen Blanco made strides in improving the state’s education system.
He said long-term investment in higher education creates many more jobs than economic development incentives do.
Bernhard said money can be found to fund higher education if the Jindal administration can spend $50 million to save a Farmerville chicken processing plant.
In a statement, the governor defended the state’s incentives on the chicken plant.
“The Foster Farms deal will save thousands of jobs and over $100 million in state and local tax revenues that will allow us to continue to invest in education,” Jindal said by e-mail.
The governor said he will work with the Legislature to minimize the cuts to higher education. He offered no specifics on how he plans to lessen the cuts.
Later that day, Bernhard shared the stage with Jindal at Louisiana Tech University’s commencement ceremonies. Bernhard, the son-in-law of Tech’s president, was there to receive a higher education hero award for giving up the state incentives.
Lawmakers have tried to find ways to minimize the proposed cuts to higher education in next year’s $27.9 billion state operating budget.
A Senate committee advanced legislation that would delay a state income tax break, generating $118 million.
The legislation, Senate Bill 335, would freeze at current levels the amount of federal excess itemized deductions that filers can claim on their state income tax returns.
In the House, lawmakers steered about $90 million to higher education, largely by using the proceeds of a proposed tax amnesty program and tuition increases.
Jindal vowed to veto the tax relief legislation. There are questions about whether the amnesty money can be used for higher education’s operating expenses.
The Senate Finance Committee is hearing testimony on House Bill 1, the budget legislation.
Much of Saturday’s legislative action was devoted to higher education.
University officials warned lawmakers that the proposed cuts will lead to layoffs, furloughs and program eliminations.
University of Louisiana at Lafayette President Joseph Savoie acknowledged that the state is facing challenges. He said the state also needs to set priorities.
Marsha Shuler of the Capitol news bureau contributed to this report.
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