LSU exploring bankruptcy options, not there yet
BATON ROUGE - An LSU spokesperson said Friday that LSU has taken several steps to prepare for the possible budget fallout from the legislative session, but they've not actually taken the step of filing for academic bankruptcy yet.
LSU released a statement from LSU Board Chair Ann Duplessis to clear the air after news of the university's budget woes went national, with some reporting LSU had actually filed for financial exigency.
"Contrary to inaccurate media reports, LSU has not begun the process of filing for financial exigency, but we do continue to explore a wide range of contingency plans in light of the state's $1.6 billion shortfall," Duplessis said.
The university did put off issuing $114.5 million worth of bonds due to the precarious budget situation. According to Treasurer John Kennedy, a majority of investors chose to pull out of the deal because of the financial worries.
Moody's Investor Services downgraded the university's credit outlook from positive to stable because of their concerns over LSU's ability to control their own funding going forward. The university asked lawmakers to pass legislation which would give them more freedom to raise their tuition, and several such bills passed through both House and Senate education committees earlier this week.
In the worst case scenario, higher education could see their per-student funding from the state drop by around 80 percent. Filing for financial exigency would give LSU more flexibility to cut staff and academic programs, but President F. King Alexander said doing so would ruin the university's future chances of recruiting any faculty.
Alexander drew some criticism for announcing they were planning for possible bankruptcy, with critics claiming there are still many other options on the table and saying the university president was using "scare tactics."
Duplessis said Friday that they were doing everything they could to prevent that situation from happening, but they still had to look at exigency as a possibility.
"We remain hopeful that the Legislature will develop solutions to protect funding for LSU and higher education in Louisiana, but we owe it to our students, faculty and staff to prepare for every possible outcome, as any responsible fiscal manager would do," she said.
LSU students and faculty announced plans this week to march to the Capitol on April 30. Students from several other universities held a demonstration against proposed higher education cuts earlier this month.
Desktop NewsClick to open Continuous News in a sidebar that updates in real-time.
New $22M manufacturing plant coming to Ascension Parish
Denham Springs homeowners apply for federal flood relief
Local non-profit organization hands out toys, food to those in need
Military veteran, 83, to receive Ph.D. from LSU
Flood-damaged roadways in Denham Springs finally getting repaired