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"Excellence Fee" Idea Not Measuring Up

At first, it seemed as though everyone was breathing a sigh of relief, as the 2016 executive budget proposal unveiled last week did not slash higher education as deeply as expected.

“The true reduction to higher education is $211.3 million,” Commissioner of Administration Kristy Nichols told the Joint Budget Committee last Friday.

But Nichols went on to admit that number is built on “ifs” and “maybes” that include capping the business inventory tax credit, as well as asking college students to pay what the administration is calling an “excellence fee”.

“Let’s just say, as an arbitrary number, that fee was $2000,” Nichols explained. “The family would be credited back the cost of that fee on their taxes. The cost associated with paying that tax credit back to the family or student could be offset by raising the cigarette tax.”

Yet Monroe Rep. Katrina Jackson wondered why students should have to carry the load of such a roundabout scheme.

“Why are we not just up-front funding the universities with the money that we would use for that tax credit, instead of making students and parents pay more money up front?” Jackson asked Nichols. “And then we’re saying we’ll give it to you when you file your taxes?”

Nichols said that’s not how the governor wants it handled.

“Our guardrails are very clear,” Nichols stated. “We won’t raise taxes without an offset on a tax credit.”

In other words, it has to appear to be revenue neutral.

But Louisiana also needs the cash flow. By having students pay the fees when they get bill for each semester, the state has use of the money from higher cigarette taxes from August till the following April—or from January of one year till April of the next—before having to part with refunds of the fees once income tax returns are filed.

Louisiana’s new Higher Education Commissioner Joseph Rallo, who addressed the Baton Rouge Press Club Monday, says that’s not the way the heads of the state’s higher education systems want the fees handled.

“We don’t want any out-of-pocket fee to that student,” Rallo maintained.

No bills have yet been filed to authorize an “excellence fee” or a tax credit to refund it, or to increase cigarette taxes.