BATON ROUGE, La.?Since last spring, Louisiana state government has pondered the problem every lottery ticket buyer wishes he or she faced?take the payments over time or go for the lump sum?
Within a few weeks, Louisiana may circle the choice that says, ?Mail me the big check.?
The state is preparing to sell 60 percent of its share of a 1998 national settlement with the country’s largest cigarette companies in a bond issue projected at nearly $1.1 billion dollars. If the sale goes through, higher education may get a cut.
?We?re about there,? said Attorney General Richard Ieyoub. ?I anticipate [the sale will occur] probably about early November.?
Louisiana, along with 45 other states, won $206 billion in a 1996 lawsuit to recover smoking-related health care costs. The state’s share, to be paid through 25 years, is around $4.4 billion.
But state government, like some others involved in the settlement, doubts the cigarette makers? ability to pay through the long term; hence the plan to sell 60 percent of the state?s share.
?We?re hedging against the possibility of future losses,? Ieyoub said. The bond sale will net Louisiana about 55 cents now for each dollar it would eventually receive.
And university administrators say they have plans to bring some of that money to Louisiana State University?but it will require some campaigning at the State Capitol.
?Our hope is the state will recognize the priority of higher education and fund it appropriately,? said Chancellor Mark Emmert.
According to constitutional amendments passed in 1999, most of the bond money must go into trust funds the Legislature cannot spend. Only interest earned is available, and it must be used in specific areas, such as health care and elementary education.
?The old adage about a kid in a candy store? That?s way understated in this state,? said Ron Henson, assistant to State Treasurer John Kennedy.
But a State Bond Commission report indicates more than $310 million will go to a trust fund for the Tuition Opportunity Program for Students, which the state currently funds each year from its general budget.
?By relieving some of the stresses in other areas, [the sale will] increase funding available for the general operating budget,? Emmert said.
Those general funds might be used to increase the university?s own operating budget, he said.
Another $310 million is slated for the Health Excellence Fund, a trust for medical research and health care.
Interest from this fund could pay for activities of the LSU System health-care units like the Health Sciences Center (which includes the LSU medical schools) and for other medical-research programs.
Emmert said newly won funding from the Legislature could supplement the projected growth of university TOPS funding. The state Board of Regents? Master Plan, which grants funding commensurate with growth, led Emmert to announce greater enrollment goals, possibly up to 35,000 students, a reversal of previous policy.
More students mean more tuition revenue from TOPS and other sources?but no more money per student. Unless, that is, a larger LSU can win higher priority for funding from the state, said Higher Education Commissioner E. Joseph Savoie.
?We will certainly make the case [money from other areas] should go to higher education,? he said. ?[The bond sale] is not a windfall in operating budgets, but it has some peripheral effects that could be positive for us.?
Economics professor James Richardson said money from the bond sale could help the university, but the new enrollment policy would mean lobbying the Legislature for more funding anyway.
?We are going to go after more students with or without the tobacco bonds being sold,? he said. ?If we?re going to [increase enrollment] the state?s going to have to come up with the money. It becomes the job of the chancellor, the [LSU System] president and the commissioner to make that case before the Legislature.?
Without finding increased resources outside of tuition, the university would not benefit but suffer because of increased enrollment, he said.
?You don?t gain anything in that case,? Richardson said. ?There will be some dilution of educational quality.?