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LSU Says No Exigency Yet


News that Louisiana State University (LSU) would file for financial exigency has caused a stir with many residents. It also caused a stir with LSU who says that the reports are not accurate. A pair of statements from the school this morning (4.24) clarifies that LSU has not begun the “process of filing for financial exigency,” but is continuing to “explore a wide range of contingency plans.”

 

University spokesperson Kristine Calongne stresses that the state’s $1.6 billion budget shortfall puts the University is in a position of jeopardy. The school also decided not to move forward with applied resistance of Series 2015 Auxiliary Revenue and Refunding Bonds in the amount of $114.5 million of Series 2015 Auxiliary Revenue and Refunding Bonds.

 

LSU Board of Supervisors Chair Ann Duplessis issued a second statement to media reiterating that no decision to file for exigency has been made, but all options are on the table.

 

Exigency is a tool used by academic institutions similar to bankruptcy. For a set period of time, normally a year, the University sets about restructuring equipped with sweeping powers. For example, tenure agreements can be broken. The process is often devastating and historically makes recruitment of students difficult and recruitment of professors nearly impossible.

 

Read the full statements below:

 

University spokesperson Kristine Calongne

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. In light of recent events, LSU has decided to postpone the issuance of Series 2015 Auxiliary Revenue and Refunding Bonds in the amount of $114.5 million. Under the current circumstances and due to the continued unpredictably of our state budget, we believe this is the responsible thing to do, and we will reevaluate the offering once the state's financial picture becomes clearer.

 

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.

 

LSU Board of Supervisors Chair Ann Duplessis

President Alexander has not formally requested, nor has the LSU Board of Supervisors voted, to declare financial exigency. However, we are working together on a wide range of contingency plans in preparation for the final outcome of the budget process. While it is unfortunate, given that the 2015 Legislative Session ends only 3 weeks before the start of the new fiscal year, we are simply being prudent by exploring the process and the timeline required for exigency as part of our contingency planning efforts. Not only are our students academically at risk, thousands of LSU business partners  and the dozens of local communities reliant upon the LSU enterprise will be economically adversely impacted by cuts of the magnitude being contemplated.

 

We remain optimistic that the legislature’s concern for higher education will result in solutions that will protect LSU. We will continue to aggressively advocate with the students, alumni, and Dr. Alexander for full restoration of our funding. We owe it to our academic customers, local communities and business partners to be fully prepared for every possible outcome.




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