Thread: college costs

After subsidizing loans for years, our massive federal government has successfully increased college tuition costs to obscene levels and created yet another bubble that is bound to burst. The government has loaned to individuals who will more than likely never be able to pay back their student loans.

What will result from this?

Enter billionaire entrepreneur Mark Cuban:

College tuitions have exploded because of easy money guaranteed by Sallie Mae. So, if any student can borrow more and more money, and it’s guaranteed by the federal government, why wouldn’t the colleges take it all?

The problem is that bubble has led to over a trillion dollars in student loan debt, which is having a significant impact on the economy and it’s really holding us back in the economy’s ability to grow. It’s holding back housing, it’s holding back apartment building, it’s holding back car sales, it’s holding back clothing sales… anything that’s not an absolute necessity, kids can’t spend their money on.

That’s a real problem for the economy and I think that bubble is going to burst. I think it’s inevitable at some point there’ll be a cap on student loan guarantees and when that happens you’re going to see a repeat of what we saw in the housing market when easy credit for buying or flipping a house disappeared. We saw a collapse in the price of housing and we’re going to see the same collapse in the price of student tuition and that’s going to lead to colleges going out of business.

College education is big business, and with easy Federal loans, prices for everything from tuition to text books is going through the roof. Once degreed, the majority of college grads are ill-equipped to handle the current marketplace. Many of those who entered college just five years ago simply can’t find work in a 21st century economy that’s imploding on all sides. What college grads are left with are massive loans that can’t be repaid and a room in mom and dad’s basement.

At one time, college was an investment. Today, it’s become indentured servitude.

For parents and teens looking at colleges, we suggest taking a close look at the amount of money that will need to be spent and borrowed, compared to the benefits that will come out of the degree pursued. Thirty years ago, a bachelor of business would have been a desired degree to hold. In an economy with over 20% unemployed, one must ask: how many business administration and management jobs will there be four or five years from now, especially if we continue to lose production capacity to cheap foreign labor.

The government gladly invests taxpayer dollars into student grants and loans. This is what has been driving the increase in college tuition bringing it above and beyond the average student and family.

For teenagers the propaganda is so potent that high school students in many cases have blind optimism that they will land their dream career after college and have the income to easily pay off any loan balances occurred along the way.

Some graduates are left with over 100,000 in debt and can barely find any job, let alone the one they pictured themselves getting into four years ago.

LISTEN:




Obama acts to ease burden of student loans

Also worth watching is Peter Schiff, the American entrepreneur, author and financial commentator who predicted the recession of 2008…




http://www.youngcons.com/billionaire...student-loans/

Why is federal government making money on student loans?
By Kevin Cirilli - 07/23/15 06:00 AM EDT

Donald Trump says he’s the best presidential candidate to help millennials, promising jobs for students drowning in student debt. “One of the biggest questions I get is from people in college [about student loans],” he told The Hill in a wide-ranging interview. “They’re in college — they’re doing well but they’ve got student loans up to the neck. They’re swimming in these loans.”

The 2016 contender said that college students swarm him at campuses where he speaks asking him for jobs. He criticized the federal government for earning a profit from federal student loans, a point Sen. Elizabeth Warren (D-Mass.) frequently raises. “That’s probably one of the only things the government shouldn’t make money off — I think it’s terrible that one of the only profit centers we have is student loans,” Trump said.

“I’ll see so many young people and they work really hard for four years. They borrowed money. Their parents don’t have much. They work all together and they mortgage their future,” the real estate magnate said. “They get good marks — I’m not even talking about the ones that are at the bottom, I’m talking about the ones at the top,” Trump said. “They can’t get jobs and they don’t know what to do.”

He wouldn’t go into specifics, but promised he would create jobs if elected president. “I don’t want to raise the minimum wage. I want to create jobs so people can get much more than that, so they can get five times what the minimum wage is,” said Trump.

http://thehill.com/policy/finance/24...-student-loans

comments

The real question is why is the government in the lending business in the first place. There is a direct correlation between the availability of loans and the increase in college tuition. LIberals pay lip service to the high cost of college, but in reality they love it because those professors are liberals, too.

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Why? The government shouldn't be in the business of making money off its citizens.

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There are HUGE secrets with these loans, like the fact that they can charge you $7500 just for the privilege of having your loan sold, and then they can compound and capitalize interest on that charge, plus every other imaginable fee. It's also NOT made clear that there is no bankruptcy protection, payment plans, or help. It's also not made clear that at any time the federal government can change the terms of the loan to your detriment, with no notice, appeal, etc. With 43 million being crushed by this crap, you'd have to be incredibly stupid and/or egotistical to think that all the terms were perfectly clear, yet all these people were just total idiots. The facts of the situation look much more like what happens when people are defrauded.

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I think what he is saying is that our government is so bad at business the only business they can turn a profit on is one that takes from young adults who do not know any better. the fact that our government can turn a profit at this and nothing else should be a red flag for everyone. Has to be some sort of scam because the politicians in office are clueless when it comes to running a business.
They are great at running for office and spend about 70% of their time doing it, they rest of the time they give speeches and vote on stuff.

Neil Cavuto Repeatedly Confronts Student Pushing Free College Plan With Harsh Facts, Figures
November 12, 2015



Keely Mullen, an organizer for the Million Student March movement, joined Fox Business Network anchor Neil Cavuto on the air Thursday to discuss the movement’s demands for free public college, student debt cancelation and a $15-an-hour minimum wage for student workers. In the awkward 9-minute interview, Cavuto repeatedly cited facts and figures that seemed to fluster the student.

When asked who would pick up the tab for the demands she listed, Mullen said, “The 1 percent of people who are hoarding the wealth and causing a catastrophe students are facing.”

“If the 1 percent just had their taxes raised a few years ago back to almost 40 percent then to pay for the healthcare law, they had them raised another few percentage points, then they had their deductions limited to raise another couple points — depending on the state or locality — they’re pushing over about 50 percent in taxes,” Cavuto told Mullen. “How much more do you think they should pay?”

Cavuto’s question, asked within the first two minutes of the interview, became the centerpiece of the entire discussion, as Mullen was unable to provide a clear answer.

Mullen did say the rate should be raised to “enough until we have a system where not one in two families are threatened with poverty.” And when asked if she and her friends and family would pay more in taxes for her demands, she said “we already are.” However, according to Forbes, 45 percent of households pay no federal income taxes.

Cavuto asked Mullen where the money would come from should “these 1 percent hoarders” leave the country, and Mullen insisted there would always be wealthy people in the U.S. However, later in the interview, Cavuto told his guest that countries around the world, using Greece as an example, have run out of money because the top earners are fleeing.

When Cavuto asked her if she think the 1 percent could actually fund all her demands, Mullen said, “Absolutely.” However, Cavuot claimed taxing the 1 percent at 100 percent wouldn’t even fund Medicare for three years — let alone all of her demands for free services. “They’ve done studies on this, Keeley, I don’t want to get boring here, but even if you were to take the 1 percent and take all of their money — tax it 100 percent — do you know that couldn’t keep Medicare, just Medicare, in this country going for three years?” Cavuto asked. “Did you know that?”

“Yeah, I don’t believe that,” Mullen said in response. “Yeah, I’m sorry, that just sounds completely ludicrous to me.”

Toward the end of the interview, Cavuto told Mullen taxing the 1 percent on 100 percent of their income would only yield “about one trillion” toward any entitlement program.


http://www.theblaze.com/stories/2015...ute-interview/

Atlas Shrugged

December 24, 2015U.S. Economy, Financial Marketscredit bubble, student loan bubble, Atlas Shrugged


A friend sent me a news item from U.S. News and World Report which reported that Louisiana’s board of education is going to implement a new policy which requires all students to fill out a Free Application for Federal Student Aid in order to receive a high school diploma – LINK.

Think about that for a moment. In order to receive a high diploma, the State of Louisiana is requiring that high school seniors fill out an application which would enable them to go into debt the moment they receive their diploma.

This is a mind-blowing event. Most jobs available to high school grads do not require a college degree. But some might require a high school diploma. I have to wonder what the motive is behind this. A significant portion of student debt is now being used for corporate-owned “universities” which are largely worthless to everyone except the entities who own the schools. Goldman Sachs is a big player in this space. Student debt, backed by the Taxpayer, is just another form of wealth transfer from the public to the banks and big corporations.



The amount of student debt issued and outstanding is now over $1.3 trillion. Obama pats himself on the back because student loan delinquency rates are falling a bit. But this is because he has made it easier to defer payment – LINK. While 11.5% – roughly $150 billion – is in delinquency, about 50% of this debt is in some form of grace period, deferment or forebearance. Loans in deferment are not part of the delinquency rate calculation. The true level of delinquency and technical default is probably somewhere in the 35-45% range.

I have to believe that the requirement being implemented in Louisiana is violating some part of the Constitution. Of course, with the simple stroke of a pen, Obama can override the Constitution with yet another Executive Order upholding this requirement.

This requirement in Louisiana is exactly the type insane laws which were imposed by the Government as described in the narrative laid out in “Atlas Shrugged.” Acts of mandate which enabled the Government and the corporate friends of the Government to suck wealth from the populace and from productive workers and redistribute the largesse amongst themselves.

We know how the story unfolds in “Atlas Shrugged.” Unfortunately, I see the same type of story unfolding in the United States.

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

– Thomas Jefferson

http://investmentresearchdynamics.com/atlas-shrugged/

comments

This is also unconstitutional, as most graduates are 18, and FAFSA requires detailed disclosure of PARENT’s financials at risk of perjury/false financial statement penalties. To make it worse, the kid is supposed to complete FAFSA. I have sent 7 kids to college and they have not had the knowledge base (or access to the parent info) needed to complete FAFSA. There is no financial responsibility between an 18 year old and the parents. It is voluntary. A government law that force feeds requirements on un-prepared form filers at the risk of penalty is not a legitimate law.

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The more people in debt, the more the government can control the debtors. So far, it looks like a free ride, but student loans cannot be discharged in bankruptcy. The government will have lots of young people under its thumb – a generation of slaves.

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Debt as slavery. A diabolical way to rule the world without the physical whip. Quite sophisticated really, much better than medieval serfdom.

The invisible collar and chain. You can even convince yourself you are sovereign with it snugly around your neck.

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The First thing came to my mind after reading this was the Music video form Michel Obama.
Go to College:



Nothing in this world happens by accident.

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Since student loan debt is not dischargeable even in bankruptcy, this seems like a first step towards implementing a final system whereby every single student in the country is in debt as soon as they finish high school. This ensures high profits and enrollment for the diploma mill corporations; the Wall Street firms that will chop, securitize, and repackage these loans to be sold to pension plans and the like; and an infinite captive pool of slaves to whom the Fedgov can offer “loan forgiveness” in exchange for working for the government.

yes, the gov’t. wants to “take care of you.”

“From each according to his ability,
to each according to his need.”
– Karl Marx

“The education of all children, from the moment that they can get along without a mother’s care, shall be in state institutions.”
- Karl Marx

“The goal of socialism is communism.”
– Vladimir Lenin

“The problem with socialism is that eventually you run out of other people’s money [to spend].”
– Margaret Thatcher

“Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.”
– Alexis de Tocqueville

“It is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare. And you cannot have both. If you have a welfare state, if you have a state in which every resident is promised a certain minimal level of income, or a minimum level of subsistence, regardless of whether he works or not, produces it or not. Then it really is an impossible thing.”
– Milton Friedman.

“The enduring lesson of the 20th century is that socialism is a failure, and free markets are a success. But the politicians keep advocating just a little more socialism.”
– Milton Friedman

http://iowahawk.typepad.com/iowahawk...e-of-life.html

http://www.theblaze.com/contribution...es-of-america/

“Cultural Marxism entails, among other things, that secularist aspect of left-wing statist ideology that seeks, within society, to supplant traditional values, norms and mores with postmodern moral relativism. Cultural Marxists endeavor to scrub America of her Judeo-Christian, constitutional-republican founding principles, and take, instead, a secular-statist Sharpie to our beloved U.S. Constitution.”

“Who is John Galt?” We are John Galt.

http://www.newsmax.com/InsideCover/A.../15/id/392498/

“Galt, a creator and inventor, symbolizes the idealistic power of the human mind — the antithesis of the stifling, government-controlled social structure depicted in the story. Asked who best embodies the spirit of John Galt in America today, Kaslow says there’s a little Galt in everyone who resists the forces of socialism.”

“Government “help” to business is just as disastrous as government persecution… the only way a government can be of service to national prosperity is by keeping its hands off.”
– Ayn Rand

“We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission; which is the stage of the darkest periods of human history, the stage of rule by brute force.”
– Ayn Rand

“If a society is to remain free, its government must be controlled.”
– Ayn Rand

“America’s abundance was not created by public sacrifices to the common good, but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes.”
– Ayn Rand

“Either we believe that the State exists to serve the individual or that the individual exists to serve the state.”
– Ayn Rand

“Socialism has been tried on every continent of the globe. In light of its results, it is time to question the motives of [its] advocates.”
– Ayn Rand

“Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others.”
– Ayn Rand

“The government was set to protect man from criminals – and the Constitution was written to protect man from the government.”
– Ayn Rand

“Socialism is the doctrine that man has no right to exist for his own sake, that his life and his work do not belong to him, but belong to society, that the only justification of his existence is his service to society, and that society may dispose of him in any way it pleases for the sake of whatever it deems to be its own tribal, collective good.”
– Ayn Rand

“Money is made—before it can be looted or mooched—made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.”
-Ayn Rand, Atlas Shrugged

“When a society establishes criminals-by-right and looters-by-law, men who use force to seize the wealth of disarmed victims, then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.”
– Ayn Rand, Atlas Shrugged

The Real Reason College Tuition Costs So Much
By PAUL F. CAMPOSAPRIL 4, 2015

BOULDER, Colo. — ONCE upon a time in America, baby boomers paid for college with the money they made from their summer jobs. Then, over the course of the next few decades, public funding for higher education was slashed. These radical cuts forced universities to raise tuition year after year, which in turn forced the millennial generation to take on crushing educational debt loads, and everyone lived unhappily ever after.

This is the story college administrators like to tell when they’re asked to explain why, over the past 35 years, college tuition at public universities has nearly quadrupled, to $9,139 in 2014 dollars. It is a fairy tale in the worst sense, in that it is not merely false, but rather almost the inverse of the truth.

The conventional wisdom was reflected in a recent National Public Radio series on the cost of college. “So it’s not that colleges are spending more money to educate students,” Sandy Baum of the Urban Institute told NPR. “It’s that they have to get that money from someplace to replace their lost state funding — and that’s from tuition and fees from students and families.”

In fact, public investment in higher education in America is vastly larger today, in inflation-adjusted dollars, than it was during the supposed golden age of public funding in the 1960s. Such spending has increased at a much faster rate than government spending in general. For example, the military’s budget is about 1.8 times higher today than it was in 1960, while legislative appropriations to higher education are more than 10 times higher.

In other words, far from being caused by funding cuts, the astonishing rise in college tuition correlates closely with a huge increase in public subsidies for higher education. If over the past three decades car prices had gone up as fast as tuition, the average new car would cost more than $80,000.

Some of this increased spending in education has been driven by a sharp rise in the percentage of Americans who go to college. While the college-age population has not increased since the tail end of the baby boom, the percentage of the population enrolled in college has risen significantly, especially in the last 20 years. Enrollment in undergraduate, graduate and professional programs has increased by almost 50 percent since 1995. As a consequence, while state legislative appropriations for higher education have risen much faster than inflation, total state appropriations per student are somewhat lower than they were at their peak in 1990. (Appropriations per student are much higher now than they were in the 1960s and 1970s, when tuition was a small fraction of what it is today.)

As the baby boomers reached college age, state appropriations to higher education skyrocketed, increasing more than fourfold in today’s dollars, from $11.1 billion in 1960 to $48.2 billion in 1975. By 1980, state funding for higher education had increased a mind-boggling 390 percent in real terms over the previous 20 years. This tsunami of public money did not reduce tuition: quite the contrary.

For example, when I was an undergraduate at the University of Michigan in 1980, my parents were paying more than double the resident tuition that undergraduates had been charged in 1960, again in inflation-adjusted terms. And of course tuition has kept rising far faster than inflation in the years since: Resident tuition at Michigan this year is, in today’s dollars, nearly four times higher than it was in 1980.

State appropriations reached a record inflation-adjusted high of $86.6 billion in 2009. They declined as a consequence of the Great Recession, but have since risen to $81 billion. And these totals do not include the enormous expansion of the federal Pell Grant program, which has grown, in today’s dollars, to $34.3 billion per year from $10.3 billion in 2000.

It is disingenuous to call a large increase in public spending a “cut,” as some university administrators do, because a huge programmatic expansion features somewhat lower per capita subsidies. Suppose that since 1990 the government had doubled the number of military bases, while spending slightly less per base. A claim that funding for military bases was down, even though in fact such funding had nearly doubled, would properly be met with derision.

Interestingly, increased spending has not been going into the pockets of the typical professor. Salaries of full-time faculty members are, on average, barely higher than they were in 1970. Moreover, while 45 years ago 78 percent of college and university professors were full time, today half of postsecondary faculty members are lower-paid part-time employees, meaning that the average salaries of the people who do the teaching in American higher education are actually quite a bit lower than they were in 1970.

By contrast, a major factor driving increasing costs is the constant expansion of university administration. According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.

Even more strikingly, an analysis by a professor at California Polytechnic University, Pomona, found that, while the total number of full-time faculty members in the C.S.U. system grew from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183 — a 221 percent increase.

The rapid increase in college enrollment can be defended by intellectually respectable arguments. Even the explosion in administrative personnel is, at least in theory, defensible. On the other hand, there are no valid arguments to support the recent trend toward seven-figure salaries for high-ranking university administrators, unless one considers evidence-free assertions about “the market” to be intellectually rigorous.

What cannot be defended, however, is the claim that tuition has risen because public funding for higher education has been cut. Despite its ubiquity, this claim flies directly in the face of the facts.


Paul F. Campos is a law professor at the University of Colorado, Boulder, and the author of “Don’t Go to Law School (Unless).”

Follow The New York Times Opinion section on Facebook and Twitter, and sign up for the Opinion Today newsletter.

http://www.nytimes.com/2015/04/05/op...s-so-much.html

Gov. John Bel Edwards lays out plan to combat budget crisis: 'I don’t say this to scare you'

In a rare statewide television address, Gov. John Bel Edwards said Thursday night Louisiana’s budget crisis requires sweeping action to avoid closing colleges and universities and watching the state’s health care system implode.

“I don’t say this to scare you,” Edwards said. “But I am going to be honest with you.

“No more tricks,” he said. “No more smoke and mirrors.”

The governor, who spoke for twelve minutes, made his speech just ahead of a three-week special session that starts Sunday on state financial problems.

Edwards, in escalating rhetoric from recent days, painted a grim picture of major problems for higher education, health care and other services unless the Legislature agrees on how to come up with up to $940 million by June 30.

He said that, without legislative action, LSU in Baton Rouge would run out of money after April 30, some campuses would be forced to declare bankruptcy and health care will suffer devastating cuts, including hospital closings.

“The health services that are in jeopardy literally mean the difference between life and death,” he said.

“This is reality -- an unstable state budget will not only hurt children and working families in our state, it will devastate communities, businesses and local governments as well,” he said.

The speech itself was highly unusual.

While a governor’s annual State of the State address is typically carried live by public broadcasting, statehouse veterans could not recall a statewide TV speech like the one Edwards gave Thursday night.

The event was aimed at helping to build public support for legislative action on a shortfall of at least $850 million, and possibly $940 million, amid criticism from some lawmakers and advocacy groups on the governor’s proposals.

“Tell your legislators we need a responsible fix for this budget -- a balance of necessary cuts and responsible revenue that will make our budget realistic and strong,” he said.

Most of the state’s major television and radio states were expected to carry the address.

Republican State Treasurer John Kennedy, who gave the GOP response carried by a Baton Rouge television station, blasted Edwards’ plans.

“Tonight Gov. Edwards asked Louisianians to embrace the largest tax increase in our state’s history,” Kennedy said in a prepared remarks.

Kennedy called the governor “dead wrong” on his approach to fixing seven years of financial management under former Gov. Bobby Jindal. “We are not one tax increase away from prosperity,” he said.

“What we need to do is simple,” said Kennedy, a U. S. Senate candidate. “We need to lower our costs while still delivering a quality product.”

Edwards has proposed a variety of fixes to repair the budget, including a one cent hike in the state sales tax, $216 million; redirecting part of the BP oil spill settlement to the state, $200 million, tapping the state’s Rainy Day Fund, $128 million and boosting the cigarette tax by 22 cents per package, $17 million.

However, the key issue of the special session is whether the Democratic governor and GOP-controlled Legislature, especially the House, can agree on a package of tax increases and spending cuts.

The budget problems, including a $2 billion shortfall for the financial year that begins July 1, are considered the worst of their kind since the 1980s.

“They need to know,” Edwards said Wednesday in discussing the need for a TV address. “This is historic.”

Some Republican leaders contend Democrat Edwards is leaning too heavily on tax hikes to ease budget problems.

The governor said the state’s budget problems stem from two sources.

Revenue is $570 million below official state forecasts, in part because of plummeting oil prices and less than expected sales and corporate income tax dollars.

Another $370 million stems from state obligations that lack funds because of what Edwards called irresponsible budgeting, including TOPS and state aid to public schools.

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Full text of speech (from the Louisiana Governor's Office):

Good evening,

Tonight I speak to you as no other Louisiana governor has ever spoken to our state, because the challenges have never been so great, nor the impacts so severe for all of us who live, work or go to school here.

Just as importantly, though, I speak to you as a fellow Louisianan, a former small business owner, a concerned husband and a father.

Since I took office exactly one month ago today, I have met with business and industry, working families, educators, and parents to share the news of our budget crisis and to discuss workable solutions. I have also met with legislators from across the state - north and South, urban and rural, republicans, democrats and independents to seek their ideas and share my own so that we can get down to the business of solving this mammoth problem as quickly as possible.

I have also received devastating facts from our state's economists showing that we are in an unprecedented position. We've faced crises in the past - when flood waters rose and damaging winds bruised and battered us - we pulled together as one Louisiana. People from every walk of life, black and white, urban and rural joined hands and resolved to get our state back on its feet.

Once again, we must focus on solutions and not allow party labels and bickering to pull us apart.

This Sunday, just three days from now, state lawmakers, will convene in a special legislative session. For the next three weeks, we will take on the grueling task of correcting the largest budget deficit in our state's history.

We know that behind every budget number are real Louisiana citizens.

People like Braden Wilson. Braden is 9 years old and suffers from Leigh's Disease. He has been bedridden since birth and requires around the clock care. There's nothing in the world Braden's mom, Kodi, wouldn't do for her family, and as a father of three I understand that. But the Wilsons and thousands of others like them are at risk of going bankrupt if the state program they rely on to help pay for Braden's care is severely cut. It's called the NOW Waiver program and they can't survive without it. It is one of many that will take a major hit if we do not solve our budget problems.

I will also tell you about cuts we are facing that, without your support to fix, will close down higher education institutions all across our state.

As I sit here with you tonight, we now have a more than $940 million budget deficit for this current fiscal year, ending June 30. In the year that starts July 1, we are facing a $2 billion budget deficit. And because the Louisiana Constitution does not allow us to fix either of these budget deficits in the regular legislative session this year, we have just three weeks, starting this Sunday, to make the changes we need.

We will not be paralyzed in fear by the size of this challenge, nor would we falsely claim “the sky is falling,” but this is a historic fiscal crisis, the likes of which our state has never seen and absolute candor is required.

First of all, how did we get here?

While my predecessor inherited a $1 billion dollar surplus when he became Governor, I've been left with almost a $1 billion deficit for this year alone and a $2 billion deficit next year.

For seven years in a row, the state has had growing budget deficits. Year after year, the previous administration made temporary fixes using one-time funds to

patch recurring expenses, knowing that eventually the well would run dry. And it has.

This year's $940 million budget deficit is made up of two different categories:

First, the Revenue Estimating Conference - the panel of economists and financial experts our legislature relies on - met yesterday and told us that we are $570 million short of the revenue we originally expected for the year. That's the first part of the problem. This is due, in part, to the drop in oil prices and a slowdown in sales and corporate tax collections. In fact, we're paying out more in credits and refunds to corporations this year than we are collecting from them in taxes. This is not sound financial policy.

The other part of our $940 million budget problem this year is $370 million dollars in commitments we made that we don't have the funds to pay for. This is partly due to irresponsible budgeting by the previous administration. They failed to account for how many people would need access to public health care, how many students would qualify for TOPS, how many people would enroll in our public schools, and how many state inmates would be housed by our sheriffs, among other failures. Now the money is not there to pay those bills.

continues ...

I know we've all heard alarming talk about budgets before, but this is our reality. There are some who will try to downplay the severity of our problems for political gain. Some will claim our state's economists' numbers are false. Others will say we simply need to cut our way out of this mess. Remember, for 8 years, we've had a conservative Governor with a conservative Legislature, if stabilizing the budget were as easy as cutting spending and simply reducing state contracts, that work would have been done, but it hasn't.

Today, the stakes are far too high for Washington-style politics, or for a crisis in leadership. I recall saying two things our state would never run out of were gumbo and gumption….now is the time for both.

To stabilize our state's budget we should not shy away from the fiscal right sizing that is needed. For me “right sizing” requires that we get both the spending and revenue right. Focusing on one without the other would be irresponsible.

But, I want you to understand that, if left unresolved - if the legislature does not choose a way to raise additional dollars to strengthen the budget - very soon, we will face unimaginable cuts to vital state services. Here are some examples.

Our health care system is on the verge of imploding. The Department of Health and Hospitals is already facing severe cuts. And without new revenue, those cuts will be catastrophic. With larger cuts looming next year, safety net hospitals will close, starting in places like Lake Charles, Alexandria and Bogalusa.

The health care services that are in jeopardy literally mean the difference between life and death. Funding for vital services like hospice care and end-stage kidney dialysis would be impacted.

The New Opportunity Waiver program, also known as the NOW waiver, which provides much-needed help for families with developmental disabilities like Kodi Wilson's, whom I told you about earlier, is under consideration for painful cuts and could be offered to far fewer people.

I don't say this to scare you. But I am going to be honest with you. No more tricks. No more smoke and mirrors.

Let's talk about our universities and community and technical colleges.

The Louisiana TOPS scholarship fund is now so depleted that, if the legislature does not raise revenue, fewer high school students will receive awards and current recipients are in jeopardy of losing their existing scholarships for next year.

Even with additional revenue, higher education this year will need to cut $42 million. This will be combined with a $28 million cut in TOPS scholarship funds that the universities will have to absorb, resulting in the largest mid-year cut in Louisiana history. However, if there is no new revenue raised this year, higher education will face catastrophic cuts over the next 4 months. And that comes on the heels of the largest disinvestment in higher education in the nation over the last eight years.

As I mentioned earlier, if the legislature fails to act and we are forced to proceed with these cuts, the LSU Ag Center and parish extension offices in every parish, and Pennington Biomedical Research Center will close by April 1st and the LSU main campus in Baton Rouge will run out of money after April 30th, as will the Health Sciences Center in Shreveport and LSU Eunice. There is no money left for payroll after those dates. The Southern University System, and University of Louisiana System, and the Louisiana Community and Technical College System are in the same boat: without legislators approving new revenue this special session, some campuses will be forced to declare financial bankruptcy, which would include massive layoffs and the cancellation of classes.

If you are a student attending one of these universities, it means that you will receive a grade of incomplete, many students will not be able to graduate and student athletes across the state at those schools will be ineligible to play next semester. That means you can say farewell to college football next fall.

The development of our technical and community college system has been one our greatest points of progress in the last two decades. The current budget realities will decimate these institutions as they are already preparing to lay off 1,200 employees at a time when business and industries primary concern is the development of a world class workforce.

These are not scare tactics. This is reality -- an unstable state budget will not only hurt children and working families in our state, it will devastate communities, businesses and local government as well.

So, where do we go from here?

While I did not create the problem before us, as your governor, it is my job to fix it - and that is what I intend to do.

I am fully aware that I did not campaign on a platform of raising taxes, but the state's deficit is now more than twice as big as anyone ever anticipated. So clearly, when the facts surrounding the problem change so dramatically, so must the solutions.

Here's what I need you to do: We cannot solve this problem without support from you for the measures I am proposing to stabilize our budget.

First of all, I am proposing significant cuts, including a hiring freeze across state government, a reduction in state contracts, and I'm making more than $160 million in cuts to state government spending. I also propose to use $128 million from the rainy day fund and $200 million in non-coastal BP payments to the state to reduce the current year deficit.

Beyond those painful cuts and other proposals to fill our current $940 million deficit, and next year's $2 billion deficit, I am proposing a set of revenue-raising measures to stabilize our budget.

These proposals include further reducing tax credits, suspending corporate tax deductions, and adding one penny of sales tax to our state's four cent sales tax. I am proposing this penny as a bridge that will give us time to stabilize and restructure our state's tax code. When that restructuring is complete, this penny sales tax will be removed.

As a part of this restructuring, I am also proposing an increase in alcohol and cigarette taxes.

So, as we begin this very hard work, I need you to call your representatives and your senators. You can find out how to do that using a link on the governor's office website at gov.louisiana.gov.

Tell your legislators we need a responsible fix for this budget - a balance of necessary cuts and responsible revenue that will make our budget realistic and strong. When you hear others talk about solutions, demand specifics.

Together, we will solve this historic problem.

In Louisiana, we are resilient, and we are determined to meet any challenge that comes our way. We are experienced at working together in the face of great adversity, and I know our brightest days are ahead of us.

As we begin this critical work together, please join me in praying for our state, and I'm asking you to please pray for me and for all of our elected officials.

God bless you and your family, God bless the great state of Louisiana and God bless the United States of America.

Thank you all and good night.

http://theadvocate.com/news/14835234...udget-problems

comments

Strategically announced on the Thursday before the Special Session starts on February 14th. All part of the political game to use TOPS as leverage to get legislation passed during that session that he is worried won't get through. He makes this announcement and Legislators are bombarded with calls and emails and everyone is distracted and then he will come forward and offer a COMPROMISE to save TOPS and get what he really wanted in the first place. The only cuts he can find to make in the budget is to TOPS????? I am sure that there is a lot of wasteful spending going on that could be cut before TOPS or adding taxes..

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Did I hear him right when he said we are paying 12 MILLION to a consultant to help teach how to lower the budget? Please tell me I misheard that amount.

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I find it interesting that the one of the Presidential Democratic Candidates is running on FREE College Tuition and our newly elected Democratic Governor has just suspend the College Tuition assistance program. TAXES, TAXES, TAXES.

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New governor comes in and erases welfare restrictions and loses TOPS. The answer is to regulate the welfare system. But .... to do that would cost the democrats power/votes.

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So, our governor immediately takes away WORK requirements for able bodied food stamp recipients, but now hard working students get their PERFORMANCED based benefits suspended, typical way a Democrat takes care of the WORKIN MAN, thanks Jon bell, the WORKIN MAN salutes you for looking out for us!

So, our governor immediately takes away WORK requirements for able bodied food stamp recipients, but now hard working students get their PERFORMANCED based benefits suspended, typical way a Democrat takes care of the WORKIN MAN, thanks Jon bell, the WORKIN MAN salutes you for looking out for us!

John Bel Edwards Will Remove Requirements That Force Food Stamp Recipients To Work For A Living
December 21, 2015 - John Binder

Though Governor-Elect John Bel Edwards (D-Amite) ran as a centrist and the Louisiana media promoted him as a ‘conservative Democrat,’ his policy positions are right in-line with the left-wing of the state’s Democratic Party.

Under a new regulation by current Gov. Bobby Jindal (R-LA), about 62,000 18-49 year old Louisiana Purchase card-holders (a glossy credit card for food stamps) would lose their benefits if they do not have at least a part-time job or in a job training program by Jan. 1.

But, after liberals continued to claim that the idea is “heartless” and offensive to ask welfare recipients to work, Edwards says he will revoke the plan when he is sworn into office in early January.

Edwards sent a letter today to the US Department of Agriculture which would grant a waiver to food stamp recipients under the pretense that the state’s unemployment rate qualifies it to not abide by the work mandate for welfare recipients.

Edwards has asked the USDA and the state’s social services departments to make sure that benefits to non-working food stamp recipients are not interrupted.

http://thehayride.com/2015/12/john-b...-for-a-living/

Here’s How The Media Made John Bel Edwards Look Like A Saint When He Dumped The Food Stamp Work Requirement
December 28 2015 - John Binder

The Louisiana media still adores Governor-Elect John Bel Edwards (D-Amite). So it was only natural that when Edwards said he would be dropping the food stamp requirement which would mandate able-bodied recipients to work part-time for a living, the media would portray him as a saint of the poor.

Per Journalism 101, the Louisiana media knows that half the time, readers only read the headlines of articles or perhaps the opening sentence of an article. Therefore, a slew of Louisiana media outlets made sure they got their narrative across that Edwards is a saint coming to save the state.

Take for instance, the Times Picayune, the most obvious offender of being biased with the food stamp/Edwards story.

The Times Picayune published a piece early in the month about how Edwards was looking into “restoring food stamp benefits benefits” as they wrote in their headline. And this was the opener for the article:

Gov. Bobby Jindal’s administration has decided not to re-apply for a waiver that allows out-of-work residents to apply for food stamp benefits after they’ve been on the program for three months.

But because Louisiana’s unemployment rate is above the national average, Gov.-elect John Bel Edwards could decide to apply for the waiver once he takes office Jan. 11. Doing so could restore food stamp benefits, also known as the Supplemental Nutrition Assistance Program, to as many as 64,000 Louisianians who have been unable to find work.

Here’s the takeaway narrative: ‘John Bel Edwards is trying to feed the hungry and nurse the sick, while the evil Gov. Bobby Jindal is trying to leave people out in the cold.’

Then, when Edwards announced that he would remove the work requirement for some food stamp recipients, the Times Picayune rejoiced with this headline: “John Bel Edwards wants to restore Louisiana food stamp benefits.”

The headline alone, accompanied with a picture of a man holding a sign that reads “Food is a human right!” makes Edwards seem like a kind of savior to the poor.

And the opener for the article was even more biased:

Gov.-elect John Bel Edwards said Monday (Dec. 21) that he’s asking the federal government and the Louisiana Department of Children and Family Services not to interrupt food stamp benefits to about 31,000 residents. As of Jan. 1, those residents faced the possibility of losing the assistance because Gov. Bobby Jindal’s administration decided not to apply for a waiver that would have allowed the federal benefit to continue in Louisiana.

Not one single mention about the fact that the requirement Jindal was enacting would simply make able-bodied 18-49 year old welfare recipients work for a living.

Instead, the Times Picayune opted for the ‘interruption in food stamp benefits’ narrative, failing to mention that the work requirement does not interrupt food stamps for recipients, unless those recipients refuse to get a job, classes, training, or volenteer.

The New Orleans Gambit followed the same narrative as the Times Picayune, not mentioning the work requirement in their headline or their opening sentence:

On Dec. 21, Gov.-elect John Bel Edwards asked the state’s Department of Children and Family Services (DCFS), as well as the federal government, to prevent the interruption of Supplemental Nutrition and Assistance Program (SNAP, or food stamps) benefits that are set to expire at the beginning of the year, after Gov. Bobby Jindal denied a federal waiver extending those benefits in October.

And WBRZ followed suit as well. Do these guys get together and decide what the narrative for the story will be?

‘Okay guys, the narrative for Edwards not making people work for their food stamps will be that Jindal is trying to screw over the poor and Edwards wants to stop the interruption of welfare benefits. Ready. Set. Break!’

WBRZ published what looked like a fair article about the food stamps/Edwards story on Dec. 21. The headline included the work requirement Edwards would be dropping and the opening sentence did the same.

Then, the following day, WBRZ published a piece about the same food stamp work requirements, claiming that Jindal did not provide statistics which showed that a work requirement for food stamp beneficiaries helped them get work.

The headline read “Jindal sells his food stamp plan, but can’t support it with data,” and the opener reported that Jindal “claimed mandatory work requirements spurred poor people into the job market but he didn’t offer data to support his argument.”

Did WBRZ ask Edwards if he had proof or statistics that dumping the food stamp work requirement actually helped recipients find work in the future? There were no statistics cited by the Edwards-transition team with their announcement, but WBRZ didn’t demand proof from them.

Though, a media double standard for Democrats and Republicans isn’t all that shocking these days.

http://thehayride.com/2015/12/heres-...k-requirement/