Let’s Pretend We Can Make Sense of SAVE

Yesterday afternoon, the much derided SAVE credit (Student Assessment for a Valuable Education) died again on the House floor. This zombie credit has already died once after its original bill (SB284) was tabled in the House, but was attached to another bill briefly before that amendment was pulled.

Depending on who you talk to, SAVE is-

  • a dangerous shell game
  • a disturbing precedent that, if passed, would allow the state to arbitrarily raise taxes under the guise of fake credits
  • the only thing that will keep Bobby Jindal from vetoing this year’s budget

Or, according to our higher education leaders, “SAVE provides both significant and sustainable sources of revenue for higher education institutions without students or families bearing any additional costs.”

(Huh?)

Now some of our ever-courageous representatives even wrote Grover Norquist of Americans for Tax Reform (because everyone knows that “tax reform” really means, no taxes, no government, privatize everything) to get his opinion. Because he has the final say on our budget. If it doesn’t get ATR’s stamp of approval, Bobby Jindal will veto it. That simple.

Norquist wrote back, claiming that although ATR did not take a position on SAVE per se, it does meet its definition of an “offsetting tax credit.” More creepily, he stated that he was disappointed that the Legislature didn’t Kill the Unions instead and concluded, “As occurs in states across the country, ATR is more than willing to work with lawmakers in Louisiana to help find ways to reform government so that spending is at a sustainable level and tax increases can be avoided.”

So–give ATR control over our budget process, or else. That’s what The Pledge means.

But let’s go back to our higher education leaders’ plea to save SAVE. How would this bill provide “sustainable sources of revenue for higher education institutions”?

Well, let me explain.

Right now, higher education has NO constitutional or statutory protections in our state budget. None. Our state could cut our general appropriations to a big fat zero and it would be constitutionally A-OK.

But, attach part of our funding to a tax credit and the game changes.

SAVE would establish a per-student fee at our institutions. Right now the proposal is $1500 per student. So the fee would be based on headcount enrollment. Current enrollment is 219,088. Multiplied by $1500 is $328 million for higher education. I don’t know where the $350 million is coming from unless we are all very hopeful that the proposed admission criteria will be approved by Regents in time to have that much of an impact on enrollment (it’s very late in the admissions cycle so I am doubtful).

Higher education institutions would report headcount to the Board of Regents just like they do now. Toward the end of the fiscal year (??) the SAVE funding would come from the state to the Board of Regents, and then Regents would allocate those funds along with their other appropriations to the institutions according to the current performance based formula.

Students wouldn’t actually pay the fee. It would be credited to them and to their parents against their taxes. I’m not sure if they have to actually claim this on their taxes or not, but since they would never pay the fee in the first place–just see the credit on their tuition bill–it looks to be more or less automatic.

So SAVE does a little more than just save our state budget against the veto axe. It also gives some statutory protection for higher education. IT IS A REFUNDABLE TAX CREDIT. But instead of the refund going to students and families, it would go to higher ed.

That makes it like the other refundable tax credits to the film industry and such that have been under attack.

It maintains the structural deficit that got us here in the first place. But helps to save higher ed. We would get this money plus the other revenue that was raised for us, and since SAVE is a credit, it helps make the state budget “revenue neutral.”

Dear God, what a MESS.

Why can’t we just statutorily and constitutionally protect higher ed and call it a day.

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