BATON ROUGE, La. (AP) — Financing for an incentive fund touted by Gov. Bobby Jindal as key to helping solve Louisiana's worker shortages has dropped to 60 percent of its original goal a year after its creation.
And the hurricane recovery dollars set aside for it have so many limitations that spending plans haven't been drawn up for this year's use of the money, because colleges still are working through paperwork for last year's spending.
The $40 million Workforce and Innovation for a Stronger Economy Fund, or WISE Fund, was widely praised when it was created in 2014 to pay for college programs aimed at filling high-demand jobs, like in computer science, engineering and construction specialties.
The fund was described as one of Louisiana's most significant higher education investments in years, as the state is threatened with acute worker shortages in the petrochemical and manufacturing industries.
A year later, people continue to applaud the intent, but worry about the financing.
Monty Sullivan, president of the Louisiana Community and Technical College System, credits his system's first-year allocation of nearly $12 million from the WISE Fund with helping more than 2,700 students complete degree and certificate programs and head to jobs with an average annual salary of $50,000.
"We have spent every single nickel of that WISE money on those occupations that are the seven most in-demand fields in the state," he said. Sullivan described the incentive fund as a "tremendous investment by the state of Louisiana."
He said investing in high-demand fields and filling available jobs has strong returns for the state, creating new taxpayers who invest in the state's economy.
But in crafting this year's budget, lawmakers struggled simply to continue providing basic financing for higher education. They reduced the set-aside to $24 million for the WISE initiative — and paid for it solely with hurricane recovery money, rather than the mix of recovery dollars and state revenue used last year.
Recovery money is trickier to use because the dollars need to follow federal guidelines, giving colleges far less flexibility.
"We're not complaining about any money or any source of funds. We're going to find a way to use it, so I don't want to appear ungrateful," said University of Louisiana System President Sandra Woodley. But she also acknowledged: "It's challenging."
The dollars — allocated to the state after hurricanes Gustav and Ike in 2008 — have so many hurdles, officials with the Board of Regents aren't even sure colleges can use the full amount this budget year and will start off making plans for only $12 million of the allocation.
Barbara Goodson, chief financial adviser for the Regents, said the state is still working through the limitations of the federal hurricane recovery money.
"We're kind of in a holding pattern right now," she said.
Sullivan said the holding pattern "is not a good place to be when you have occupational demands like we have."
The hurricane aid can only be spent in 53 of Louisiana's 64 parishes, on programs that assist low- to moderate-income students, in coordination with approval from the U.S. Department of Housing and Urban Development.
The spending is reimbursed, so campuses have to float the money upfront and then file paperwork to get the dollars back.
About $12 million of last year's $40 million WISE Fund allocation was from recovery money. Only LSU has submitted reimbursement paperwork so far, for $3.5 million.
Goodson said no plans have been made yet for this year's WISE spending because Regents is waiting to make sure the reimbursements are on track for last year.
"It's better to be cautious at this point, than for HUD to come back five years down the road and say you owe us this money," Goodson said.
Pat Forbes, the Jindal administration official who oversees the state agency handling hurricane aid, said his office worked to make sure campuses were spending their recovery money in compliance with federal guidelines.
"It's just getting the documentation correct to satisfy auditors," he said.
Despite the reduction and limitations, Jindal spokesman Doug Cain said the WISE money "will be used to continue to strengthen and expand pathways to high-demand, high-wage jobs in our state."
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Posted on Tue, August 11, 2015
by Melinda Deslatte, Associated Press