BATON ROUGE, LA (WAFB) - The outlook for LSU continues to unravel with Governor Jindal's massive cuts to the basic operations of the flagship university.
LSU faces a dire financial situation, making plans Wednesday to file for what is essentially "academic bankruptcy" if the state cannot find more money for higher ed.
This comes on the heels of the credit rating agency Moody's Investors Services lowering the university's credit outlook from positive to stable.
State Treasurer John Kennedy says this move reflects the years of cuts and tuition hikes statewide, but says decisive action by the legislature could turn this around.
Kennedy adds this move means LSU is one step closer to a possible credit rating drop. That means, among other things, LSU would have to pay higher interest rates on loans and any money borrowed.
Kennedy says he warned about the cuts and compared them to torture.
"After waterboarding our universities for the past 7 years and cutting them by $700 million, the rating agency Moody's has downgraded them," said Kennedy. "I can tell you our competitors at the University of Texas, the University of Alabama and the University of Georgia are already writing to kids that we're competing for. They're already tell their parents all 'Look, LSU just got downgraded. You don't want to go LSU. They're going to go broke."
LSU says they're making sure they're ready for the worst. LSU President and Chancellor F. King Alexander released a statement Wednesday afternoon:
Gov. Jindal's chief of staff, Kyle Plotkin, responded by saying, "This is exactly why we proposed cutting over $500 million in corporate welfare to help protect higher education. There are some corporations in our state that are paying zero in taxes and getting free taxpayer funded checks from the state. That's not right. We need to cut this corporate welfare and invest these dollars in higher education."