IN a move that education officials here are hailing as a sign that Louisiana is about to improve and make more competitive its higher education system, a legislative panel has decided to allow universities to determine the size of raises they want to give their professors.The decision by the Joint Legislative Committee on the Budget followed an earlier action in which members of that panel rejected the notion that colleges and universities should have the final say in determining pay raises and voted to continue the policy of providing a flat 5 percent, across-the-board pay hike for all faculty members. University officials argued strenuously against the mandated percentage, saying that it failed to take into consideration the merits and skills of individual professors and gave no reward or recognition to professors with superior teaching abilities. Said Marvin Roubique, assistant commissioner for finance of the Louisiana Board of Regents: "Not only have our faculty salaries been below both the national and regional averages, they have also failed to reward merit. An across-the-board raise only continues problems that have plagued Louisiana and its higher-education system for years; everyone gets the same pay raise, so there's no motivation for a professor to do better." Higher-education officials here, especially Sammie Cosper, Louisiana's commissioner of higher education, said that an across-the-board raise also was unfair to teachers with seniority because it gave them the same pay hike that a new professor would get. By way of comparison Mr. Cosper said an accountant in Louisiana may have started work in 1984 at a salary of $30,000, but without a pay raise since then that accountant would still be getting the same paycheck. Yet a just-hired accountant in 1991 might s tart out at $50,000 - and to give both a 5 percent salary boost would be unfair. However, members of the Joint Legislative Committee argued that by giving universities the freedom to decide who should or should not get a raise, the chances were great that some faculty members would get no pay hikes at all - an equally troublesome morale problem. Sen. B. B. "Sixty" Rayburn (D) of Bogalusa recommended that the change be reversed, and the committee voted to yank the $14.8 million relegated for professors' pay hikes as determined by the universities and substitute a mandated, across-the-board raise. That decision not only drew the ire of dozens of college officials, it also drew heavy criticism from the Louisiana news media. "The reaction to the committee decision was very strong and mostly negative," said Tommy Jean Dodd, executive assistant for the Joint Legislative Committee. "We felt a lot of heat from the college presidents who got in touch with us, or came before the committee, and made one point essentially - that the politicians should just stay out of it." But Mr. Dodd said the earlier committee decision wasn't entirely unpopular. "Actually some professors supported our action because they knew that doing it our way meant that at least everyone would get a raise. And that was precisely the point that bothered the legislators; they were just worried that some professors wouldn't get any pay increase at all." After an intensive, month-long lobbying effort by many higher education officials, the committee last week reversed its earlier decision and gave the colleges the freedom to set individual faculty pay raises, particularly after Cosper assured the lawmakers that most campuses in Louisiana have faculty committees that review any and all pay raise complaints and disputes. "One of the biggest problems in Louisiana has been that our professors haven't been getting any raises at all for several years because of the recession," said Mr. Roubique. "Now, not only are they finally going to get the kind of hikes that will bring them closer to what the rest of the nation pays, but they will also be rewarded for good work. A big problem has been ironed out."