Showdown brewing with state over higher education funding

By Anthony Ramirez

Monday, Sept. 20, 2010 | 2 a.m.

In the debate over more budget cuts, a theme is emerging from the university system: “Don’t punch a guy with glasses.”

The capitol’s reply, at least so far: “Why not?”

State spending on higher education has dropped 28 percent from 2007-09, the peak two-year budget, to $954 million in the current budget cycle.

The state budget director’s office is projecting a shortfall for 2011-13 of up to $3 billion. Gov. Jim Gibbons has asked all state agencies for 10 percent budget cuts.

“All agencies did that, except for one,” said Daniel Burns, the governor’s communications director.

The Nevada System of Higher Education proposed an overall budget increase of 3 percent, including a nearly 25 percent boost in state funding, for a total budget proposal of $1.65 billion.

The university system, whose board of regents is elected by voters and not appointed by the governor, does not regard itself as a state agency.

Last week, Neal Smatresk, interim president of UNLV, was asked about the state of UNLV: “We’re OK, but we’re on thin ice.”

Guessing budgetary outcomes now is premature: Projections for next year’s receipts won’t firm up until the end of the year; the Legislature will meet in February, and the fiscal year begins in July.

But at some point, Burns said, “We’ll all have to sit in a room and look at each other. We have this much money. What are we going to do?

“The governor regards education as the intellectual infrastructure of the state, but where do we get the money?”

Whatever budget the governor submits this year, it will contain no new taxes, he said.

“Who are we going to tax?” Burns said. “The company who had to lay off workers or the mother of two who just got laid off?”

Because Gibbons lost the primary, it will be up to either Republican Brian Sandoval or Democrat Rory Reid to accept or revise Gibbons’ budget.

And the new governor must then negotiate with the Legislature.

Budget pressures are everywhere. High-level state employees must take at least one day leave a month without pay and most workers must take 96 hours of furlough during each of the coming two years. “I’m on my furlough day,” said Burns, a state employee, with little cheer, “and I’m talking to you.”

A spokeswoman for Sandoval, who is leading in the polls, issued a statement on the state’s fiscal condition:

“Just like businesses across Nevada are being forced to cut back, state government is going to have to cut back. We simply cannot balance our state budget without shared sacrifice from all programs, departments and state employees.”

Mike Trask, spokesman for Reid, said his candidate strongly supports education.

Reid is planning to release a detailed plan for K-12 and higher education as early as the end of September.

Trask said Reid had also taken taxes off the table and saw no contradiction between supporting education and rejecting additional revenue.

“I don’t think we’re deluding anyone,” Trask said.

State legislators are guarded. Steven Horsford, a Democrat and the Senate majority leader, said in a statement:

“In these difficult times, we cannot destroy the fabric of the state, and that includes ensuring that our higher education system remains accessible as Nevadans seek more education to train and retrain for future jobs. We must diversify the Nevada economy, and part of that process must be to ensure higher education and industry come together to train our workforce for new industries. We will work closely with the (university system) chancellor to do the best we can to meet these goals.”

Smatresk, who gave his State of the University address last week, said, “The talk lately has been all about how we’re going to cut higher education.”

Smatresk paused and said, “if we could cut ourselves to greatness, I would have done it a long time ago.”

Still, university officials recognize the budget crisis. They have offered concessions, such as encouraging students to graduate sooner, and seeking new nonstate revenue, such as charging students in high-cost majors, like the sciences, higher tuition and fees than in, say, art history.

But university officials insist on one thing: The system keeps every dollar of any increased student fee that results from the state’s move to balance the budget.

Under the current funding formula, part of every dollar from home-state student fees and all out-of-state student fees help pay for programs that have little to do with higher education.

In general, the system gets more money the more students it has. But there are few incentives for students to graduate, increasing the university’s operating costs.

“Nevada doesn’t need bottoms in seats, it needs bottoms crossing a stage at graduation,” said Dan Klaich, university system chancellor.

What is striking in Klaich’s austerity plan recently submitted to the regents is the university system’s determination to eliminate what it calls “low-yield programs,” such as the German major recently eliminated at UNR.

“If you’re not producing graduates, you may get cut,” Klaich said in an interview. “You can’t teach everything, particularly at a small to medium public university. We need to say that out loud.”

Because so many students are part-time and are working their way through school, it can take six years or more for them to graduate.

“It’s expensive to keep people in school,” Klaich said, “and the student doesn’t pay for all of the cost.”

Therefore, the university will seek accelerated degree programs. Currently, high school seniors can take advanced placement examinations that could help them graduate from college in less than four years.

High schools might offer classes that would count toward college degrees, Klaich said, or a college student might take five classes a semester, instead of the more typical four or fewer.

Assemblywoman Sheila Leslie, D-Reno, called Smatresk and Klaich’s proposals “timely and worth reviewing.”

“However,” she wrote in an e-mail, “higher ed is not the only area of the state budget facing critical shortfalls. We will need to find a balance between the need to provide financial support for higher ed with needed funding in K-12, health and human services, and public safety.”

She added, “while I consider higher education to be an essential service, it isn’t the only one.”

Klaich emphasized that the university’s proposals are in return for a “long-term funding commitment” from the governor and the Legislature.

Burns’ response?

“My immediate reaction to that, if that’s fancy talk for tax hikes, it’s not going to happen.”