Making dollars count

Sunday, Aug. 26, 2012 | 2 a.m.

Since late last year, a legislative panel has been studying how the state funds higher education, and it is meeting Wednesday to finalize its work.

This is an important issue that, we fear, may be overlooked because it sounds wonkish. However, the committee’s recommendations, which will be the basis for the Legislature’s work next year, could have a great effect on the state.

How Nevada funds its higher education system will help determine the future economy. Colleges and universities can be economic engines, providing not only a trained workforce but also places to incubate research and development that can spur and draw new business.

Nevada’s higher education system has suffered under a funding formula that hasn’t kept pace with the needs of either the colleges or the state.

Consider that a report card released this summer by the U.S. Chamber of Commerce’s Institute for a Competitive Workforce gave Nevada a D average. Nevada was the only state to receive Fs for student access and success for both four-year and two-year schools, which were graded separately. Nevada’s four-year schools received a D for meeting labor market and demand, and the two-year colleges received a C.

If that hasn’t hurt Nevada’s reputation, consider that the state doesn’t have a university that has earned a top-tier ranking from the Carnegie Foundation for the Advancement of Teaching. Other states with populations similar to Nevada’s have universities that have earned the prestigious ranking — including Arkansas and Mississippi.

Arkansas? Mississippi? But not Nevada?

This is a time for the Legislature to take dramatic action to put the states colleges and universities on track to compete with the rest of the country. The key is changing the funding formula to make it more strategic and competitive with other states, and that’s where the committee comes in. It was tasked with studying the old formula and making recommendations to better serve the state.

The committee should be talking about overhauling the funding formula to create greater parity and provide money where it will best serve Nevada. This is an issue suited for the Legislature’s policy-making role.

However, the discussion has instead turned to a formula aggressively pushed by Dan Klaich, the chancellor of the Nevada System of Higher Education.

He has driven the discussion by airing his proposal before the Legislature’s committee had hired a consultant or had done much work.

Klaich’s proposal moves money around, which may make some people who get a few more dollars happy, but it doesn’t fully address fundamental parity issues among the state’s colleges and universities and doesn’t appear to include schools in the state’s economic development goals.

At the most recent committee meeting, Senate Majority Leader Steven Horsford called the formula “unacceptable.” As Paul Takahashi reported in the Sun, Horsford, the committee chairman, said the proposal was “tinkering, not fundamental reform.”

Klaich has tried to back up his proposal with work done by a consultant, the National Center for Higher Education Management Systems. It is ironic: NCHEMS was part of a bid to do the committee’s analysis, but that bid wasn’t chosen.

NCHEMS’ work is the basis for Klaich’s proposal. And its findings have been questioned because it hasn’t fully explained how it did its work or came to its conclusions. Klaich admitted that he didn’t exactly know the methodology NCHEMS used in studying funding formulas and said he didn’t “second-guess” it. And he complained that the system couldn’t afford a full cost analysis to undergird the proposal.

But how was the formula derived? A Yahoo! search? Wikipedia? A dartboard?

This should raise red flags for Horsford’s committee, and giving its approval to such a proposal would be a serious mistake.

Because of what’s at stake, the committee, the Legislature and the public should have a full understanding of how a formula will shape Nevada’s colleges and universities — and the state’s economy.

Given how important this issue is, the committee should take its time and get this right, and not prematurely adopt the first proposal to reach the table.