Las Vegas Sun

March 28, 2024

Six Questions:

UNLV president sees education funding as an investment

smatresk

Christopher DeVargas

UNLV President Neal Smatresk says the university brings Nevada more than $300 million a year from out of state.

With unemployment in Las Vegas running at 13.6 percent, even college graduates are finding it tough to find jobs. The recession has decimated state general fund revenue, which is projected at $5.8 billion for the coming biennium. That’s down from $6.2 billion in the two-year period ending in June.

With that kind of math, and little appetite for tax increases in Carson City, UNLV and the rest of the Nevada System of Higher Education are preparing for Gov. Brian Sandoval’s proposed 22 percent cut in already trimmed budgets. With spending reduced to $742 million, faculty layoffs and elimination of entire programs are expected.

UNLV President Neal Smatresk last month reacted by proposing cuts of $32.6 million and the loss of 315 faculty and staff positions. If these cuts go through, UNLV will have made cuts totaling $97 million and 855 positions over a five-year period.

Smatresk looks fit and rested. You wouldn’t know that he is enduring despair, anger and genuine frustration. He must explain why UNLV should be spared from further cuts even though he knows the big tourism and construction industries in Las Vegas have shed 75,000 jobs since 2008.

Smatresk lays out a compelling argument: State funding for UNLV is not spending, but an investment in the Southern Nevada economy.

As Carson City cuts UNLV, fewer faculty and staff will spend money locally. Fewer nonresident students will move here, rent apartments and buy groceries. Fewer federal grant dollars to UNLV will be multiplying through the economy.

“If you’re GM you might cut your losers, but you’re going to keep your profit centers. We’re a profit center for the state, but the state seems to view us as a cost. We need to change that thinking,” Smatresk said during an interview.

What follows are highlights of the conversation:

Should the higher education community take some of the blame for the current predicament for not better communicating your story about the value of UNLV when times were good?

Yes. But I think our state has never placed high value in higher education. We’ve always been the budget balancer. As other parts of the budget mandatorily grew, the mantra was “They can always charge more tuition.” So we get squeezed because K-12 can’t charge tuition. I don’t want it to seem like I’m pitted against K-12 because they’re our sister educational limb. But every year it’s the same thing; we get the biggest cuts. Should we have done a better job of explaining it? We tried and there was a mixed bag of strategies used. A lot of folks thought that when we took the $50 million in cuts we’ve already taken that we were crying wolf and it wouldn’t really hurt us.

The general belief by many, many people in our state — and it’s kind of a national belief — is that “those higher ed people are kind of fat and well paid and don’t work very hard.”

We’ve become public employees and public employees are now the enemy.

We’ve gone through this winnowing in industry here. Thousands and thousands of people have lost their jobs. Their pay structures have been changed radically. That’s the challenge of working in the private sector. The glory years are over, and there’s an awful lot of resentment of public employees who chose this slow and steady path.

How frustrated are you about the budget cuts?

I vacillate between despair and anger. At a minimum this is the most frustrating experience of my life because all the metrics support the value of higher education, and when you invest in higher ed, your state does better. It’s universally understood. So as we radically disinvest, and believe that we can cut our way to greatness, I feel people are guilty of magical thinking.

There’s a large group of business professionals in this community who really understand the benefit of UNLV, value it and support it. You can look at our foundation board and our chamber of commerce and other entities, the Nevada Development Authority, they all know we need to have a good university here.

But the chamber for years has fought measures to broaden the tax base and develop a more stable revenue source for the economy, while the NDA sells Nevada as a low-cost place to do business.

The folks in those groups are major decision makers in our state. Working with them, bringing them to our campus, working collaboratively is really the key to gaining the kind of support that we need so we can establish a reasonable revenue flow that’s predictable and stable.

You believe your participation with these groups will change things?

There’s a very strong sentiment of support in both of those agencies, and we have to break through to that last little bit where there’s a recognition that only cutting the revenue flow to higher ed isn’t an answer.

They’re looking for us to be very responsive to them, and we’re willing to put that completely on the table and develop strong partnerships.

But the flip side of that coin is that we can’t do it with the kinds of cuts we’ve had — we need them to back budget stability.

The no-tax mantra is a little bit of a reflex. I don’t blame them. Who wants to pay more taxes? But if you view taxes into profit centers as investments — who in their right mind would want to lose that business (generated by UNLV for the state’s economy)?

What do you say to people who feel that because UNLV isn’t going to become Stanford or MIT, it’s not worth supporting?

If your state dedicates itself in the same way Utah did, we could become a Stanford or a MIT — it’s a question of will. I don’t want to say we’ll be Harvard or Stanford or MIT — we want to be what this region wants us to be. We’re in a unique city that is an icon for entrepreneurial approaches to creating the greatest entertainment destination in the world. Our university needs to match that spirit.

What’s the backdrop — the role UNLV plays in the economy — and how does UNLV interact with the business community?

The local alumni of UNLV are 60,000 strong, maybe 70,000 in the valley, and we’re approaching 100,000 alumni in our 52-year history.

We’re a business, we’re a state-subsidized business. What do you get back from the $175 million this year that is being invested in us?

In Las Vegas, about 20 percent of our population has a higher education degree. In more prosperous regions there’s a higher percentage of higher education degrees.

Invariably the more higher ed degrees you have, the more diversified the economy is, the stronger the tax base is and the most recent recession has had less impact.

A highly educated workforce makes your economy more robust and buffers you from the effects of recession.

We’re a 50-year-old institution in a city that has been formed by immigrant populations — in a city that was formed with a very basic service economy where there wasn’t a strong value or need for higher education. We’re suffering the consequences of that.

Here in Las Vegas where we have first-generation, often economically challenged, often minority populations, the need for access to that higher education degree is truly an opportunity to change things.

Let’s talk about UNLV as a business. It employs 3,000 people. It has a billion-dollar-a-year economic impact.

It brings into this state from outside the state more than $300 million a year.

The return on the state’s $175 million investment is enormous.

Where do we get those dollars? From nonresidential students, and two-thirds of them pay full freight nonresidential tuition at $18,500 per year — that’s just the tuition.

Of course those students don’t just bring their tuition dollars. They buy cars, gas, groceries. The direct impact of that is $140 million per year — that’s raw dollars, not economic impact. That’s a pretty good business.

We also run a major entertainment venue, the Thomas & Mack Center. It’s the top-grossing college arena in the country. It’s perennially in the top 10 of all arenas in the country.

We bring about $100 million a year in federal funds — grants and contracts. Those dollars have the biggest economic multiplier you can ever imagine.

This interview first appeared in the current issue of VEGAS INC, a sister publication of the Sun. For the complete Neal Smatresk interview, go to VEGASINC.com.

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