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March 25, 2023

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Deal for $1 that upended Nevada’s education system has cost us dearly

In 2005, businessman Jim Rogers took control of the Nevada System of Higher Education. In exchange for his services, Rogers asked for $1 in annual compensation. Rogers’ offer did, however, come with a significant catch: the Board of Regents had to centralize authority in the chancellor’s position. Until then, the chancellor — and the college and university presidents — reported to the regents as equals.

Because the Legislature had long ago abdicated oversight of higher education to the regents, it needed the support of only seven regents to transform the chancellor’s position into the “CEO” of higher education in Nevada.

Supporting this highly centralized structure requires the state to allocate more money to the NSHE than four academic institutions it supports: the Desert Research Institute, Great Basin College, Nevada State College and Western Nevada College. Budget documents show the agency has 220 positions and, according to Transparent Nevada, salaries and benefits for NSHE staff increased from $15 million in 2012 to $16.2 million in 2015.

Soon after consolidating his authority, Rogers dismissed the presidents of UNR and UNLV and unified all higher education messaging and policy decisions within his office — effectively demoting campus presidents to branch managers whose job security depended upon fealty to the chancellor’s edicts. Campus presidents could no longer publicly advocate for their institutions, and public statements on issues related to funding or governance of higher education that didn’t parrot official NSHE policy became a fireable offense.

After Rogers’ departure, Daniel Klaich was promoted to chancellor. Klaich had been a regent before working as NSHE chief legal counsel and, under Rogers, executive vice chancellor.

During Klaich’s regime, decision-making and policy development were further centralized and efforts were made to thwart legislative interference. Time and again, the NSHE successfully removed the agency from bills requiring audits and pressured lawmakers to weaken or kill legislation seeking increased responsiveness to legislative prerogatives.

As legislators from both parties have stated, the NSHE’s lobbyists punctuated these interactions with threats of lawsuits based upon the laughable and preposterous claim that the NSHE is the “fourth branch of government.” Klaich & Co. repeatedly brushed off recommendations to limit the regents’ constitutional governance authority to the state university. As a result — and unlike the preponderance of higher education governance models around the country — Nevada’s community colleges also remain under NSHE administration.

How have these arrangements served Nevada?

The state remains a higher education bottom-dweller even though Nevada ranks high (17th in 2014) in per-student spending.

The NSHE provided little assistance in helping the diverse campuses of Southern Nevada secure Hispanic or Minority Serving Institution status.

At the height of the Great Recession, the NSHE failed to help its institutions secure our state’s expected share of billions of dollars in federal workforce-training grants, placing Nevada in the bottom tier of yet another list.

The NSHE’s unchecked bureaucratic power fostered a culture of distrust and outright hostility toward transparency. When forced to investigate Klaich’s machinations, regents responded with investigations that could best be characterized as feckless.

The NSHE’s legal counsel cleared the chancellor of plagiarizing a workforce-development report. At the sole direction of the chairman of the Board of Regents, the NSHE paid a lawyer $57,000 to whitewash the handling of a consultant report that Klaich buried. Regents tried to shield Klaich from outside criticism, advising him and his staff to simply write fewer emails in order to frustrate nosy reporters.

Eventually, the NSHE’s constant scandals — highlighted by the latest revelations that the agency undermined legislative efforts to bring transparency to funding higher education — could no longer be swept aside. With an increasingly larger and louder chorus calling for reform and the reality that Nevada could not enter what is being billed as the “Higher Education Session” for the Legislature in 2017 with a chancellor who has been so discredited, Klaich stepped down, effective June 2.

To be clear, Klaich’s departure did not result from any bold action by the regents. Instead, he chose to retire “for convenience” and will be paid the balance of his contract (roughly $350,000).

Klaich’s departure does, however, provide Nevada with the opportunity to dismantle the failed status quo. Regents can begin this process by rescinding the 2005 policy that centralized power with the chancellor.

Additionally, legislators and the governor should review the numerous consultant reports recommending that the state separate the governance, administration and funding of Nevada’s two- and four-year colleges from the state university.

Building from these recommendations, in 2014 the Lincy Institute developed a model of higher education reform integrating the two- and four-year campuses into the state’s economic development framework. Former Western Nevada College President Carol Lucey is working on bill draft language modeled on the state of Washington to provide local governance for these institutions.

More than 45 states long ago recognized that institutions offering workforce-development and certificate training should be separated from those granting M.D.s and Ph.D.s. It is time Nevada did the same.

David Damore is an associate professor of political science at UNLV and a nonresident fellow at the Brookings Institution.

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