Regents to explore impact of cuts planned by Legislature before taking steps to respond

The higher education system’s Board of Regents could have raised tuition Thursday, but it did not.

Regents didn’t take any action on salary cuts or declare a financial emergency, either, though all of those were discussed at a special meeting to respond to budget cuts that came down from the Legislature late Tuesday.

It is likely the tuition increase will happen soon, anyway. Regents, lawmakers, administrators and students have all said publicly that increases are inevitable.

But first, a Swat team must be formed.

Dan Klaich, the system’s vice chancellor, told regents that he and his staff want to study the budget cuts issue before the board acts. They want to talk with university and college presidents about how much of a tuition increase they think their students can handle. They want to research policies on salaries and contracts, and they want to see what rules, if any, might be changed to make handling the cuts easier.

“We don’t even know all the questions yet, let alone all the answers,” Klaich said.

He said he wanted to form a group of people, including faculty, human resources experts, lawyers and administrators, to figure things out. He called it a group. He called it a committee. He called it a Swat team, which seemed to be the name that stuck.

Key legislators agreed to cut the system’s state-supported budget by 12.5 percent when compared to what it was supposed to get in 2007. That cut will become official if the full Legislature agrees and then overrides an expected veto from Gov. Jim Gibbons.

In reality, the cut will be smaller when compared to current, actual spending. Though with expenses and enrollment rising, higher ed leaders say any cut is hard to handle.

To help, the tuition increase is being considered. Tuition already will be going up 5 percent this year and 5 percent next year; Regents voted last year to impose those increases. But they’re expected to increase it another 5 percent or so for each of the next two years to help bridge the gap between what they believe the system needs and what the state is willing to pay.

Regents seemed hesitant Thursday to enact the increase just yet, however, as the full Legislature has yet to act, and Regents are unsure how the increases would affect each institution. So they let Klaich know that they’ll be depending on his team’s feedback.

There is some urgency to the issue, as well. Students are already registering for fall classes and do not yet know what it will cost them.

At issue is not only tuition.

There was a good bit of talk Thursday about the system declaring “financial exigency,” which some people likened to bankruptcy. It would basically mean the system would publicly declare it is so broke it cannot pay its bills.

Although it is not exactly the same as bankruptcy, such a declaration would allow the system to rewrite contracts with some employees, the system’s counsel, Bart Patterson, told regents. But the downside would be awful, he and others said. A declaration would ruin the system’s reputation and send a terrible message, Chancellor Jim Rogers said. Most regents seemed to agree.

“Besides the message it would send, Mr. Chancellor, it’s not true,” said Regent Dorothy Gallagher. “So let’s not do that.”

There is concern that some employees will be getting state-mandated salary cuts of 4.6 percent and others have contracts that do not allow salary cuts.

Classified employees, such as janitors and support staff, are state employees and will have their salaries cut, an action mandated by the Legislature. Professional employees and faculty will not, as they are higher ed system employees and under contracts.

It is impossible to make changes, officials said, to the pay of tenured faculty unless there is an issue with their performance. The only way to do so for professional staffers is to give them one year’s notice. If regents are going to do that, they must do it by June 30, the end of the current fiscal year.

The Board of Regents will meet again June 18 and 19.

Contact reporter Richard Lake at rlake @reviewjournal.com or 702-383-0307.