University system addresses budget

Rumors of the state higher education system’s demise have been greatly exaggerated.

For months, Chancellor Jim Rogers complained that any reductions in the budgets of Nevada’s public universities and colleges would have disastrous consequences, for students and institutions now and businesses and the economy down the road. He warned that campuses would be closed, instructors laid off and classes eliminated. At one point, Mr. Rogers flatly refused to help Gov. Jim Gibbons identify places where system spending could be trimmed.

On Thursday, the university system released its plan to cut spending by 4.5 percent, and none of those dire predictions was realized. The entire proposal, which could be approved by the Board of Regents at a special meeting Monday, appears to be nothing short of reasonable.

Instead of academic Armageddon, higher education, like every other state agency, will suck in its belly and tighten its belt. And students, whose tuition is heavily subsidized by taxpayers, likely will have to cover a slightly greater share of their educational expenses through increased fees.

Among the notable sacrifices made by the state’s universities and colleges: reducing faculty merit pay raises by half.

“The changes being made are not cosmetic,” said Mr. Rogers, who favors tax increases as a solution to the state’s looming budget deficit. “I think the system … had tremendous momentum going forward. This will be a shock to that momentum. This will hurt the whole system.”

It’s worth noting here that Mr. Rogers’ shrillest cries followed Gov. Gibbons’ request for recommendations on cuts of 8 percent while leaving the K-12 and public safety spending plans intact. In the back and forth that followed, Gov. Gibbons modified his plan, leaving no part of state government exempt from cuts. Mr. Rogers’ rhetoric cooled when it became clear the system wouldn’t have to trim as much.

But even if the system were forced to adhere to Gov. Gibbons’ initial plan, its total funding still would have been higher than during the previous biennium. And now that its targeted budget reductions will amount to only 4 percent, every institution is realizing healthy funding gains despite flat enrollment and stagnant state revenue growth.

The university system did indeed have “tremendous momentum going forward.” That’s because its budget was growing at an unsustainable rate. The tax increases of 2003 brought a significant boost in funding, and the 2005 Legislature was extremely generous, committing more than $150 million for new campus buildings — and all the operational and maintenance expenses that come with them. In 2007, nearly $200 million more was set aside for higher education construction projects, including $90 million for the Health Sciences System. All the while, salaries were rising and programs were expanding. All these outlays were handed out when the state treasury was flush.

Now most every system institution is being compelled to divert maintenance funds into their operating budgets. Building and classroom upgrades will be delayed. UNLV might be forced to reduce the budgets of two buildings still under construction.

Meanwhile, faculty members will still see their pay increase by a few thousand dollars, amounts most private-sector workers can only dream of, given current economic conditions.

To help cover those increased costs and offset other reductions, the University of Nevada, Reno, wants to increase tuition by $5 per credit. The College of Southern Nevada wants to increase tuition $4.50 per credit. These are modest proposals.

“The fact is, tuition in the state of Nevada is just outrageously low,” Mr. Rogers said. “I think students are going to have to be accustomed to higher tuition.” Indeed, it is sensible to ask students, the most direct beneficiaries of about $800 million per year in university system spending, to assume a greater stake in their education.

Once the Board of Regents, the governor and the Legislature’s Interim Finance Committee finalize the $57 million in savings, the effect on the state’s colleges and universities will be minimal.