Whats going on with the NSHE budget?

With another student rally to show support for Higher Education funding to be held tonight (Thursday March 26) at 6pm on the academic mall at UNLV, its worth noting that the NSHE budget issue is not really a matter of those "for" or "against" higher education but a more subtle reality, a game of three-dimensional chess. I've largely avoided the macro-budget issue to focus on faculty compensation and benefits issues, but its worth keeping in mind the bigger picture for our institution and System is by no means clear.

Almost all serious voices in the state have agreed that the Governor's Executive Budget, proposed in January, makes unacceptably deep cuts to the System budget (about 37%) and to the UNLV allocation from the General Fund (about 52%). Whats always been the issue is not if this would pass, but what the legislature would pass instead.

For a few weeks this spring, it appeared that the portion of the federal stimulus bill that makes aid for public higher education available to states would go a long way to filling the gap. This theory gained support when it became clear, with the passage of the federal stimulus bill, that the state would be required to restore funding for 2009 to at least a 2008 level and to budget for the next two fiscal years not to drop below that level. To avoid restoring this funding, Governor Gibbons sent a letter to the Department of Education seeking a waiver from those requirements -- so that the state would qualify for federal support without having to restore higher ed funding above a 2006 level (ie, an 18% cut). The System has opposed this request.

However, what happened at the Higher Ed joint subcomittee hearing last Friday appeared to come as a surprise to the representatives of the System -- the legislative leaders voiced support for the Governor's request for a waiver, so they would have greater flexibility to use federal stimulus money to plug other holes in the budget. The outcome of that hearing was that the System must now prepare a budget at 2006 funding levels. (Update: The outline of that budget was released today; for UNLV it would mean an estimated loss of over 200 faculty positions, over 2000 course sections, over 6000 students, and severe cuts to staff and operations.)

However, we learn today from the Reno Gazette-Journal that because the Governor's Executive Budget is the working blueprint for the state's eventual budgt, thats the basis for an evaluation of the waiver request -- and under the guidelines being developed by the Department of Education, Nevada may not get a waiver.

In that case, the legislature would have two choices -- to restore NSHE funding by at least $235 million to qualify for federal stimulus education aid (of which the state's share is expected to be $400 million) or draft a state education budget without federal education stimulus support.

A second point of contention between the System and UNLV has been over whether it can specify to legislators the potential impact of a prospective budget. At Friday's hearing, one of the key moments for faculty will be when the legislature asks the System, and presumably institution presidents, to lay out specifics for a budget at 2006 level. Unlike other agency heads in the state government, the Chancellor or University president cannot simply dictate which areas to cut if those cuts involved termination of programs or positions; those decisions must be made in consultation with faculty and in a process consistent with the NSHE code (and the UNLV administration to its credit has thus far shown every indication of doing so if such cuts must be made).

Legislative leaders familiar with higher education ought to recognize that principle in their working session on the budget.

Update (March 27): Today's "work session" of the Higher Ed joint subcommittee appeared to be inconclusive, though there was considerable discussion of the funding disparities that might result among institutions if the current NSHE formula is used to distribute a General Fund allocation at 2006 levels. It does appear that legislative leaders do not want this formula to be applied in the context of cuts if it would have such disparate impact on certain institutions (including UNLV).

At the general level, the Chancellor and Vice-Chancellor testified on behalf of the System
and agreed to support the legislature's support for a request from the federal Department of Education for a waiver of requirements to receive federal stimulus dollars. But the Chancellor continued to insist that the Systme cannot establish a budget until they know the amount of funding that will be available from the state, and legislative leaders continued to insist they cannot determine a level of funding until the System identifies its needs to fulfill its "core mission."

Finally, and perhaps ominously (or perhaps strategically effective), Vice-Chancellor Dan Klaich clarified his remarks of a week ago about the imact of a budget at 2006 levels on faculty. It had been reported that he had said such a budget would not result in layoffs of faculty, but he clarified that this would only be the case if federal stimulus dollars were added on to a 2006-level allocation. At a level of a 2006 allocation, the consequences would be dire.