OVER THE PAST FEW MONTHS, the top story in Nevada higher education has been a battle over how much money would be cut from current budgets to make up for slumping state revenues. The governor's office and higher education officials parried back and forth over the final numbers and the potential impacts.
In January, 51³Ô¹ÏºÚÁÏ developed a plan to give back $18.1 million (on top of a $14 million cut it took when the budget was established for this biennium). The university tabled much needed new programs to improve student retention, delayed employee merit raises by six months, postponed classroom technology upgrades, and now plans to open new buildings this fall with scaled-back furnishings.
Still, "that budget battle was a skirmish compared to the coming war we face," says Gerry Bomotti, senior vice president for finance and business.
At presstime, new projections showed that further cuts may be on the horizon for 2008-09. And then there's what looms for 51³Ô¹ÏºÚÁÏ in the 2010-2011 fiscal years. Administrators believe the university's state funding will drop another $44 million if the way allocations are made does not change somehow. What's more, after the latest cuts, there's little left to trim without disrupting the ability of students to graduate in a timely manner.
"All universities face the ups and downs of a state's economy -- that sort of thing an institution can weather," says 51³Ô¹ÏºÚÁÏ President David Ashley. "What I am worried about is the cumulative impact of the past cuts and the extraordinary challenge we see coming."
So how did 51³Ô¹ÏºÚÁÏ get in such a precarious position?
Enrollment Dropped, But That's a Good Thing
Just a few years ago, legislators must have felt that 51³Ô¹ÏºÚÁÏ was like an adolescent who outgrew his jeans as soon as he got them. With enrollments jumping year after year, the university couldn't add class sections, hire faculty, or build lecture halls fast enough. Between 1996 and 2005, 51³Ô¹ÏºÚÁÏ's student body grew 43 percent, or more than 8,300 students.
Community leaders wanted 51³Ô¹ÏºÚÁÏ to grow, but in a less literal sense. They envisioned a transformation from a solid teaching university into an advanced research university -- the same kind of institution that the best high school students left the state to attend. They also recognized that a valuable community resource was missing from Southern Nevada. As a research institution, 51³Ô¹ÏºÚÁÏ could play a greater role in solving the region's social and scientific challenges. 51³Ô¹ÏºÚÁÏ could fulfill demand for a highly qualified professional workforce. And it could help diversify the economy.
Higher education officials and legislators realized 51³Ô¹ÏºÚÁÏ's growth had to be slowed, and it needed to become a more selective institution. They put in place a few policies intended to do both:
Nevada State College -- This four-year teaching college opened in 2002 and now serves 2,200 students. Its opening created a three-tiered higher education system with the community colleges, the state college, and Nevada's two research universities. With this greater capacity to serve all types of students, 51³Ô¹ÏºÚÁÏ and UNR would be able to elevate their research and graduate studies programs. But NSC clearly has a much greater impact on 51³Ô¹ÏºÚÁÏ's enrollment than on UNR's, Bomotti notes.
Remedial courses -- In fiscal year 2007, the Legislature eliminated funding at 51³Ô¹ÏºÚÁÏ and UNR for remedial courses. Providing the courses at a community college was more appropriate to the community college mission and more cost effective for the system, but reduced the enrollments at both universities.
Elevated admissions standards -- Studies show that students with lower GPAs achieve greater success in higher education by starting at a community or state college. The high school grade point average for incoming 51³Ô¹ÏºÚÁÏ and UNR freshman has increased from an unweighted 2.5 in 2005, to 2.75 in 2006. This fall's incoming class has to meet a 3.0 GPA that is weighted in a core curriculum and correlates to about a 3.25 overall.
These three changes were intended to allow 51³Ô¹ÏºÚÁÏ and UNR to raise academic standards and provide a more challenging experience to students ready for university-level work. "These policies did exactly what they were supposed to do," Ashley says. "51³Ô¹ÏºÚÁÏ stopped growing for growth's sake, and we are getting a better-prepared student body. Now we are elevating the expectations for our undergraduates and rising as a research institution."
ALL SOURCES FOR 51³Ô¹ÏºÚÁÏ FUNDING
51³Ô¹ÏºÚÁÏ gets funding from a variety of sources, but the single biggest contributor is the state general fund. Slumping tax revenues have caused the general fund to come up short this year.
HOW 51³Ô¹ÏºÚÁÏ SPENDS STATE MONEY
Seventy-seven percent of the state dollars 51³Ô¹ÏºÚÁÏ collects go toward salaries and benefits, leaving few ways for the university to cut state-funded expenses.
The Problem with Success
The state's funding formula for higher education is based primarily on enrollment. Flat out: fewer students, fewer dollars. When the admissions requirements changed and Nevada State opened, no one adjusted the way the universities get state dollars.
Compounding the problem is the shifting composition of the student body. 51³Ô¹ÏºÚÁÏ's undergraduate enrollment grew just 1.4 percent between 2003 and 2007, but graduate enrollments increased 46.2 percent. Graduate education is both more labor- and cost-intensive.
Although the state's formula does account for the differences between classes at universities and community colleges, the rates are still well off of national benchmarks. Texas has become a model for several other state funding formulas. There, the more cost-intensive doctoral programs receive 22.7 times the amount of funding than the lowest cost four-year undergraduate class does. In the Nevada system, which includes community colleges, the multiplier is just 3.6.
The short of it is that 51³Ô¹ÏºÚÁÏ and UNR must try to achieve research-based instruction on a budget more appropriate to a teaching institution. "I don't believe anyone intended to create a situation in which 51³Ô¹ÏºÚÁÏ would accept the most well-prepared students and promise them the more intensive educational experience that a research university offers, and then provide them with substantially less support to ensure their success," Ashley says. "But that is exactly what is happening."
What To Do
With state revenues down, 51³Ô¹ÏºÚÁÏ obviously isn't going to get the boost to its budget that past studies have recommended (a 2005 legislative report called for a base budget increase of at least $25 million to make up for the disparity between 51³Ô¹ÏºÚÁÏ's funding and its mission). In the short term, officials simply hope to maintain current student services. To accomplish that, it will do more than go hatin- hand to legislators.
Shift money to the priorities -- Even before the last round of cuts, the administration took steps to reallocate funds. "In times of explosive growth, institutions typically spread out as they find their general direction," says Neal Smatresk, the top administrator over academics. "In time, that leaves all the new programs with not quite enough money to excel."
This spring 51³Ô¹ÏºÚÁÏ is finalizing a new strategic plan, called Focus: 50 to 100, which will more narrowly define the university's priorities. Funding, Smatresk says, will be preferentially directed to those priorities. Administrators also adopted an informal policy to not launch any new degree programs without cutting a low-demand one.
Improve retention -- 51³Ô¹ÏºÚÁÏ is near the bottom among its peers in degree completion. "From a practical standpoint, it costs less to have a student continue toward graduation than it does to bring in a new one," Ashley says. "But more to the point, I believe it is our responsibility to ensure that, once students are here, we do everything we can to ensure they successfully obtain that degree. That will pay off for 51³Ô¹ÏºÚÁÏ both literally and figuratively."
The stricter admissions standards are a first step in improving retention. Now, administrators are developing ways to encourage full-time attendance, which is tied to higher graduation rates. And they hope to create a center for first-year students. "We believe this will lead to higher graduation rates, which will contribute to a sustainable enrollment growth of about 2 percent," Smatresk says.
Keep more of what the students pay -- 51³Ô¹ÏºÚÁÏ has always been a relative bargain for students. Tuition and most fees, however, go into the state's general fund and come back to 51³Ô¹ÏºÚÁÏ via the funding formula. So, although increasing the amount that students pay can alleviate the burden on the general fund, it does not necessarily increase 51³Ô¹ÏºÚÁÏ's funding. Indeed, registration fees are increasing 23 percent for undergraduates and a whopping 32 percent for graduate students this biennium over the last biennium, but 51³Ô¹ÏºÚÁÏ's state budget is still dropping. The result is that students are paying a much higher rate but receiving fewer services.
Administrators are proposing that the current amount (plus inflationary increases) generated by student fees go to the general fund under the same formula as in the past, but any increases above inflation be fully invested in programs and services benefitting students. These funds would be specifically for studentsupport programs and financial aid.
"We must recognize that many of our students are price-sensitive," Ashley says. "Increasing costs, without providing more support, may price them out of higher education. Moreover, while we recognize that the amount students contribute toward their education must increase, I do not think it is unreasonable for them to expect better services from us as well."
And the Problem with Not Succeeding
If 51³Ô¹ÏºÚÁÏ does have to take further hits in its next budget, the options of where to cut are limited. More than three-quarters of state dollars go toward employee salaries and benefits with an additional 9 percent for such fixed costs as utilities and insurance.
The scenarios are not pretty. Cutting all part-time faculty (more than 800 instructors) and 12 percent of its full-time faculty (115 positions) would do the trick, but that would also eliminate more than 86,000 class seats each year. "We're not going to make it up by doing a little belt-tightening here and there. It would require a wholesale restructuring," Bomotti says.
That takes us back to the critical strategic planning 51³Ô¹ÏºÚÁÏ is finalizing this spring. Ashley concludes, "In these difficult budget scenarios, advancing our goals as a major research university will require a combination of significant restructuring, extraordinary efficiencies, and investment in our priorities. Our Focus: 50 to 100 strategic planning is essential for us to succeed."
