Chancellor says budget cuts threaten education system

CARSON CITY -- Nevada's colleges and universities face "staggering" cuts that threaten to undermine the state's beleaguered education system, Dan Klaich, chancellor of the Nevada System of Higher Education, told state legislators Thursday morning.

Klaich said a proposal by Gov. Brian Sandoval to cut state general fund money for higher education by $162.4 million, ratcheting revenue back to $395 million in 2013 and returning funding to 2003 levels despite a 30 percent increase in enrollment since then.

Klaich testified before the Legislative Commission's budget subcommittee to legislators seeking to understand the potential human and economic cost of enacting Sandoval's proposed $5.8 billion budget for the biennium, based on the governor's promise not to raise taxes.

For colleges and universities, slicing away another $162 million translates to a 73 percent tuition increase, 1,850 jobs, widespread elimination of academic programs and institutions, or some combination of those choices.

"I don't care how you do the math, these are staggering numbers" Klaich said.

The $162.4 million figure is the difference between current general fund support of $557.9 million in fiscal year 2011 for Nevada's eight colleges and universities and Sandoval's proposed general fund outlay of $334.7 million in 2013, plus another $60.8 million in property tax diversions from Washoe and Clark counties, which would go to University of Nevada, Reno and University of Nevada, Las Vegas or community colleges.

Klaich walked legislators through a 155-page document that detailed funding and enrollment trends and how the cuts might affect the quality of education.

The document highlighted proposed 5 percent pay cuts for employees, health insurance benefit reductions and the elimination of retirement health benefits for new workers.

During previous rounds of cuts, tenured faculty were protected from the imposition of furlough days. Last year the Board of Regents changed governing rules to make it possible to apply Sandoval's salary cuts across the board.

"Things like this severely impact our ability to recruit and retain the best faculty," Klaich said. Later, he added: "Our best, most entrepreneurial faculty are up for plucking right now."

Afterward, Sandoval senior advisor Dale Erquiaga said Klaich "glossed over" the property tax diversion, which he said represents the first time in Nevada history such a revenue stream has been dedicated to higher education.

Erquiaga said the property tax diversion coupled with Sandoval's proposal to give colleges and universities more autonomy to set tuition and fee rates and spending priorities will benefit the system over the long haul.

"For us the reform in education goes hand-in-hand with the unfortunate budget situation," Erquiaga said. "We recognize you just can't take that money out of the education system. You have to change the system as well."

Erquiaga said Sandoval would support the flexibility measures Klaich mentioned during the meeting such as giving the higher education system authority to transfer funds between accounts.

He disputed characterizations of the proposed cuts as evidence Sandoval is unwilling to invest in education as a means to improve the economy.

"We only have so much money," Erquiaga said. "To try to raise additional money through taxes will only make the economy worse. "

Senate Majority Leader Steven Horsford, D-Las Vegas, has vowed to fight against major education cuts Sandoval has proposed. "What would be the incentive for students in state or out of state to choose UNR or UNLV?" if such drastic cuts are imposed, he said.

After the meeting Horsford was asked whether the $5.8 billion in spending Sandoval proposed over the next two years was adequate to cover education and pay for the increased demand on social services.

"I don't believe that it is," Horsford said, suggesting higher taxes or some form of new revenue is in order. "What we can't do is expect improved results when you are gutting education at the level proposed by the governor."

Sen. Ben Kieckhefer, R-Reno, who is on the Education Committee worried about the grim picture Klaich painted.

"I'm worried we are not making the investment needed to ensure there are options for people who want to become well trained (members) of our new work force," he said.

Kieckhefer is considered a moderate and potentially one of three GOP senators who could help Horsford get the 14 votes needed for a tax increase. But Kieckhefer said he thinks there is enough existing revenue to support education.

Contact Benjamin Spillman at bspillman@review or 775-687-3900.