Change for sake of change not enough

The Nevada System of Higher Education is proposing a new formula to fund higher education in the state. The method by which we fund our universities and colleges means a great deal for job creation, economic development and the long-term future of Southern Nevada.

Our economy depends on higher education to produce the workforce, the research and the innovation it needs to thrive. We need to have a full, honest, fact-based conversation during the 2013 Legislature about the best way to achieve these goals.

Nevada has changed — let’s admit it and reform public policies to reflect it. In the past 30 years, there has been a dramatic demographic and economic shift in our state. Southern Nevada is now a diverse metropolitan area of 2 million people with 70 percent of the state’s population. It is the economic driver of the state, and all Nevadans depend on the health of its economy.

Given these dramatic shifts, are we building a mechanism to fairly fund schools at appropriate levels to produce the innovation we need to drive Nevada into the 21st-century global economy?

The existing formula used to fund each of the seven higher education institutions in Nevada has its roots in policies established in the 1960s. Higher education receives support from the state’s general fund through a formula based on enrollments without regard to whether an institution produces college graduates, conducts research or improves program quality. The formula has not recognized differences in costs across different types of institutions, whether a research university, state college or community college. Nor has the formula recognized the different roles each type of institution plays in providing post-secondary education to meet workforce needs.

Recognizing a new approach was needed, the 2011 Legislature rightly established the Committee to Study the Funding of Higher Education to examine higher education funding structures, best practices in other states, alignment with economic development objectives and to make recommendations to the current Legislature.

I was honored to serve on this committee as a longtime resident and member of the Southern Nevada business community.

We spent 10 months focused on these important objectives. After issuing a request for proposals, the committee voted to commission an independent study by SRI International, the same firm that partnered with the Brookings Institution to develop a framework for Nevada’s economic development plan.

The SRI study made several recommendations on criteria for constructing a new funding formula based on best practices from other states. It called for aligning higher education funding to economic development goals and performance measures to create the outcomes our economy needs to grow.

SRI suggested a funding model based on the number of course completions and performance, the purpose being to motivate institutional behavior to increase degree productivity and encourage student enrollment based on preparedness rather than head count.

It recommended Nevada conduct its own study of the cost of delivery for each discipline at each level so future funding would be based on Nevada-specific data rather than extrapolations from other states.

These are all solid objectives, but the question remains: Is the new funding formula being proposed by the Nevada System of Higher Education structured correctly to further these objectives and get the results that we need?

Do we know what the long-term impacts of the proposed funding formula mean to each of the higher education institutions, and whether funding reflects Nevada-specific costs of delivering programs?

Do we know if our Southern Nevada institutions will gain the resources needed this year — and in subsequent years — to produce the educational outcomes we desperately need to align with economic development goals and compete in a global economy?

Do we know if the formula is structured to produce workers for Southern Nevada fields that need them?

Do we know what types of higher education expenditures are funded outside the formula and why, and how they impact overall budgets and funding outcomes for each institution?

These policy questions remain largely unanswered. They deserve full public discussion based on information and data before the higher education budget is approved.

We exist in a global economy with lots of competition. We need our universities to do research, spur entrepreneurial innovation and produce top-level graduates who can feed into growing industries.

We need a community college system that can respond to the needs of a changing economy and train workers for the future.

The cynical side of me suspects we are merely re-arranging the deck chairs to maintain the status quo, barely tweaking the edges. We need wholesale, substantive, data-driven change. We owe it to our students who take on college debt and have dreams to fulfill. We owe it the workers desperately seeking marketable skills to escape the gravity of a challenging economy. And we owe it to taxpayers who ask for transparency, accountability and results.

Let’s do the right thing. Let’s fully evaluate the policy and the formula upon which we are basing higher education funding and determine whether it serves the true needs of our state and allows us to grow and compete in a rapidly changing global economy.

Hugh Anderson is managing director and partner in HighTower and chairman of the Las Vegas Metro Chamber of Commerce Government Affairs Committee.