Nevada colleges to take hit now, more next year in wake of state budget crisis

CARSON CITY -- The Nevada System of Higher Education won't know before the end of April whether it must lay off professors and other staff members because of the 6.9 percent cut in state support that has emerged from the special legislative session.

Chancellor Dan Klaich said reduction--about $50 million over the next two years--will be discussed Thursday and Friday during the Board of Regents meeting in Las Vegas. He will request cuts be spread "proportionately" between the various colleges and universities.

He expects the presidents of each college and university will report back to the regents in April where they will make the reductions over the next 16 months.

Some programs will be eliminated and professors and staff members will be laid off, he said.

Support from state government is only about one-third of the money received by colleges and universities. When funds from all sources are counted, the reductions they face will be less than 4 percent of all sources of revenue between March and June 30, 2011.

While the $50 million reductions in state support are less than the $68 million proposed by Gov. Jim Gibbons, Klaich does not want faculty members and students "thinking everything is OK."

"We leave Carson City saying thank you Legislature, thank you governor, but the real cliff comes next February. That is when the tough decisions start."

When legislators return to Carson City for their next regular session in February 2011, the shortfall they face likely will be more than $3 billion unless the economy turns around,

While the legislators appear ready to cover the current $887 million revenue shortfall Sunday as they conclude a six-day special session, they've created a potentially greater problem for themselves next year.

Much of the current shortfall was covered by emptying state agency trust funds and taking federal funds. This money was used to keep state agencies from experiencing greater reductions over the next 16 months.

But there will be no more money available to grab from trust accounts or $1.5 billion federal stimulus funds to steal when legislators begin work next year on the next two-year state budget. Legislators also face a decision of whether to reauthorize $780 million in tax increases they approved in 2009. These tax increases expire on June 30, 2011.

So legislators in February will have to decide whether to make even deeper cuts, or to raise taxes at a time when the economy is still declining.

Senate Majority Leader Steven Horsford, D-Las Vegas, said Saturday that he intends to find a permanent fix in the form of a broad-based business tax or some other kind of plan to increase revenue. A study by Moody's on the state tax structure should be completed by July. That could form the basis for potential tax increases.

Because revenues may continue to fall shorter than some legislators want, Klaich said college presidents and administrators need to plan how they can continue to provide services with less money.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.