Request to be over budget

Two years ago, facing a demand from the governor for budget cuts, the state's higher education leaders instead asked for more money.

They're ready to do it again next week.

The higher education chancellor has submitted a budget for Board of Regents approval with a request for almost 25 percent more tax money than the current two-year budget. The board is scheduled to vote on the request at a special meeting set for Aug. 27.

"I'm serious with this request," said Dan Klaich, the chancellor. "I understand that it's a stretch. But I don't think this is a time that we can be timid or that we can give up before the fight is engaged."

The budget request includes eliminating state-mandated furloughs and restoring pay raises, as the governor's office asked. It does not, however, comply with Gov. Jim Gibbons' request for 10 percent cuts.

In total, the higher ed system is asking for $1.19 billion from the state for the 2011-2013 biennium, a 24.7 percent increase from $956 million in the current two-year budget. Overall, if the budget request were approved, the system's total budget including tuition and other funding would be $1.65 billion for the next two years, an increase of $51 million, or 3.2 percent, over the current budget.

The reason the request for state tax money is 25 percent higher while the total budget would be only 3 percent higher is that the system got nearly $200 million in federal stimulus funding in the last budget cycle and is expecting none this time.

Typically, state funding accounts for 70 percent of the higher ed budget, with tuition, fees, grants, athletic events and other sources making up the rest.

Board Chairman James Dean Leavitt backed Klaich's stand.

"That's money we need to educate current and future Nevadans," Leavitt said. "We're not apologizing for that request."

Leavitt would not speculate on the chances that the system would actually get the money it plans to ask for.

"I don't want to speak for the Legislature," he said. "But I'm optimistic."

The reality is that this budget, whether or not it is approved by the Regents, will almost surely never see the light of day. State tax revenues are expected to fall some $3 billion short, more than 40 percent, in the next two years from where they were in the past two years. Those revenues already were down over the previous budget cycle.

If those predictions turn out to be accurate, the state could eliminate all spending except on education and still be short of where it was two years ago.

State agencies must submit budgets to the governor by Sept. 1, despite not knowing for sure what the state's revenues will be in the next budget cycle.

Klaich contends that complying with the governor's requested 10 percent cuts would be an exercise in futility.

Without new taxes, a 10-percent revenue shortfall is highly unlikely. If the governor had asked for 40 percent cuts, Klaich said, that would be something realistic to plan for.

"I see no point in going through a series of exercises in hypothetical budget cutting," he said.

The extra money the higher ed system asked for in the last budget cycle never came. In fact, Gibbons proposed a 36 percent cut, and lawmakers ultimately cut the budget by 12 percent, thanks largely to the stimulus funds and temporary taxes that won't be in effect next year. A further cut of 10 percent followed in a special legislative session.

The cuts have led to a smaller selection of classes at all seven colleges and universities, and, at the two universities, the elimination of departments and the implementation of layoffs.

Higher education backers contend that more budget cuts to the system would hurt the state in the long run. They say higher education is one of the keys to bring the state out of the economic doldrums.

"We're talking about the type of state we want to build and the critical nature of education to our economy," Klaich said.

"This is not self-serving," he insisted, referring to the requested increase. "This is about restructuring our state."

Contact reporter Richard Lake at rlake@
reviewjournal.com or 702-383-0307.