NEVADA VIEWS: Higher education funding
In the last legislative session, I introduced Senate Bill 374, which created the Committee to Study the Funding of Higher Education. This legislation was motivated by a desire to bring to an end the inequities that have long plagued the Nevada System of Higher Education. Quite simply, the current process for funding higher education is fundamentally flawed in a number of ways:
1. The formula lacks transparency. When I first began asking questions about the formula, even experts were confused about how it worked, and the numerous studies and reports analyzing the formula and its murky matrix all produced different interpretations that invariably supported the self-interest of the authors. As a consequence, there is little trust and accountability concerning how higher education funds are administrated.
2. The formula ignores inputs. By considering only allocations, the formula centralizes and redistributes the fees and tuition raised by individual institutions (the bulk of which are generated at UNLV and the College of Southern Nevada). As a consequence, nurses training at CSN subsidize the education of doctors attending the state's lone medical school. The sons and daughters of Southern Nevada, many of them minorities who are the first in their families to pursue a college degree and whose parents' labor produces well more than 80 percent of the state's revenue, foot the bill for Californians attending UNR at in-state rates.
3. The formula fails to recognize or reward market needs. The William F. Harrah College of Hotel Administration at UNLV generates revenue equivalent to what it receives in state appropriates. Instead of reinvesting in such a key asset, this money is used to subsidize the "economy of scale" deficits that result in more per-student state dollars being appropriated to northern community colleges than UNLV. The formula not only ignores, but discourages our Legislature's goal of prompting self-sufficiency and entrepreneurialism in state government and higher education.
4. The formula perpetuates bad governance. The market for higher education is in Southern Nevada, home to three-quarters of all Nevadans. Yet, because of funding inequities, the system lacks capacity to serve this population. Failure to provide adequate access to higher education in the state's economic engine is unilateral economic disarmament. As a recent Brookings/SRI report makes clear, realigning and expanding the capacity of state institutions is necessary if Nevada is to compete economically with our regional neighbors. Reforming the funding structure for higher education is an important first step in this process.
The draft reform proposal authored by university system Chancellor Daniel Klaich, which would allow institutions to keep their tuition and recognizes institutional mission differences, is a useful starting point. I am heartened that officials now recognize the inadequacies and unfairness of the old formula.
I also understand, however, why many people question whether those responsible for creating and protecting the existing formula are capable of approaching reform in a neutral manner or are willing to repair the damage done by the old formula.
Institutions that have used the inequities in the old formula to out-build their underfunded sister institutions cannot be allowed to use past largess to justify claims to future appropriations. Rather, as the committee continues its work, it must ensure that all institutions are competing on an even playing field and that the market determines winners and losers; not legislators or bureaucrats with their thumbs on the scale.
As Gov. Brian Sandoval and legislative leaders of both parties have made clear, priority No. 1 for the state of Nevada is economic diversification. Higher education will play a crucial role in this process, provided that all Nevadans have access to the education necessary to pursue their dreams and help to lift the state out of its economic malaise. This cannot be accomplished with a formula that takes from the many to subsidize the education of the few.
No doubt, the guardians of the status quo will try to water down the reform process by claiming it is an unfair money grab. Some will no doubt assert these efforts are cover for tax increases.
Such hyperbole is misguided. I am not asking for taxes to be raised, only to ensure that the distribution of existing resources is done in a fair manner that results in the greatest benefit for all Nevadans.
John Lee, a Democrat, represents Clark County District 1 in the Nevada Senate.
