Regents Hear Scenarios if Steep Budget Cuts are Mandated by Governor, Legislature

RENO – Those charged with overseeing Nevada’s system of higher education heard several scenarios today if the current state budget crisis requires cuts of 22 percent, from closing campuses to huge student fee increases to massive layoffs.
The theoretical scenarios, presented to the Board of Regents by Chancellor Dan Klaich, were intended to demonstrate the severity of the cuts that would be necessary if the system is forced to accept a $110 million budget cut in next fiscal year.
In his report to regents, Klaich said the cuts could be accommodated in several ways.The $110 million target could be reached by closing the College of Southern Nevada and the Nevada State College at Henderson.
The cuts could also be achieved by laying off 1,290 higher education employees or by raising student fees by nearly 50 percent.
“Students will be denied access; they will be slowed down; turned away,” Klaich said.
None of these options are manageable, but Klaich told regents they help convey the severity of the situation Nevada’s higher education is facing because of the state’s continued economic downturn.
Some combination, including campus consolidation, student fee increases and layoffs or paycuts, could become part of a final higher education budget reduction plan.
Regent Mark Alden, who attended the meeting in Las Vegas with most regents, did not offer any comment during the discussion. But in a phone interview afterwards, he said the budget could be balanced without the great disruptions discussed during the meeting.
“The state college is the best thing they’ve got,” Alden said. “What we should do is cap enrollment at the universities and move all undergrad teaching and nursing courses to the community colleges and state college.”
Alden said that move would make up about a third of the shortfall. Then, all salaries and payroll should be cut by 10 percent to 15 percent to make up the remainder of the required reductions, he said.
“It would solve the problem, but no one wants to do it,” Alden said. “I don’t know why.”
The Nevada System of Higher Education would also see a $37 million cut in funding this fiscal year starting March 1 under the 22 percent cut scenario.
The actual level of cuts that will be required in higher education, as well as the rest of state government, remains a work in progress. Gov. Jim Gibbons is reviewing his options, and is expected to present a plan of action at a special state of the state address on Monday. He will also call the Legislature into special session to deal with the crisis, likely later this month.
State lawmakers have scheduled a number of meetings with their own fiscal staff and state agency leaders to go over options. They have also scheduled a number of public meetings to hear from the public on ideas to balance the budget.
Klaich was scheduled to meet with legislative leaders later today to go over what the budget cuts would mean to higher education.
The state is facing a shortfall estimated at between $900 million and $1 billion over the remainder of this fiscal year and next. Most of the shortfall is the result of tax revenues coming in much lower than projected when the Legislature adopted a two-year budget last year. Increased Medicaid caseloads that must be paid for are adding to the overall budget dilemma.
The cuts expected to be required to balance the budget will likely hit every area of state government and include public education as well.
Gibbons said he is considering layoffs, the shutdown of programs and other drastic measures to balance the budget.
Regents appeared inclined to support the idea that any cuts should be implemented by campus presidents, allowing for maximum flexibility.
Regent Michael Wixom said only that campus cuts should be accomplished in such a way as to ensure no serious issues arise as to equity among the various colleges.
Regents will await action by Gibbons and the Legislature before taking action to implement any budget cuts. The board is scheduled to meet March 4 and 5 in Southern Nevada where final decisions are expected to be made.

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