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Elliott Parker at UNR says the governor's podcast is misleading. Shocker:
Dear Governor Gibbons:
I just read the text of your podcast, and I am afraid that I must say it is misleading. You said that “Nevada spends more general fund tax dollars on higher education than most other states,” but this is not actually true.
A poor man spends a bigger portion of his income on food, but that does not mean that he eats more than others. Nevada’s higher education system gets a larger portion of its budget from the state, but that does not mean it spends more to educate its students. As a share of state GDP, Nevada has the smallest general fund in the country. Nevada is also 50th in the country in higher education spending as a share of state income, 50th in the country in the number of higher education employees as a share of population, at the bottom in the number of students who attend college, and below the national average in higher education spending per student, even though our cost of living is relatively high and smaller states typically spend more per student than big states.
You said that higher education has the ability to raise its own revenue, but this is misleading as well. It is true that our tuition is relatively low, and this has been a long-standing policy of the state as it tries to move up from the bottom in the number of students who attend college. The Regents can raise tuition, but if we tripled it next year we would not come close to filling the gap, as we would push out many of our students. Other revenues – like dormitory fees, tickets to sporting events, et cetera – go to pay expenses associated with those revenues, and do not generate substantial residuals. Research grants go to fund research expenses, and if we tried to spend those funds on instructional costs somebody would have to go to jail. Your budget would not increase those other revenues, but instead would decrease them. It will cost us our most productive researchers who bring in the most outside funding, it would scare away potential donors, and it will encourage our best students to go elsewhere.
You said that you are proposing only a 36% cut, not a 50% cut, but this is also somewhat misleading. Yes, there is a 36% cut in the total NSHE general fund budget, but some programs within NSHE are left relatively untouched. Athletics, for example, did not have its budget changed much at all. But the cuts you proposed for the main campuses of UNR and UNLV are much, much larger than the average for the system as a whole. Relative to our total state GDP, the cuts are tiny – roughly a quarter of one percent – but relative to the total amount the university has to spend on instruction, the cuts are simply devastating.
To survive and prosper in a knowledge economy, Nevada must better educate its citizens. Regardless of your political disagreements with our Chancellor, you must see that a good university system is crucial for our future.
Sincerely,
Elliott Parker
Professor of Economics
University of Nevada, Reno
Dear Professor,
Please ask your Chancellor or your your board of regents why the athletics department is untouched in your budget. The regents and the Chancellor control where the state's tax money gets spent. Actually, the Chancellor probably just tells his lap-dogs (the regents) what to do... none of the regents have the spine to stand up to the Chancellor.
Unfortunately, Dr. Parker, your treatise will fall on deaf ears. But those of us who pay attention appreciate your effort.
The Governor "cuts" are only a proposal for what the higher ed gets from state funds.
The Regents will determine if any decrease in revenue from the state actual becomes a cut and where the cuts will come from.
So if you have a beef about the athletics budget you should direct your complaint toward the Regents and not the Governor.
Those who cried about the Governor's proposal then how come they do not cry about a lack of courage from the Democratic state leadership.
The Democratic state leadership has offered no general outline for the budget much less a detailed one.
How are they going to make up for over the billion in cuts that they cry about?
Are they going to raise taxes over a billion?
If no, then where are they going cut hundreds of millions from?
Nance, I must give you credit. At least you have read Orwell and thus understand how to create a Ministry of Truth in Charge of Lying--that is, you have a talent for it. Gibbons just lies. But somehow both of you are helping the economy, or at least the aspirin industry--anyone could get a headache reading your logic.
It's called selective reading.
http://www.lasvegassun.com/news/2009/feb...
"The Democratic state leadership has offered no general outline for the budget much less a detailed one."
They don't have to. Any laws they pass will not go into effect until the next biennium. You're upset that the Legislature hasn't passed a budget four months early? What? And without all the relevant information? LOL!
I guess you weren't aware that negotiations are ongoing? Sheesh!
But yes, repeat all your drivel about how you are mad mad mad that Buckley hasn't given you a full budget yet. We haven't heard that a billion times before!
If you think that the "stimulus" make our children and grand children pay for state operations is going to make up for the $2 billion shortfall then you have a shock coming to you.
Our course you guys are OK with Buckley hiding the rock.
She has displayed zero courage.
"If you think that the "stimulus" make our children and grand children pay for state operations is going to make up for the $2 billion shortfall then you have a shock coming to you."
Oh, now it's 2 billion?
Wait, didn't you just write:
"How are they going to make up for over the billion in cuts that they cry about? Are they going to raise taxes over a billion?"
So is it a billion, or two billion? What do your tea leaves tell you? And what is my horoscope for tomorrow, while you are at it?
Is this like your wobbly predictions about Obama's budget deficit? One day it's 17 trillion, the next it's 12, the next it's 14. Every day you pulled a different number out of your... hat.
And you're also the one who constantly criticizes Reid for not bringing Nevada enough earmarks, and when called on that, you said that you thought we should do more to get us more money from the stimulus. Now you don't want money from the stimulus?
Do you have multiple personalities? I'm trying to see your big picture but you're constantly bickering with yourself.
You are lame.
The governor's budget includes tax increases and cuts that amount to over $2 billion.
If one wants no cuts and no tax increases then they need over $2 billion.
Errr... Wasn't it George Bush and the GOP congress a few years ago that kept telling us that deficit spending is okay because it's only a certain percentage of GDP yada yada yada?
I just wish conservatives would stick with their eternal "principles" more than two or three years at a time.
Nance has to be given credit for staying on message, if nothing else. One would almost consider him/her to be a sycophant follower and member of the "drank the kool-aid" Gibbonites, with your constant and never screeds against Buckley and any other D's, and abject refusal to recognize that something has to be done to stabilize how the state's budget is funded (note as well that it's just not D's that recognize that, but which of course you conveniently ignore in order to keep up the attack just on the D's). And I suppose as well that, like your tirades against the D's after all of 12 days of the 120 day session, that Raggio is now a coward and lacks leadership because he, too, has said that what your Luv Guv wants to do is and will be devastating to the State he has worked for over 30 years to make better, and particularly so with higher ed. Ed Goedhart must be your hero, Nance. Or perhaps Chuck Muth. Or worse, Sue Lowden.
Parker misleads too. He uses some pretty dubious stats himself, like the 50% cut in higher ed (completely misleading) while also making claims which can be proven false. Like states taking advantage of economy of scale - false.
His only points to make are, Nevada's taxes on residents are low, tax collection is moderate. But this in no way proves government is underfunded. He assumes this, making a fallacy in the process.
For example, you can't prove god exists by assuming god exists. This is exactly what Dr. Parker does.
Not to mention NSHE has seen appropriation increases that have been 3 times larger than the annual growth in inflation since 2001.
In 2007 the state appropriations to NSHE amounted to $13,000 per student!!!!!!!!!!!
"It will cost us our most productive researchers who bring in the most outside funding, it would scare away potential donors, and it will encourage our best students to go elsewhere."
Wait a minute Dr. Parker. Above you said that research grants can't be used for instructional purposes. Thus they aren't actually making money for the University that can be used to teach students.
So what is the point, besides a little contradiction?
Does anyone find KDR81's lack of accounting knowledge as troubling as I do? Well, makes for better reading the the funny papers I suppose.
In current US dollars, US spending on k-12 has more double on a per student basis since 1980's.
I am confident that higher ed is in the same boat.
I think the quality of education has been declining since 1960's in both higher ed and k-12.
Professor Parker replies:
Though I do try to read these blog comments, at least when the level of vitriol does not get too high, I don't usually reply to them. Mr. Nance, for example, has over 3800 blog entries listed in his Sun profile, so the chance I would get in the last word is pretty small, and debating him is a losing proposition. I do invite interested and objective readers to look up some of the material on my website (http://www.business.unr.edu/faculty/park...), including the data I have made available there.
KDR81 raises a good question about grant funding, however, that I would like to try to answer. It does seem on the surface that I contradicted myself. Perhaps an explanation is necessary for those who don't understand how grants work.
If faculty are able to win competitive grants, the university can do more. We can use that money to bring in graduate students on research assistantship, we can hire full-time researchers on so-called soft-money, and we can study problems to help address the problems of the state and its citizens. The School of Medicine brings in a large share of those grants, and uses them to fund research on disease prevention. They could not afford to do that without the grants. There are researchers all over campus doing amazing things that most citizens are completely unaware of.
Grants also have an "F&A" portion which we can use to help pay for operating costs of existing facilities, and which can help fund the building of new facilities. Being able to build new research facilities then also helps us bring in more researchers, who can help us attract more research funds, et cetera. We can also use research funds to buy out some instructional faculty from their teaching responsibilities.
We cannot, however, use a research grant to hire a lecturer, or to pay salaries of instructional faculty. It is illegal to misuse or reallocate funds in this way.
By funding research activities, the state gets more bang for its buck. It takes money to make money, as they say. It is completely sensible for the state to fund education and then ask for more bang for the buck, to provide incentives for faculty to compete for more research funds. It will take time, of course, and not every department can do it of course; an English professor is much less likely to get a research grant than a chemistry professor.
It is not sensible, however, to cut support and pretend that somehow other funds will pour in to replace it. It shows a complete lack of awareness of how things work. Donors, for example, don't contribute to a sinking ship.
[to be continued]
[continued from above]
On a related topic, did you know Nevada also ranks at or near the bottom, on a per-capita basis, of monies received from the federal government. Why? Because we don't put up the money to get the matching grants. Alaska, by contrast, receives the most, and it gets most of its matching funds from taxes on oil extraction. Mining in Nevada, however, pays roughly 1% of its gross proceeds to the state, while casinos pay around 7%.
Regarding Mr. Nance's assertions about higher education spending, let me direct readers to my letter to Regent Knecht on the same topic, which I just put on my website. There I say:
"You note that expenditures on higher education in the United States doubled, as a share of GDP, between 1960 and 1992, and then rose over the next decade by another 50 percent. I don't mean to quibble, but during the same period higher educational enrollments rose from roughly 3.6 million students to almost 15 million, a 2.6-fold rise as a share of population. The number of degrees conferred grew almost four-fold, relative to population, and the share of graduate degrees doubled. We spent more because we did a lot more.
"It is also worth noting, I think, that Nevada did not fit the pattern you observed for the rest of the country, at least not in its spending on higher education. The data I've collected only goes back to the mid-1980s, but the state-supported NSHE budget in 1985 was about 0.63 percent of our Gross State Product. By 2005, this had risen to only 0.65 percent, hardly what I would call unsustainable growth."
Finally, regarding the initial assertions on the athletics budget by both "skisailmtb40" and Mr. Nance, the Governor's budget proposed the cuts I mentioned, not the Regents. The Regents and the Legislature will probably not concur, and perhaps they will be able to overcome the Governor's likely veto. For UNR, it is a $70 million cut on a $140 million dollar allocation. For those who note that times are tough all over, consider that when private firms are laying people off, it is because demand for their products has fallen. At the university, demand for our services is increasing. More people want to improve their education during a recession, so they can get a better job.
The decline in overall national income is roughly 4%, if the decline of the last quarter is extended for a full year. The decline in the university budget is ten times that. Construction firms can start back up quickly once the economy recovers. If the university is cut by $70 million, it will take us a decade or more to climb back up to our current level.
To the rest of you, thank you for reading and thinking about this crucial issue for the future of our state.
Regards,
Elliott Parker
Professor of Economics
University of Nevada, Reno
First, I concede that you have more knowledge than me on the topic and most likely you are much smarter, too.
I still like to give my two-cents worth of comments.
My point was that spending per student for k-12 has double over the 20 years when using constant dollars.
I am confident that nationally spending per higher education student in constant dollars has probably double over the last 20 years, too.
I am sure that Nevada probably lags in that national spending increase.
One reason for that confidence is the effect of student loans. Over the last 20 years, students have seen an explosion in the capacity to obtain funds to pay for higher education. That expansion of funding encourages price inflation in tuition fees. That is classic economic theory at work.
Add in the increases in public funding and you have more a commercial enterprise at work then an educational system at work. Public education sees the students in terms of revenue generators and they accept almost anybody that can write their own name.
I believe that k-12 and higher education has been declining in quality since the 1960's.
Some of these people that have "masters" degrees probably are equal in math and English skills to an average high school graduate from the 1960's.
I would wager good money if we randomly took 1,000 public high school teachers and gave them 1960's versions of 8th grade final exams in math and English that most of them would fail.
K-12 is the bigger problem. In Nevada, we have a significant number of high school "honor roll" students taking remedial math and English classes in their freshmen year at college.
K-12 will not have a significant improvement in quality if it stays in the hands of government and unions.
I have no fantasy that will ever change.
I believe that the glory days of large increases in public funding for anything are coming to an end. We are approaching maximum public debt load.
Higher education in Nevada needs to face those facts.
In economic downturns, businesses often are forced to transform into a new business model by eliminating inefficiencies and focusing on areas of opportunities. Perhaps, it is time for Nevada higher education to do the same.
Higher education in Nevada needs to reduce duplication of effort and leverage the internet more to efficiently deliver education product.
Higher education in Nevada needs to focus on areas where they can achieve superior product and drop inferior programs. Nevada higher education needs to stop over reaching and over expanding into too many areas. In the internet age, Nevadans have a broader access to higher education product than ever before. We should recognize that in both competition terms and opportunity terms.
Thank you, Mr. Nance, that was a civil and well-argued comment.
I can understand your frustration with K-12, and as I have kids I share it to some extent. Teachers have a tough job, and are not paid terribly well, but I certainly agree that the quality of education is an intractable problem that an intelligent society should be able to address better than we have. I have more hope perhaps than you do, because I have seen improvement in my freshmen over the last decade or so, but there is so much more we need to do, and progress on that front is so terribly slow.
K-12 education is also a crucial function for a modern society, and we can't simply cut their budgets out of pique and think we are making things better. We should fund them better, expect more from them in return, and redesign the system as dramatically as we know how.
I would disagree with you about higher education, however. Yes, there is more aid than there used to be, and more people go to college who otherwise would not have. But that is a good thing, don't you think?
Higher education was an institution largely for the elite a half century ago, and as universities have grown to teach a larger share of our population, and as our economy demands more specialized knowledge out of our workforce, it is likely that the "average" student is not as good now, but that is only because our average now includes a bigger pool of students.
What universities do, what knowledge they produce and pass on, is far above where we were a half century ago. Few professors from then, and even fewer students, could comprehend the content of research journals now, and they would be staggered by the increase in knowledge. And my students, I think, are getting a pretty good education for their money.
It is perhaps true that universities could do better at reaching more students through the internet, but there is much more to a university than listening to a canned lecture from a distant voice. We can always do better, all of us. At my university we are trying hard to improve, believe it or not, and I hope the citizens of Nevada will take pride in that fact, and help us keep doing so.
Sincerely,
Elliott Parker
Professor Parker,
Thank you for taking the time to write the above article and respond to the comments made to it. It is valuable to have your input in this matter. It seems to me that the Governor is so busy fighting to make cuts in education that he is not focused on how to increase revenue. (I'm hoping I'm wrong about that.) Besides your suggestion for raising the taxes on the mining industry, what do you believe should be done to bring in more money to the state coffers?
To everyone posting to this and other articles:
Thank you. We may have differing views on many issues, but it is important that we are having this conversation. We all care about our state and communities. We care enough about these things to be upset and take the time to post our comments. Hopefully, we care enough to also contact our senators, representatives, etc. Maybe, we even attend city council meetings. It is good to educate ourselves on these issues and be involved in the choices that effect all our lives. There are so few opportunities to have these kinds of conversations. I feel like the internet has become our "town square" of the past where people meet to discuss important issues. So I am glad that Professor Parker has taken the time not only to write his original article, but also the time to reply to many of your responses to that article.
Here are my opinions. Come on UNLV, not another article to whine and complain. How about an article that shows that UNLV is making reasonable cuts and trying to save money NOW instead of thinking that they don't have to do anything as long as they complain LOUDLY?! Show some compassion for other state entities by talking more about how you can help save money. In my opinion, UNLV should be shut down so that money can be given to health care, programs for foster children, disabled adults that need housing and food, and a host of other things. Also, instead of cutting UNR's budget, just shut down UNLV and send money to fully support at least one university in the state.
These are my opinions and you don't have to agree with them if you don't like them.
BTW - the title, "Econ prof tries to teach Gibbons some economic realities on higher ed" is a great way to further insult the governor and make him even more supportive of UNLV?????