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twitterTHE LEGISLATURE:
Think tank’s Freedom Budget balances budget with deep cuts in education
Thursday, May 14, 2009 | 2 a.m.
Sun Archives
- County critical of Gibbons' plan to take property tax (5-12-2009)
- As budget clock ticks, easy part still isn't done yet (5-12-2009)
- Panel restores some of Gibbons' cuts to Medicaid (5-11-2009)
- School district: If you must cut the budget, do it our way (3-29-2009)
- Fiddling on the fringe (1-16-2009)
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Carson City — The state’s libertarians advocate curing Nevada’s budget crisis without a tax increase.
For months all they’ve heard from Democrats and moderate Republicans is this: Well, what would you cut?
They would have to cut because the state faces a budget deficit approaching $3 billion. Now, when they get that irritating rejoinder, they can wave a copy of the “Freedom Budget,” a document by the right-leaning Nevada Policy Research Institute that purports to show that Nevada’s government can be shorn of excess and needs no new revenue.
For conservatives, the Freedom Budget is aptly named, a liberating shield from carping doubters, armor against the poison arrows of taxes and big government. But what about for everyone else? What’s in it?
The Sun gave the Freedom Budget a once-over.
Herewith, freedom:
•••
The Freedom Budget offers $5.1 billion for the next two years, which is more than $1 billion short of the budget of Gov. Jim Gibbons, the first-term Republican. Legislators in both parties attacked his budget for its 6 percent pay cut for teachers and state workers and 36 percent cut in higher education.
The Freedom Budget would slice the Gibbons budget by about 17 percent.
Chief among the cuts: Ending most state aid to the state’s four-year universities. Geoffrey Lawrence, a fiscal analyst for the Nevada Policy Research Institute, called it “devolving” the state universities, which he likened to privatizing them.
Unless the universities could find money in grants or donations to make up for the reduction by the state, tuition would increase to more than $15,000, Lawrence said.
By contrast, for the academic year beginning this fall, undergraduate tuition and fees at UNLV are expected to be about $5,000.
Lawrence said dropping state support for the universities “would force UNLV and UNR to elevate to a level the free market demands.”
This might be hard to do instantaneously and without money, he acknowledged, saying perhaps the plan should be phased in over a few years. (In the Freedom Budget, however, the freedom comes at once.)
Lawrence noted that some of the top public universities in the country, including the University of Virginia, thrive with very little state taxpayer support.
Jim Rogers, the outspoken chancellor of the Nevada System of Higher Education, is against the idea.
He noted that elite public universities have decades — in some cases centuries — on Nevada’s higher education system, during which time they’ve built up reputations that are — quite literally — priceless. They win more than $2 billion each in research grants every year, and donors give gifts in the millions that pile up and turn into billions for their endowments.
“We get our money from the state because we don’t have other sources,” Rogers said, referring to the difficulty of obtaining research grants and donations for the universities. “We haven’t engaged in investing in education, so we haven’t developed viable assets,” he said.
The steep tuition increase of the Freedom Budget would send Nevada’s best students to New Mexico, Utah, Arizona and California — all places where they could get a better education at a lower cost, Rogers said.
Then, once enrollment fell at Nevada’s universities, administrators would have to raise tuition again.
“It’s a death spiral,” Rogers said.
•••
The Freedom Budget would make deep cuts in Gibbons’ K-12 budget, to the tune of more than $450 million during the biennium from the Distributive School Account, the main statewide schools budget.
Where would the state’s schools cut $450 million?
“It would be up to the school districts as to how they would allocate that money,” Lawrence said.
The only real options would be bigger teacher pay cuts than Gibbons’ proposed 6 percent, or layoffs.
The state’s class-size reduction program would also be eliminated in the Freedom Budget, for a savings of more than $300 million during the biennium. Class-size limits “dilute the teacher talent pool and expose greater numbers of students to underperforming teachers,” according to the Freedom Budget.
Not true, Clark County Schools Superintendent Walt Rulffes said.
It’s no coincidence that the district’s student achievement is highest in grades 1-4, which have the smallest classes, Rulffes said. Achievement begins to wane after that, dropping sharply at middle school and again at high school. Those are the tipping points when class sizes increase.
In a diverse district such as Clark County, larger class sizes mean more students with significant challenges, including nonnative English speakers, special education students and children from low-income households.
“Try taking care of 32 primary grade children with a litany of problems,” Rulffes said.
Removing the cap on class sizes would also hurt Clark County’s recruitment efforts, Rulffes said.
The jury is still out on the benefits of class-size reduction, said Kathy Christie, vice president of the Education Commission of the States, a nonprofit policy and research clearinghouse. Some studies have shown that good teachers and specialized programs are as valuable as reducing class size, she said.
The most definitive studies found no more than 20 students should be assigned to a teacher to get the most benefit from class-size reduction, Christie said.
As for the institute’s claim that such efforts dilute the teacher talent pool, Christie said that argument sounds like a spinoff from a study of California’s class-size reduction program.
When California implemented class-size limits, new teaching jobs were created. Some of the better and more experienced teachers at inner-city schools fled to new positions at suburban campuses. But there are ways to structure class-size reduction programs without creating similar inequities, Christie said.
The Freedom Budget would also cut all-day kindergarten, saving $56 million for the biennium. The institute’s Lawrence said there’s no evidence all-day kindergarten works.
On this score, Christie said the latest studies suggest that gains from full-day kindergarten are maintained when students move on to high-quality schools. If the quality of instruction is lacking, the gains fade, Christie said.
The Freedom Budget budget would restore funding for several programs slashed during the state’s fiscal crisis, including $7.7 million in grants to schools and districts for remediation and innovation. The popular grant program — which provides money for after-school tutoring, teacher training and other programs — was one of the first cuts in the state’s education budget this time around.
Lawrence said he didn’t have enough data to determine what the per-pupil spending would be in his budget. He acknowledged it would be significantly reduced.
Calculations by the Sun show the Freedom Budget would spend roughly $935 less per pupil than the $4,958 proposed in Gibbons’ budget.
Nevada is one of the lowest-ranked states in the country in this category. Student achievement, too, has been mediocre for years.
Lawrence said there’s not necessarily a connection: “Across the country there hasn’t been a strong correlation between spending and performance,” he said. “It comes down to how you’re spending the money. If you have a heavily bureaucratic system with a lot of overhead, you’re not spending the money effectively.”
He cited Florida as having enacted school choice and other reforms and improved performance markedly in the past 10 to 12 years without vast spending increases, while in Nevada, despite healthy increases, performance measures are still mixed.
“Spending is not necessarily a determinant of student performance,” he said.
•••
The Freedom Budget leaves the Health and Human Services Department largely unscathed, even adding some money to Gibbons’ budget.
But it slashes the Business and Industry Department, saving money by deregulating whole industries. For instance, the state would save $19 million during the biennium by eliminating insurance examiners.
So, someone could set up a storefront and start selling insurance, unregulated?
“Yeah, basically. The idea is sort of an ideological recommendation,” Lawrence said.
Same with mortgages. Lawrence said the preponderance of mortgage fraud and foreclosures only indicates the failure of the regulatory state.
Given that failure, Lawrence asked: “What’s the point of having it?”
Discussion: 30 comments so far…
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Tell these NPRI Freedom Fairies to stop using every service they propose to eliminate, and see how long they last.
I thought the mission for land grant universities was to provide educational opportunity to the citizens of the state. Not only to those who are affluent. Have our universities go free market when no other state schools are, yeah real free market. It's bad enough that these anti tax anti regulation typed drove our nations economy in the ground but these cynical bas---ds want to make the American Dream unobtainable for the poor and middle class. Now that's what I call class warfare.
Maybe it is time to just eliminate police and firefighter departments. So called public safety would be supplanted with neighborhood organizations???
Come on NPRI buck up and let the free market do it all!
This is why NPRI lacks credibility.
I love that this is a group of chromosome deficient people put their heads together, and this is what the "think tank" came up with. Anyone who suggests that gutting education is the way to balance a budget has zero credibility. I agree with the person above, let's pay police minimum wage, and let's pay firemen per response. Let's go fifty bucks a fire. Welfare--- let's get rid of that too, we'll just toss families on the street.
Look, I get that this budget is drastic and not really realistic. However, I am somewhat disappointed in the clear bias of the article. For example, the statement "(In the Freedom Budget, however, the freedom comes at once.)" is a bit over the top coming from a news article. I am big boy, and I don't need you help to make my own decisions. I expect snarky comments like that from Jounalism students, not a Pulizter winning paper.
Have to agree with Jim 24681.
I didn't recognize that bias at first, because frankly I agree with the snarkiness and bias. But that's not what we should get from our news outlets.
We have to accept it from MSNBC, Fox News, the R-J...try to keep the Sun out of that crowd.
So, if this think tank can think, then what ideas does it propose to also find new revenue sources? Or is cutting all it's capable of thinking? When things get tough in my household, we do more than just modify the budget. We get second jobs.
Credibility crashes with this budget absolutely devoid of common sense.
Personally, I was not offended, but quite entertained with "freedom at once." It's true. Face it. It's worthy of a chuckle.
It's a pretty clear statement of how far off some people can get when they see only what they want to see.
What a bunch of hooey.
"Lawrence said the preponderance of mortgage fraud and foreclosures only indicates the failure of the regulatory state."
Oh I see, it was TOO MUCH regulation that led to the banks lending hundreds of thousands to anyone with a pulse.
This is the funniest thing I've read all week.
"Tell these NPRI Freedom Fairies to stop using every service they propose to eliminate, and see how long they last."
Galfromvegas -- the state's true mission is not really to provide services, it's "protection, security and benefit of the people..." within the limitations of its organic law (Nevada's Constitution). And name calling like this doesn't do much for your credibility here.
Not one of you detractors here have offered a real solution to where is all the money for your favorite services is supposed to come from. Maybe you haven't been paying attention. The foreclosures and business failures are sure indicators the people have been bled about as dry as they can be. Like Margaret Thatcher once said "socialism works only as long as you can find someone to pay for it."
The DSA basic support per student of $4,950 does not include several sources of funds. Including some local funds, federal funds, and other state funds.
For example: for 08-09 school year CCSD received about $4,900 per pupil in basic support. But, their official per pupil spending number is $7,900 (another says $7,100). That is a difference of $3,000 per pupil made up elsewhere.
http://ccsd.net/news/publications/pdf/CC...
http://ccsd.net/directory/budget-finance...
That said, Geoff's official per pupil number, assuming the Sun calculations, would come to about $7,000 per pupil - about the state's official funding level according to the US Government in 05-06. Of course, the Freedom Budget doesn't call for a fund sweep of local funds so local governments would be allowed to fill the gap if they decided that was important.
Their official per pupil number, however, does not include federal funds, special service funds, internal service funds, food service funds, debt service funds and capital projects.
Total spending per pupil for Clark County School District for 08-09 (as originally budgeted) was $13,387 from all fund sources. http://npri.org/publications/funding-fan...
Learn more about this numbers game here: http://npri.org/publications/numbers-gam...
Private colleges charge tuitions that range from $10,000 to $40,000 and not only survive but thrive.
If UNLV or UNR went into a death spiral that Rogers claims would happen, it would only occur because students would realize that the value they get from the degree is not worth the cost.
Maybe Rogers is admitting that the quality at UNLV and UNR is poor or maybe he's admitting that they have no idea how to make it better.
Patrick, I thought you'd be embarrassed to show up here again...
morgen;
AND HAVE THE GALL to compound the foolishness with MORE misleading stats and links.
UN BEE LEEVABLE.
Gmag,
Care to prove it wrong? Or do you just blindly follow the crowd mimicking and imitating everything they say as gospel.
Well, there's that usual canard that deregulation will solve everything. Despite the fact that deregulating the banks put the nation into this crisis (and yes, that's as much Clinton's fault as it is Gramm's), or that deregulating electricity in California is what allowed Enron to "cook the books" a few years ago.
And as for basically turning UNLV and UNR into private institutions (despite the fact that "private" institutions are usually elite schools with much more stringent admission standards than public universities)...at that point, lock the doors and turn out the lights. We can't triple the tuition price and expect students to stay. And we'd still lose money on it because of the number of students who come under the Western Undergraduate Exchange (particularly from Hawaii) - they get to pay their in-state rate instead of our out-of-state one.
UNLV and UNR can't wave a wand and suddenly have the same prestige as Duke University. And expecting them to do that is frankly setting the whole system up for failure - not only the Universities, but the Community Colleges as well.
1 law "deregulating banks" and hundreds regulating them and you blame deregulation
California's price fixing scheme was not real deregulation. The government semi privatized it but required electricity to be sold at fixed prices.
Most private schools are not elite, nor do they have overly strict admission standards and most do not charge the $30-40k you think.
Have you ever considered that UNLV and UNR may be admitting students who may not be ready for college while requiring them to pay higher tuition rates than the community college? Do you consider that is fair?
A thought exercise: Should we give money to wealthy people so they can improve their life even more?
PS the Freedom Budget does not eliminate funding for community colleges.
I have a question for Patrick. What are the main purposes of the private colleges that charge $10,000 to $40,000 you mention. I believe that you and I have a different vision on what higher education encompasses. UNLV for example, has a much different purpose than the University of Phoenix. One is a state university, the other a for profit business. The difference is important. Beyond the research and innovation that comes out of institutions like UNLV (if they are properly funded) they are not meant to be run for profit.
Two other points. One being that beyond research, state universities are meant to be an affordable way to educate the populous, ensuring that we have the business managers, teachers, and (God forbid) public intellectuals who find work in think tanks. Privatizing such functions would seem to place profits ahead of education and would in the end leave many of us unable to afford an education. I am just not convinced that we can completely rely on the marketplace to democratize education.
Secondly, Nevada has a structural problem that if fixed arguably could be a compromise between privatization and increased state funding. If the state's universities and colleges were allowed to keep all of their tuition rather than a percentage than we may not be hearing such back and forth over higher education's budget. Instead, the state takes all of the tuition dollars, decides how much each school gets, and puts the remainder into the general fund. Perhaps getting rid of this method would be a satisfactory compromise?
There was an article this morning on MSNBC - colleges are raising tuition rates, but financial aid is not keeping pace. Thus students are graduating with deeper debts (particularly credit card debt to cover the difference between what's needed for school expenses and what they get in aid) and entering a job market that has one of the lowest hiring rates for college graduates in years.
Have you considered that by tripling UNLV or UNR tuition, you're just going to burden even more students with crippling debt? Or is that just the price you pay for trying to make something better of yourself?
Why shouldn't UNLV be a for profit business? Profit isn't a bad thing. In fact profit signals that you have done well at saving scarce resources and have deployed your resources to high valued uses. It means you're more productive with less.
In a competitive free market, the higher the profits means that fewer resources are being used to create the even more happiness.
The freedom budget already allows universities to keep their tuition and fees. State subsidies to higher education are not only unfair for low-skilled workers (they help pay to help make wealthy people wealthier) but it also distorts incentives.
If you don't pay the full cost then you may be more likely to choose a degree in something that may end up being worthless. You also take it less seriously than paying the full cost.
Additionally, even if we did privatize UNLV and UNR other private schools would jump in and set up shop, establishing more competition, and helping to lower prices (UNLV and UNR would actually start off very quickly to trim fat, increase productivity and help students get a valuable education if this happened, and they would do so by spending less per student, allowing them to charge lower tuition amounts than you might expect.
Hmmm,
I completely disagree with you on two points. One, privatizing UNLV and UNR would not necessarily draw more private schools to Nevada. Markets really don't work that way. Two, what makes a worthless degree? The point of education is not necessarily to make money. Some of the world's greatest innovators, artists, and politicians did not necessarily start out with profits in mind. (A little something I picked up in all those history courses which have still yet made me a dime).
It would be nice to see UNLV become a little more efficient, but I blame the free market for that as well. If UNLV could offer competitive salaries to the accountants and admin staff, instead of any reasonably talented person finding better work in gaming for far better pay, than maybe it wouldn't take weeks for them to return emails! (tongue firmly planted in cheek).
NPRI is funded by the ultra-right Sheldon Adelson. There is not much 'thinking' when you are parroting Adelson's wishes.
As far as state regulations not preventing the financial collapse, read the article here http://www.washingtonpost.com/wp-dyn/con... "In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules."
There are aspects of the cuts I do support, but anything coming from NPRI is full of false conclusions. They operate like typical neocons; come up with a conclusion first, then twist and manipulate data to support that conclusion, while leaving out data that proves the conclusion false. I provided one example concerning state banking regulations. With a little research you can prove most of their conclusions false.
Gordon,
Thank you for articulating the profile of NPRI. I have been reading the non-stop pontifications from them on this site for awhile now, but until you addressed the issue, all I had was a set of questions about their motives, morality and modus operandi. Your vision and verbiage cut to the facts.
Gordon -- read that National Bank Act. You'll find it at 12 USC 24 (SEVENTH). If you followed the high court decisions surrounding it for the next fifty years you'd see national banks lack the authority to lend credit, be an indorser, surety or guarantor for another.
That means all your unsecured credit cards and accounts offered illegally by those banks -- Citi, Chase, BofA, Wells Fargo, etc. -- are "ultra vires the bank" (the proper term). That means they can't legally enforce an agreement they were powerless to create.
Wait until that house of cards collapses, and they would deserve it.
Gordon,
That isn't an arguement.
Reg Joe,
Yes, more private schools would probably come. Jim Rogers has all but admitted that the quality of education at UNLV and UNR is so bad that kids would leave. If a college degree has real value and it is in demand in Nevada then private schools will fill the void.
I'd say far more people are motivated by profits than they are for altruistic reasons. You've got a tough job proving otherwise.
"If a college degree has real value and it is in demand in Nevada then private schools will fill the void."
Here we go again...if that were truly the case, there would already be private universities here. There are private universities in other states with much larger public university systems that don't seem to need the public system to fade away to be successful.
You can't rely on vocational training or hoping that people who get their college degrees somewhere else move here. That's an unrealistic expectation, as is deciding to throw the system into the private sector and demand it compete when it can't.
Why shouldn't UNLV be a for profit business?
I WANT to print this phrase on a 20x20 and frame it! OMG I would never expect such despicable level of idiocy.