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August 21, 2014

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Higher education faces greatest financial state of emergency in decades

Beyond the Sun

UPDATED STORY: Chancellor: Budget cuts would undo ‘decade of significant progress’

For the first time in nearly 30 years, the Board of Regents today will consider declaring a financial emergency that could lead to pay reductions, furloughs and layoffs of faculty and staff.

The extent of budget cuts won’t be known until the Legislature’s special session, but the Nevada System of Higher Education is bracing for reductions of at least 20 percent, on top of the deep reductions that have already taken place.

Among options facing the regents: tapping student-generated funds for operating costs that had been set aside for capital improvements; adopting new surcharges for student tuition and fees; and reducing personnel costs through furloughs, pay reductions, hiring freezes, layoffs and terminations or restructuring of programs.

Some of the changes, particularly revising the working conditions and compensation for tenured faculty, require the board to declare what’s known as a “financial exigency.”

“There is a lack of funds to meet current or projected expenditures,” said Bart Patterson, vice chancellor of administrative and legal affairs for the Nevada System of Higher Education.

The new cuts would seriously undermine educational opportunities for Nevada students, as well as the quality of the education they receive, said Greg Brown, president of the UNLV Faculty Alliance.

“There’s the prospect of students losing access to programs, classes and faculty,” Brown said. “That alone should be getting people’s attention.”

The worsening budget projections spring from conclusions reached by the recent Economic Forum, which estimates revenue flowing to the state. The implications for higher education will be discussed today when the Board of Regents holds a special meeting at the College of Southern Nevada’s West Charleston campus.

Shortchanging the state’s colleges and universities will only perpetuate “a vicious cycle,” Regents Chairman James Dean Leavitt said.

“We’ve known for a long time that, as a state, we were far too reliant on gaming revenue,” Leavitt said. “We have to diversify our economy, and it’s absolutely necessary to have a highly educated, highly trained workforce to induce companies to relocate to Nevada. Higher ed is part of the solution to the state’s long-term problems. We’re very concerned that people recognize the magnitude of that.

“If there’s any good news, it’s that the presidents at each institution are engaging in substantial planning,” Leavitt said. “And there’s certainly unity among the regents right now, and we have a lot of support for finding solutions.”

The chancellor, in consultation with the presidents of the state’s colleges and universities, is required to recommend to the regents that they declare financial exigency “after it’s determined there are no other ways to reduce expenditures to meet the budgetary reduction,” Patterson said.

The last time the regents declared a financial exigency was in 1977, and it applied only for the business unit at what is now CSN.

Regents last discussed the possibility of a systemwide financial exigency in 1982, when a 10 percent budget cut was looming. The step wasn’t taken.

“We’re looking at more than a 20 percent reduction (in state support) on top of what’s already been cut,” Patterson said. “Obviously, this is a much more dramatic situation than was faced in 1982.”

Declaring a financial exigency would give individual campuses more freedom in reducing personnel costs because existing contracts could be more easily adjusted. It would also allow higher ed administration to operate on an accelerated timeline, bypassing existing requirements for notifying employees and students of possible changes.

Nevada is far from the only state wrestling with such decisions. Education officials in several states, including Utah, Texas and Mississippi, are also considering declaring financial exigency.

Some of the upcoming choices rest with lawmakers, not campus administrators, Leavitt said.

The 2009 Legislature put in mandatory furlough days for faculty and staff, and it could happen again during the special session, Leavitt said. He spent much of last week meeting with members of the Legislature’s leadership “to express our concerns,” Leavitt said.

Brown said UNLV administrators have been meeting with the Faculty Senate to look at potential areas for cuts to programs and services, and described those consultations as “very productive.” The mood at UNLV is “busy,” Brown said, as the faculty deals with “more students, less support staff and a million variables floating around. The stress level is high.”

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