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November 24, 2014

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Regents to provide $2.6 million ‘bridge’ for Northern Nevada colleges facing cuts under state’s new funding formula

Nevada's higher education leaders unanimously approved $2.6 million in "mitigation" funding to help Northern Nevada community colleges adopt a new funding formula.

Gov. Brian Sandoval's budget, approved by the Nevada Legislature just a few days ago, includes a new funding formula for Nevada's seven colleges and universities.

It represents a shift from funding based on student enrollment to one that rewards course completions and graduation rates. Individual campuses now will be able to keep tuition money paid by their students, instead of pooling it statewide and having it redistributed by lawmakers.

Chancellor Dan Klaich, the architect behind the funding formula changes, said it is a more clear and fair way to distribute $362 million in state money to colleges and universities.

Under the new formula, Southern Nevada colleges may expect $8 million to $13 million that previously had gone to Northern Nevada schools, according to some projections.

Lawmakers largely adopted Klaich's funding formula, Klaich told regents during a meeting Thursday in Reno. The Nevada System of Higher Education's Board of Regents and a legislative study committee previously adopted the formula.

However, the Legislature did not fund Klaich's plan to create a "performance funding pool," which would have rewarded universities for conducting more research and community colleges for remediating more students.

Nor did lawmakers approve any "mitigation" money to help rural colleges bridge the funding gap caused by the new formula. Some Northern Nevada colleges were expected to lose as much as 12 percent of their budgets each year over the biennium under the formula, Klaich said.

Both the performance and mitigation funds were priorities for Nevada's political leaders, Klaich said. However, when lawmakers restored faculty pay, which was cut by 2.5 percent in 2009, available funding dried up. (Lawmakers still mandated six unpaid furlough days for faculty.)

"The game sort of changed when the pay bill was passed," Klaich said. "When it passed, there weren't a lot of coins left in the purse."

Although discussions for creating the performance pool could be tabled, Klaich said finding some mitigation money for Western Nevada and Great Basin community colleges was important. The 11 percent to 12.5 percent annual budget cuts to those two schools were "unsustainable," Klaich said.

However, by consolidating three reserve funds, Klaich said he found $2.6 million in "mitigation funding" that could be used to help Western Nevada and Great Basin weather the transition to the new funding formula. Klaich said he didn't advertise the reserve funds to lawmakers until toward the end of the session, when it became clear no state money was available for mitigation.

Both schools will suffer cuts of between 5 percent and 10 percent next year, Klaich said.

Regent Ron Knecht, who is from Carson City, said while he supported the new funding formula, he took issue with the cuts to rural Northern Nevada schools.

"(The mitigation money is) necessary, but it's not nearly enough," Knecht said. "The cuts are too big.”

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