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Higher education cuts may yield drastic solution
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LAS VEGAS REVIEW-JOURNAL
Updated: Feb. 22, 2011 | 7:49 a.m.
The word on the street is that UNLV and the rest of the state's colleges and universities could go bankrupt because of budget cuts.
But is it really that bad?
"Absolutely," said Dan Klaich, the higher education system's chancellor. "I think you have to think carefully about what the alternatives are."
Budget cuts proposed by Gov. Brian Sandoval are anywhere from about 10 percent to up to 42 percent of the higher education system's budget, depending on how you measure it.
"Pick any percentage you want and you can make it real," Klaich said. "But you can't run away from the fact that this means $162 million out of the budget of the Nevada System of Higher Education."
That amount equals the entire annual state support for:
■ Nevada State College
■ Great Basin College
■ Western Nevada College
■ UNLV's law and dental schools
■ And virtually all of the University of Nevada, Reno, including the medical school.
There will be student fee increases to help cover the gap. There will probably be pay cuts. Some programs and departments are likely to be eliminated too.
But all that might not be enough. Something drastic will have to happen. Short of shutting down a couple of the community colleges and the state college -- and those sorts of moves are being considered -- that something might be bankruptcy.
The fancy term for that is financial exigency (rhymes with "excellency").
It's not exactly like bankruptcy, but it's similar. Think of it like this: The employees are the creditors in this form of bankruptcy. Declaring it will ruin your reputation and your credit rating, but at least you can ditch your creditors.
A formal declaration of financial exigency would allow the colleges and universities to fire anyone without much notice, regardless of contractual obligations. That includes tenured faculty.
"They could basically get rid of people more quickly than they could without a declaration of exigency," said Gregory Brown, a history professor at the University of Nevada, Las Vegas and president of the university's chapter of the Nevada Faculty Alliance.
Without a declaration, it wouldn't be that easy. For example, let's say UNLV decides it wants to eliminate its College of Engineering because it's really expensive to run. Because of contracts, the university would be required to give a year's notice to those employees who have been with the university for more than three years. That would mean most of the savings wouldn't be immediate.
And what's more, tenured faculty can't be fired for any reason other than poor performance -- unless there's a declaration of financial exigency. That's just the way higher education works.
That's why Klaich said he and the Board of Regents are seriously considering financial exigency as an option. It would allow immediate savings on a vastly larger scale than not declaring it would.
But, as always, it's not that simple.
A financial exigency declaration could also have terrible, long-lasting consequences.
A declaration could ruin the reputations of both universities and the research institute. It would be difficult to recruit top research professors after a declaration because they might not want to risk working there.
Without top faculty, research grants could drop dramatically. Grants and contracts brought in nearly $300 million to the three institutions last year.
A declaration could also damage the system's bond rating. That's similar to your credit rating. Damaging that could mean higher interest rates for the institutions, which would mean more money down the drain.
It could also open the system up to legal liabilities. In other words, fired workers could sue. Exigency is a very little used tool. It's not well defined either in statute or in case law. Someone who is fired under what they believe were unjust terms could sue the system or the university, piling up legal fees for years. They might even win.
Limited forms of exigency have been used here three times, all in the 1970s, according to a review from the higher education system's vice chancellor for academic and student affairs, Crystal Abba, that was sent to legislators on Friday.
In 1977 and 1974, the Board of Regents declared financial exigency for certain programs at the Desert Research Institute. It did it again in 1977 for a business unit at CSN. The Board considered it in 1982, and again last year, but avoided it.
Financial exigency or its equivalent is also being considered elsewhere as states grapple with budget cuts. Arizona's higher education leaders declared a limited form of it to impose furloughs. News reports indicate that a junior college in California is considering it, as are several public school districts in Texas and Louisiana. It has also happened in a few cases elsewhere in the past.
But it appears that no major university or higher education system has declared exigency or is seriously considering it right now. Except Nevada.
And right now that's all Nevada is doing, considering it. No cuts have passed the Legislature, and they probably won't until June.
"We are going to fight these budget reductions tooth and nail until the final gavel comes down," Klaich said.
He said all options will be on the table if cuts do come down. Exigency, whether limited in scope or systemwide, mass firings, closing whole schools.
If schools are closed, programs are eliminated, faculty are fired en masse, and entire colleges at the universities are shut down, it is likely that thousands of college students will have nowhere to go.
They are already complaining that classes they need are full because there is no money to add more classes or hire more professors.
Contact reporter Richard Lake at rlake@reviewjournal.com or 702-383-0307.
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As a future researcher you can all thank yourself for the long flights to other countries because we will not have the educated population to figure things out in the US. Other countries are surpassing the US economically, socially and educationally because we refuse to put money into a system. You don't crowd more students into a classroom. The smaller the classrooms size the better the learning environment. Teachers can perform better when they can focus on a students needs. NO PERSON CAN DO THAT when classrooms are 40 students and class periods 55 minutes. Your only able to give each student a little more than a minute per class.
Some people on these boards complains about other peoples salaries? Ummm why ? You are complaing about Lon Kruger's salary he makes over 9 million a year gross for that program. He pays for himself and part of that money goes to the University. You pay for what you get. UNLV Basketball costs 3.4 million but makes 6 million profit. Doesn't take a rocket scientist or a person with an 8th grade education to realize that is a good value.
Why don't the 2million people that complain on these boards put down their 5 dollar starbucks lattes and give that to UNLV. That's 10 million a day and case solved. Or realize that the state is getting killed by not raising taxes on the casinos(the lowest taxed casino's in the US. PA is 50% and Mississippi 25% tax rates on casinos.)
The argument against raising taxes is moot. By not raising taxes your saying we won't pay more for public servants, things such as policeman, firefighters, EMT's, and teachers. Your saying please educate my children but do it at no cost to me because my children's educations aren't worth it. Anyone can spin numbers to make them look good. But logical thinking and moral standards can't so please before writing on these boards use logic and the brain given to you.
Hey, Klaich! How about answering some real questions?
(1) Why do you deserve to be paid $330K/yr? Are you really worth ~twice what we pay Sandoval?
(2) Why do you allow UNLV to pay its Head Football coach $450K/yr and his assisants $125K? Is UNLV a NFL farm team?
(3) Why do you allow UNLV to pay its head basketball coach $1M/yr and *his* assistants $130K? Is UNLV a NBA farm team?
(4) Why do you alllow UNLV to protect that JUNK department known as "Interdisciplinary"? Isn't it true that Interdisciplinary only serves to provide academic cover to jocks?
(5) What percentage of NSHE football and basketball players ever graduate? Isn't it significantly < non-athletes?
(6) How much do your sports marketing partners -- t-shirts, posters, TV, etc -- make off your teams?
(7) Why do you fund a law school? Are there too few laws and lawyers in this state?
(8) How many NSHE buildings named after state politicians?
(9) How many of your employees are related by family or marriage to current or ex state legislators?
Tick tick. I'm pretty good with numbers so don't try to baffle me with statistics.
By the way, is anyone hearing anything from the Regents? You know, the people we elected to oversee higher education. We hear the (not elected) President of UNLV publicly declaring the state of Nevada is on the verge of fiscal collapse. We hear the (not elected) Chancellor vowing to fight the cuts. Shouldn't the people we elected take control of this situation? I know I'll remember this next election.
@deacon427: The numbers show that higher ed spent virtually no effort in controlling cost between 2001 and 2009. Then the downturn and who suffers for this poor management? The students. They are the ones will have to deal with the closed facilities, reduced classes etc. You want to dismiss this with high flown hyperbole and simply demand more money. I don't think so. Oh, who started that irresponsible public talk of exigency? The President of UNLV. Yet more irresponsibility. Broaden the tax base? Nooo. Every indication is that higher ed is financially mismanaged. Something must change.
ah the poor kids
that is where the losers that created the monster should pay for it
leave smart people,who never had these turds pay for them
rip
losers
Folks there are many things wrong with how things are done with regards to how education is run in this atate and in fact the whole country, but it can be fixed. There are also a great many things that can be pointed as shining points, one of which is we now have first class facilities in which education can take place, and studies show that has an affect on learning. I have no doubt money has been misspent in the Hi Ed system, but then again I am not sure of any organization, public or private, that is leak proof, so tone it down on the malfeasance crap. The exigency talk is just that, talk. They won't do it because it will cause unrepariable damage, and that is something that no one wants. The budget increase so much with only 22% growth because Nevada was so far behind the curve that backward countries in Africa were funding education better than we were. So just simmer down the talk about cutting, cutting, cutting. Like I said before any moron can cut a budget, but it take vision and intelligence to find a solution that will work for the long term benefit and growth of Nevada. Our number one resource and asset should be the people, and our young people, the leaders of tomorrow are what we need to nurture, and if you can not see that then you are one blind son of gun. WE need to bring everyone to the table and find a workable solution. Here is the deal. We need to tell mining, if you want to mine here then you had better sweeten the pot. Same with Gaming. Broaden the tax base, which should have been done ions ago, and now really needs to done. I don't want bigger goverment than we now but dog gone it lets done cut off our nose despite our face. Find solutions and don't use a machete to do it.
@Proud democrat: I make no such assumption but I do know we were not talking exigency in 2001. Starting from that point, higher ed 's operating budget doubled while enrollment went up by 22%. Now we are talking exigency. Those who are supposed to manage higher ed are guilty of gross financial malfeasance.
theshadow....your assumption is that higher ed was properly funded in 2001....how can you possibly make that argument??
@ Peter Griffin,,, As a person that is completely anti-illegal alien and I do understand the education costs from the issue and feel it is unfair. But please prove to me there are more Caucasian meth heads than any other race, of course percentage wise who are the biggest heroin users? Actually I could care less and while whites make up more welfare recipients many Hispanic are listed as white. Few States have a listing for Hispanic and they are listed as white or black and most will list as white and this is with criminal listing also. While States are changing listings, Caucasians are still the majority in this country and if we list percentage demographics on welfare etc things are rather equal. Oh and happy black history month to you, hopefully during these bad times we can figure a way to educate more people without the wasteful spending.
@CrinVegas: From 2001 to 2009 (proposed) while higher ed. enrollment went up by about 22% the operating budget went up about 110%. Now we are talking exigency. Can you explain how the operating budget was spent during these years in any way other than financial mismanagement?