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Nevada System of Higher Education budget reduction proposal gets approval

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Posted at 11:33 AM, Apr 11, 2020
and last updated 2020-04-11 14:34:25-04

NEVADA (KTNV) — In response to the economic decline caused by the COVID-19 pandemic, the Nevada System of Higher Education Board of Regents approved a budget reduction proposal as requested by Governor Steve Sisolak.

The Office of the Governor has asked for budget reduction proposals from all state agencies, including NSHE, that show a 4% cut in Fiscal Year 2020, and a 6%, 10%, and 14 % reduction in Fiscal Year 2021. The budget reduction for NSHE totaled $124.7 million for the two-year period - $27 million in 2020 and $97 million in 2021.

Chancellor Thom Reilly said that similar to the economic slowdown during the Great Recession (2007 -2009), NSHE has turned to a “shared sacrifice” model when considering this budget reduction.

“The weeks and months ahead will be a difficult burden for all of us to shoulder; however, if we share this burden, the individual sacrifice can be lessened,” Reilly said.

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The Chancellor and the Council of Presidents, in consultation with faculty and student leadership, put together the budget reduction scenarios that aim to protect NSHE’s ability to deliver on its higher education mission. The proposals were presented to the Board of Regents at an emergency teleconference meeting on Friday, April 10, 2020.

Each of the proposals submitted to the Regents emphasized mitigating financial impacts to low-income students and avoiding layoffs. NSHE used approximately $60 million from the federal legislation known as the “Coronavirus Aid, Relief, and Economic Security Act’’ or ‘‘CARES Act” to first meet the gap in the budget reduction.

NSHE then used savings from not filling vacant positions, enacting a hiring freeze, repurposing capital funds, reducing operating costs, and other contracts as part of the reduction proposal.

To help make ends meet, NSHE focused on furloughs for administrative faculty and professional staff (classified employees fall under the purview of the Nevada Legislature) to be effective in the fiscal year 2021 (beginning July 1, 2020).

Under the 10% reduction proposal, administrative faculty and professional staff would have a 2.3% reduction in pay or six furlough days.

Under the 14% reduction proposal, administrative faculty and professional staff would have a 4.6% reduction in pay or 12 furlough days.

Lastly, NSHE proposed a temporary per credit surcharge to be assigned as follows:

  1. Universities – (University of Nevada, Las Vegas, University of Nevada, Reno)

i. Undergraduate - $6 or 2.5%.

ii. Graduate - $8 or 2.7%.

  1. Nevada State College
  1. Undergraduate - $5 or 2.9%.
  2. Graduate - $5 or 2.1%.
  1. College of Southern Nevada - $3 or 2.8% lower-division and 1.7% upper division.
  2. Great Basin College - $3 or 2.8% lower-division and 1.7% upper division.
  3. Truckee Meadows Comm. College - $3 or 2.8% lower-division and 1.7% upper division.
  4. Western Nevada College - $3 or 2.8% lower-division and 1.7% upper division.

The surcharge was calculated in proportion to current student fees at NSHE’s institutions (the percentages above are based on NSHE’s Registration Fee rates as published in the Procedures and Guidelines Manual, Chapter 7, Section 1.

By adding this per credit surcharge, NSHE will be able to use funding from the CARES Act to support low-income students during this turbulent and unprecedented event, Reilly explained. “If we did not apply furloughs and the temporary per credit surcharge, we could be facing hundreds of layoffs which would adversely affect student services and student success,” Reilly said.

"By enacting these budget adjustments across the entire system, we will be able to use the CARES Act funds and Student Access fees to minimize the impact on low-income students and keep our institutions focused on student success. These are difficult decisions to make, but together we can emerge from this economic downturn stronger than ever," said Regents Chair Jason Geddes.

The proposed budget cut will next be sent to be reviewed by the Office of the Governor.

NSHE System Administration and the Board of Regents will continue to work collaboratively with the Office of Gov. Sisolak and all county, state, and federal health officials regarding COVID-19. The health and wellbeing of Nevada’s public higher education community continue to be NSHE’s utmost priority in this developing situation.