With just two weeks to go before the end of the 2021 legislative session, state lawmakers boosted the Nevada System of Higher Education’s (NSHE) budget with the allocation of more than $93 million in federal COVID relief dollars aimed at lifting a system-wide hiring freeze.
Legislators in a joint budget meeting on Saturday approved spending part of the state’s $2.7 billion share of American Rescue Plan to restore funding for an estimated 487 full time system positions kept vacant or on track to be eliminated — a partial reversal after lawmakers on Friday split along party lines in a vote to close that budget with $169 million in cuts still in place.
The decision to backfill those cuts had been hinted at by Assembly Ways and Means Chair Maggie Carlton (D-Las Vegas), who on Friday said “we’re not done yet” on the NSHE budget prior to approval of the recommended 12 percent cuts. One day later, Carlton reiterated that “it’s not over until it’s over.”
“We were trying to get where we needed to be, we needed to have information and guidance, we needed to be able to allow staff to get their work done,” she said. “So I just wanted to make sure that folks understand that as we move through this process, it's an ever changing world because we don't know what's on the other side of the curtain right now.”
Lawmakers stressed that the federal dollars needed to be allocated only for restoring and hiring positions — a sentiment agreed to by NSHE Chief Financial Officer and chief lobbyist Andrew Clinger.
“I'm happy to make sure that we as a system, as we implement these funds, that it goes specifically for position restorations and does not get moved to any other spending category, so that it will only be used to restore positions,” he said on Saturday. “We are in agreement with that.”
Still, the federal influx doesn’t immediately reverse all of the proposed spending cuts to NSHE. The system is still facing a roughly $75.7 million combined cut over the biennium, nearly all of which will be absorbed through operational cuts, Clinger said.
But with expectations that tens of millions of dollars available through additional higher education-specific federal aid will cover most, if not all, of expected institutional shortfalls from non-state revenue sources, Saturday’s decision brings the system’s budget as close to whole as it has been since the pandemic began.
Even so, how this position funding will be treated in future sessions could still be subject to change. Because it is a one-shot injection of funds being used to restore permanent positions, rather than a more traditional increase to the system’s base budget, whether lawmakers keep the system’s budget at the currently proposed level in future sessions remains “an open question,” Clinger said.
Clinger told The Nevada Independent that he hopes the amount of the federal aid will be treated as part of the system’s base budget in the future, but said the ultimate policy decision will fall to the governor and the Legislature in two years’ time.
A partial funding restoration
Recent joint budget committee decisions took advantage of the recently-released broad spending guidelines for the state’s $2.7 billion share of the $1.9 trillion federal American Rescue Plan legislation passed in March.
Lawmakers had previously voted to preliminarily use that same pot of money to backfill more than 300 vacant state employee positions at an estimated cost of more than $20 million over the two year budget cycle.
But Democratic legislative leaders have been more cautious about backfilling the governor’s proposed 12 percent cuts to the NSHE budget — in part because of other federal relief dollars targeting higher education institutions, but also because of a desire to wait for federal guidance and long-simmering tensions between the Legislature and NSHE.
“At this moment in time, we can make this decision,” Carlton said. “Forty-eight hours ago or so, we couldn't make this decision because we weren't there yet.”
In total, lawmakers approved spending $46.6 million over the upcoming fiscal year and $46.5 million in the 2023 fiscal year to fund position restorations and lift temporary hiring freezes for administrative and academic faculty positions.
NSHE estimated that the approved funding would restore 487 positions, but not all divisions of the higher education system provided specific hiring estimates. Clinger said it was because the system could not identify all potential impacted vacancies, saying “it wasn't in any attempt to not be transparent.”
According to documents shared with the committee, the federal funding will help fund 100 positions at UNLV, 122 positions at UNR and dozens of positions at state and community colleges.
A partisan split emerges on the budget
Prior to Saturday’s actions, Republican lawmakers had criticized the move to close the higher education budget with substantial cuts, with several pushing for a firm commitment to review higher education accounts alongside other fiscal needs.
The nine Republicans on the joint committee, which includes both Assembly Ways and Means and Senate Finance, ultimately voted as a bloc to reject the motion to close the budgets without receiving such assurances from leading Democrats on Thursday.
“It's not just cuts to universities,” Sen. Ben Kieckhefer (R-Reno) said. “This is $25 million out of the College of Southern Nevada and $10 million out of the new med school, where we just graduated our first class and we're celebrating. It’s $1.2 million out of a college scholarship program that supports our lowest income minority students who are going to college for the first time in their families. I think we can do better, and I hope that we get there.”
Committee Democrats defended their decision in the same manner as they have throughout the session, pointing to the need to balance limited available long-term revenue sources against a bevy of needy programs.
Among those defending the cuts was Assembly Speaker Jason Frierson (D-Las Vegas), who pushed back on Kieckhefer’s assertion and said it was “a little bit frustrating when we paint a partisan picture” of difficult budgeting decisions.
“I always appreciate when there's a tough decision that we all of a sudden want to talk about minorities and low income and the most challenging,” Frierson said. “I think that we are in this together, and in particular on this committee, it requires that we make tough decisions and that we rely on each other.”
More broadly, Democrats chafed at criticism that they unfairly cut higher education budgets relative to other state funding needs. Instead, they said, NSHE institutions have received hundreds of millions in federal aid, including tens of millions more in direct aid for students, all while the state mulled how to fund other crucial areas such as K-12 education or critical health services.
“I've said this to almost every NSHE advocate and lobbyist that I have ever met with, that I appreciate where they are, [but] that if I have a choice between kindergarteners and college kids, I'm there for the kindergarteners,” Carlton said. “They need my voice, they need our voice.”
Carlton was also broadly critical of the opacity of the system’s budget, saying that much of its money was “behind a curtain” and that “sometimes it’s hard to make tough decisions on NSHE when you don’t have all the data.”
Carlton reiterated that her position on higher education cuts was not adversarial, but rather one that demanded “accountability and explanation.”
Democratic leaders also sounded off in frustration against charges that cuts implied they did not care about college students. That included Assembly Majority Leader Teresa Benitez-Thompson (D-Reno), who told the committee that “hard decisions'' made last year to cut NSHE’s budget came in part because it was well-funded per-pupil to begin with, and also because it could rely on investment-linked rainy day accounts to absorb much of the immediate budgetary damage where other agencies could not.
Though not specific, Benitez-Thompson’s comments appeared to reference a $50 million one-shot payment to institutions last June from a market-linked “market fluctuation account” traditionally used by NSHE to fund special projects or deferred maintenance costs.
“We do pretty well at this, so the accusation that we don't care enough or we don't do enough is always one that sits sideways with me, because I think it is factually untrue,” Benitez-Thompson said. “And I think that to paint this committee, any of us, as in a spot of being less-than-concerned about students is just hyperbolic rhetoric that does nothing to actually help us have sincere conversations.”
Speaking to The Nevada Independent prior to Saturday’s meeting, Clinger said he credited the governor’s office and the Legislature for building NSHE’s budget back up in the years following the great recession, such that per-pupil funding int he system — measured as funding per-full-time equivalent (FTE) student — is above the national average.
“If you look at it on a per capita basis, it definitely does not come out as favorable, because we unfortunately, don't have as many high school students going on to college, perhaps, as other states do,” Clinger said. “But the students that are in our system, which is what the FTE-basis compares, the state has done a good job of funding those students.”
Perhaps the greatest sticking point during discussions has been massive tranches of federal aid provided to NSHE through the Higher Education Emergency Relief Fund (HEERF). Created as part of the original CARES Act and boosted through additional funding last December and again through the American Rescue Plan, HEERF provided an early lifeline to universities, colleges and students nationwide that suddenly began treading water last year as revenues dried up overnight.
That was also the case in Nevada, where three rounds of HEERF money amounted to more than $369 million, of which roughly $160 million was set aside for direct student aid.
At multiple junctures this session, Democratic lawmakers have pointed to the HEERF aid as a key mitigating factor for NSHE, providing tens of millions in relief that was designed to help higher education institutions, specifically.
But nearly all of that money, according to an NSHE budget document shared with legislators this week, has been used by institutions to cover millions in lost non-state revenues such as reduced campus housing occupancy or lost parking fees.
As a result, NSHE and other higher education advocates have argued that the federal money through HEERF — though vast — would do little to help cover other losses.
“There are a lot of other impacts to the institutions sort of outside of the state operating budget,” Clinger said.
Clinger added that there are factors that may yet mitigate the severity of NSHE’s budget woes through the next two years, though.
Most notably, NSHE’s original estimated budget reduction was based on an assumption that non-state revenues, such as that from residence halls, will continue to remain sharply down from pre-pandemic levels through much of 2022 and into 2023.
Should the impacts of the pandemic recede faster than expected as vaccinations increase and health risks fall, Clinger said non-state revenues could bounce back sooner than current projections.
With positions restored, some challenges remain
As administrators and faculty await final word on budgets for the next two years, the restoration of hundreds of positions held vacant for the last year will likely kickstart efforts over the next year to rebuild the somewhat-depleted ranks of faculty and staff.
The restorations come at an especially crucial time for the state’s two universities, as each looks to maintain its designation among the top research institutions in the country.
In late 2018, both UNLV and UNR achieved a major milestone as each received a so-called “R1” designation from the Carnegie Classification of Institutions of Higher Education. A classification handed out to 130 universities every three years based on how much research is conducted at a given institution, administrators at both UNR and UNLV said the status came only after years of investment in research faculty, support and infrastructure.
But with few indications of the long term impacts of the recent cuts, the continuation of the Carnegie classification through the next evaluation period is not certain.
“You are only an R1 university as long as the last ranking that came out ranked you as an R1 university,” UNLV Provost Chris Heavey said.
Unlike nearly every other aspect of the university experience, research labs largely continued operations unimpeded through the pandemic. Working around mandated masks, social distancing requirements and other limits on operating procedures, UNLV Interim Vice President for Research Lori Olafson said research lab operations “didn’t have any unintended consequences related to the pandemic."
As much as the research itself was unscathed, however, the number of faculty across the system was a different story.
In an effort to curb hemorrhaging revenues, Gov. Steve Sisolak mandated steep statewide cuts early last year of 4 percent, with plans to cut an additional 16 percent through the next fiscal year (a number that rose for NSHE to 19.8 percent by the close of last year’s special session).
To comply with those cuts and in an effort to prevent the level of layoffs seen during the Great Recession, the Board of Regents pushed to approve measures for system-wide furloughs and hiring freezes as a means to dramatically reduce operating costs.
More than a year later, those freezes — affecting roughly 370 faculty positions across the eight NSHE institutions — are still in place, but now likely to be lifted after approval of the federal funding on Saturday.
“The practical implications of this would be that the hiring freeze would be lifted, sooner rather than later, so that staffing could be put in place for the upcoming school year,” Sen. Julia Ratti (D-Sparks) said on Saturday.
UNR Vice President for Research and Innovation Mridul Gautam said that the impact of those open positions stretch far beyond research programs alone.
“It's not just a research enterprise in isolation,” Gautam said. “They attract good graduate students, they attract good undergraduate students. Those undergraduate students graduate, and they tell their friends about it. And they come back, our enrollment goes up with good solid students, we can reach out and make education accessible to everybody … So every component is affected when we get resources and gets affected when we don't get the resources from the state. It's not just the faculty.”
Complicating matters further is the lingering issue of faculty compensation. Nevada faculty have complained for years that a recession-era limitation on merit pay — one that functionally eliminated any faculty merit raises for a decade — has limited upward mobility and made it difficult for some to justify rejecting job offers from other universities.
It’s a problem that predates the pandemic, and it’s one that remains difficult to address as Nevada’s higher education funding increases have generally trailed regional rivals in the long term, administrators said.
“Part of the reality is if you don't have a competitive pay structure for faculty, your most productive faculty leave because they get recruited away to other places,” Heavey said. “So we don't have a silver bullet solution to that but we think it's something that the state really needs to address.”
Lawmakers appear poised to approve a 1 percent pool of university funding that would be used to pay for merit raises. The move has been praised by faculty advocates, but still criticized in part because it falls short of the 2 percent state-funded merit pool that existed before the recession.
University professors — especially professional, tenure-track faculty — are far from the lowest-paid employees of any given university. But, UNR economics professor Elliott Parker said those salaries do not exist in a vacuum, and a sustained lack of pay increases in good economic times has eroded willingness among some to stick around through the bad.
“After a while, you kind of break the loyalty, and some of your best faculty will go,” he said.
Higher education institutions now also must face a new logistical problem — filling nearly 200 vacant positions across both UNR and UNLV that have been held open for more than a year.
Those positions are not necessarily static. Both UNR and UNLV are massive employers with more than 10,000 employees between them, pre-pandemic. As a result, Heavey described the vacancies as rolling, with the most pressing ones — those that may jeopardize the accreditation of a certain program — exempted from the freeze.
“The churn of positions within the university is very large,” Heavy said. “In a given week we might lose five people, and then we might say okay we're going to refill two. And now, because we've held so many vacant, now we're getting closer to a net-even or even starting to grow back a little bit in terms of the total number of faculty that we have.”
Dozens of the positions in question are for professional faculty, which, unlike classified staff such adjuncts or graduate student jobs, can only be filled after a months-long search process.
Kent Ervin, Vice President of the Nevada Faculty Alliance, said a number of searches planned at UNR this spring had already been canceled. However, if searches were to begin again this fall, according to Gautam, many would be complete by the start of the next academic year in the fall of 2022.
But lost in the debate over whether lawmakers will restore lost money, administrators said, is the possibility of boosting higher education funding in the long term — and the costs associated with not doing so.
A case in point, according to Gautam, was a lost opportunity to participate in a National Institutes of Health (NIH) program meant to speed the development of COVID-19 vaccines and therapeutics through clinical trials. UNR was initially approached by NIH for participation in the program in late November, but the university “didn’t have the infrastructure,” and potential research partners at Renown Health and the Veterans Affairs hospital were “busy with what they were doing.”
“Those things don't come to mind when we're when these cuts happen, because we're just trying to maintain the status quo and barely managing to maintain the status quo,” he said. “In fact, we’re falling behind — forget about advancing, or building things that we need to build in the state. Those things don't happen when these cuts come around.”