UNR Faculty Senate

The Faculty Senate of the University of Nevada, Reno supports the following recommendations for the Board of Regents:

1) We ask that the Board of Regents modify the current policy on furloughs, and extend exemption from mandatory furloughs to those professional employees paid with grants, contracts, fees or other non-state sources if the revenues lost are greater than the salary savings, as long as these revenues cannot be captured in other ways.

2) We ask that the Board of Regents delegate the implementation of this policy to the presidents. The presidents should then be required to report back to the Board of Regents on all such exemptions, detailing why their decisions to exempt certain faculty meet the above conditions.

This sense of the senate was adopted by unanimous vote.

Our rationale is as follows:

It is clear that the Legislature’s primary intent in SB 433 was to reduce Nevada’s general fund expenditures for the current biennium. As much as possible, the Legislature also wanted to be fair, to have the burden shared equally, to expect less work in return for less pay, and to save as many jobs for state employees as possible during the budget crisis.

Second, the Legislature clearly understood that the Nevada System of Higher Education was a special and complicated case, and gave the Board of Regents the flexibility to institute pay cuts in other ways if necessary. The Regents are doing their best to support the legislative intent while making adjustments for the differences in faculty contracts, tenure and notice requirements, and this is in the best interest of NSHE in the future.

Third, the Governor also made clear that part of the reason he thought higher education should receive the lion’s share of the budget cuts was because NSHE had more options for seeking outside funding, through tuition, grants and contracts. DRI is one example, but not the only one, of this entrepreneurial model. While the Governor’s budget proposal was not feasible in the short-run, we do agree with the long-run goal of becoming more reliant on grants and other non-state funds.

Thus, we support the current emergency policy of the Board of Regents as long as we remember that the first priority of furloughs is to save the state and the system money. Some furloughs, however, do not accomplish this goal.

We strongly oppose mandatory furloughs for faculty who are entirely grant-funded, unless the funds used to pay their salaries can be used for other purposes without putting the grant or contract at risk. We also oppose mandatory furloughs for other faculty who bring in direct revenues to the institution that at least equal the cost of their associated salaries, even if some portion of their salary is paid with state funds. Such furloughs cost us money that could be used for other purposes. We believe that such furloughs also undermine the goal of becoming less reliant on the state general fund.

The Regents have already agreed that grant-funded faculty at the Desert Research Institute should be exempted because furloughs would be costly to the institution and the system. The University of Nevada School of Medicine is also prepared to request their own exemption based on the health and welfare clause of SB 433, since a furlough means fewer patients will be seen, and lost practice plan revenues will far exceed any salary savings. The state’s universities both have units, and individuals, who work on the exact same business model as DRI and UNSOM. The best solution is to have one simple exemption that fits DRI, UNSOM, and all other cases, something that we can easily explain to the public and the legislature, instead of two or more different exemptions.

The principle is simple, and any citizen or legislator can understand it. The purpose of a furlough is to save the state money, and the budget crisis is driving it. If there are specific and defensible cases in which a furlough will actually cost the state money, then a furlough should not be required regardless. System presidents should be given the authority to make those calls, and be accountable to the Regents for making them.

[Note: The town hall was actually on July 23. I looked at the wrong week on my calendar. Summer is passing so quickly!]

When the Governor proposed cutting the university’s budget by more than a third, he also proposed a 6% pay cut for all state employees. The budget reductions the Legislature actually adopted are still painful, and have cost us good people, but they leave the university standing. The pay cuts are supposed to be in the form of 4% furloughs, though to leave our benefits intact these cuts actually work out to 4.6%, one day a month.

In essence, furloughs are the Legislature’s way of saying that state employees are worth what we pay them, and not overpaid, but we still can’t afford them right now. The taxpayers and the students have also been asked to pony up, so we are not bearing the cost alone.

There is no way to make the financial burdens placed upon us all seem less stressful. However, it may be helpful to remember that it could have been much worse here, and for some states it is much worse.

But the details of furloughs are hard to implement, and furloughs don’t make sense in all cases. The Legislature ordered them for those employees under their direct control, including those in the classified system, but they left it to the Regents to determine how to implement them for faculty.

One issue the Legislature did not consider is how to handle classified employees who work on grants or in revenue-producing activities. Furloughing those who are not paid out of state funds actually costs the state money instead of saving it.

In June, the Regents passed a policy to implement furloughs, as the Legislature intended, as fully as the Code and our contracts allow. But untenured faculty, whether academic or administrative, have annual contracts that, under the current Code, require a year’s notice to change. Tenured faculty have contracts that guarantee them their jobs and their current salaries, and these cannot be changed easily at all.

The result is that hourly employees who earn the least are having to take the biggest pay cuts, in percentage terms. Our untenured faculty are also having to take the cuts, though with a year’s notice. Many of our young tenure-track faculty are trying to manage very large student loan burdens. And our tenured faculty, who are most likely to have research and grant programs that generate non-state funds, are instead being asked to teach more under the current conditions.

The President and I are still trying to persuade the Chancellor and the Regents that we should not have mandatory furloughs for grant-funded faculty, or for any faculty if the furlough costs us more revenue than it saves us. I would make this argument for classified staff too, if the law allowed.

It is normal in times of extreme scarcity for people to turn on each other, as the Donner Party demonstrated. We should not fall into the same trap here. We are all important to the success of this university, academic faculty, administrative faculty, and classified staff together.

In the last month or two, a number of tenured faculty have expressed their great concern to me concerning how mandatory furloughs have been implemented, and the unintended unfairness of our least-paid employees take the biggest percentage cut. It is not what we would have chosen, had we had the choice. It is certainly not what the President, the Provost, or the Faculty Senate wanted (see our “Sense of the Senate,” http://facultysenate.blogs.unr.edu/2009/05/08/sense-of-the-university-of-nevada-reno-faculty-senate-regarding-pay-cuts-for-faculty-and-staff, on this blog).

For tenured faculty who are able, one suggestion is to donate to the Foundation. Last week, I went down to the Foundation to set up a monthly deduction equivalent to the pay cut I would have received had I not been tenured. It was pretty easy, and I will send the form to all faculty.

You can target your donations, to a great degree. The Foundation has a scholarship fund for classified staff to take courses for career development, for example, and they are looking into setting up a fund to help with scholarships for their dependents. You can donate to your department or college, if you prefer, and chairs can use these funds to help out with travel or research expenses for untenured faculty. Within some constraints the Foundation is happy to negotiate with you on how you would like the monies spent. There are rules we have to follow if we want these donations to be tax deductible, but there is flexibility there too.

Of course, these contributions are voluntary, and people can help in many ways. Some of us may prefer to give more to the homeless, or those who have lost their jobs in the current recession. Some of us may have been hurt too much in the current recession to give anything more.

But knowing and appreciating the faculty as I do, I fully expect that there are scores, even hundreds of people out there who are willing to step up to do things to help their colleagues and coworkers in these trying times. Our people will continue to be generous and creative.

Please feel free to contact me with any ideas or questions you might have, at facsenchair@unr.edu.

NSHE News
Las Vegas, Nevada - June 19, 2009

The Board of Regents took action today to implement legislatively required budget reductions through the use of an employee furlough program and temporary increases to student fees.

Based on recommendations from Board Chair Michael Wixom and Vice Chair Jason Geddes, the Nevada System of Higher Education will implement general professional personnel cost reduction measures in FY 2010, followed by a mandatory furlough program in FY 2011 to reduce professional staff and faculty salaries with an option for an increased workload for tenured faculty. The aim of the program is to meet the intent of Senate Bill 433 which calls for a four percent reduction each year of the biennium. This program will not affect part-time teaching faculty.

Classified staff have already received a legislatively mandated furlough program of one day per month for FY 2010 and FY 2011.

In addition, a five percent surcharge (as referenced in Option A of the Board agenda) will be added to student fees for each year of the biennium (five percent in FY 2010 and an additional five percent in FY 2011) starting with fall semester 2009.

The surcharge will not be effective until the spring semester of 2010 for Nevada’s four community colleges: College of Southern Nevada, Great Basin College, Truckee Meadows Community College and Western Nevada College.

All surcharges will sunset in 2011.

Regents heard testimony from faculty and student leaders about the proposed options, with students voicing strong support for Option A in the fee increase proposal.

Due to the timeline dictated by SB 433, the Board passed an emergency motion to implement the personnel cost reduction measures. The Board then has 120 days to make the reductions final and to make changes in the program if the need arises.

Specifics on the furlough and workload increase programs are expected to be communicated to NSHE employees in the next several days.

Below is the motion that was unanimously approved by the Board of Regents today:
1. The adoption of Option A–a temporary surcharge for registration fees as set forth in the tuition and fee increase reference materials;
2. The adoption of a Code amendment set forth below which is subject to the considerations numbered 1-7 set forth at pages 3-4 in the Memorandum of Chair Wixom and Vice Chair Geddes, dated June 17, 2009 to the NSHE Regents, entitled “Senate Bill 433″ Implementation Recommendation”; and
3. The adoption of an emergency amendment of the NSHE Code (requires 7 votes and is immediately effective for 120 days, to be made permanent by further Board action), in accordance with Title 2, Chapter 1, Sec. 1.3.3.b due to the 2009 Legislative budgetary action and NSHE faculty contract provisions. The proposed amendment to the Code is the adoption of a new Code provision added to Title 2, Ch. 5, as Section 5.5.7, as follows:

Notwithstanding Title 2, Section 5.4, as the 75th Session of the Nevada Legislature has explicitly appropriated a lower amount for NSHE salaries than would otherwise be authorized and appropriate according to the NSHE salary policies, the Board of Regents does hereby and for the 2009-2011 biennium only, temporarily reduce salaries through the use of unpaid leave in an amount equivalent to the amount of legislative salary cut for FY 2011. The Board shall, to the extent feasible, devise methods that protect base compensation and benefits and shall offer tenured faculty an alternative of unpaid teaching workload increases in lieu of unpaid leave. The various Presidents shall consult with their respective faculty senates regarding the implementation of this section. Unpaid leave or temporary workload increases required by this section are final and not subject to appeal, grievance or reconsideration. The provisions of this section shall constitute constructive notice to all faculty and no individual notice to any such faculty member shall be required hereunder to implement the foregoing. To the extent any conflict or inconsistency between this and any other section of the Code exists, the provisions of this section shall control. This section will terminate on June 30, 2011.

The faculty of UNR are grateful to the Legislature, the Board of Regents, and the citizens of this state for their efforts to defend higher education from a devastating budget reduction that would have effectively dismantled the NSHE system into the indefinite future. We also want to express our admiration for our students for recognizing that the education they receive is valuable, and appreciate that they are willing to pay more to help us keep providing it.

We recognize that this proposal represents serious work by many people, in an effort to balance what the Legislature wanted us to do with what we can legally do and what is wise to do. We know that the Regents are doing their best to balance these demands.

For legitimate legal reasons, this proposal gives tenured faculty the option to increase their work responsibilities instead of taking the pay cut, but this option is not given to others.

In the last several days as I have been getting input from my constituents, I have noticed a pattern. Those who were most concerned with the apparent unfairness of this – including myself – are themselves tenured. Those who were the least concerned about it are themselves untenured.

As I worry about the morale effects of separating out our faculty for differential treatment for legal reasons, it brings me great comfort to know that many of our people are so unselfish, and so concerned for their colleagues.

Still, in my opinion, it would be a good idea to give more people the option to do more, and not just require them to do less. Please consider whether the options this proposal makes available to tenured faculty might best be made available to others.

Faculty at my university are willing to do their part, and most of us are not opposed to temporary pay cuts if the Regents deem them necessary, but we want them to be done carefully because we are concerned with negative unintended consequences.

The Legislature recognized in SB 433 that NSHE was a special and complicated case, and gave the Regents the flexibility to institute pay cuts in other ways. We need to take this opportunity to make sure that we are taking the wisest path.

This proposal explicitly exempts DRI’s professional staff if they are entirely funded by grants. We strongly support this. What we would ask you to understand is that there are units at UNR that are exactly like DRI, and I assume these exist at UNLV too.

The Terawatt Facility and the Center for the Application of Substance Abuse Technologies, for example, both depend entirely on grants. There are also many research programs within departments that greatly augment their budgets and their support for students through extramural grant activities, and provide additional overhead for the university.

Making them take furloughs out of a sense of fairness simply hurts our budgets and our state economy, with no savings to NSHE or the state budget. Some may lose grants or contracts they can no longer fulfill, and most will reduce the amount of overhead that they bring to the university.

Some of you work for law firms, or other similar professional firms. Suppose the office manager has reduced the wages of the secretarial staff because of budget problems. To be fair, your office manager tells you that you must also work less and reduce your billable hours. It seems to me that that would only make the firm’s budget problem worse.

The UNR faculty senate overwhelmingly supported a resolution to apply reductions in state support only to state-funded salaries. At least, we should allow our Presidents to exempt some of our people from salary cuts if no savings would result. The principle that exempts DRI is equally applicable to similarly-generated funds at any of the NSHE institutions.

One part of the rationale for making higher education absorb most of the state’s budget reduction was that higher education should and could be more entrepreneurial, more like DRI, and less dependent on state funding.

Thus, I think we may be missing out on an opportunity. There are potential outside resources now available to many of our people. Now is the time to develop creative policy that empowers and incentivizes faculty seeking these resources, but we have rules that undermine some of the incentive to go after them, and these salary cuts will make it worse. Let us take this time of crisis to encourage our people to apply for more grants and contracts, to allow them the opportunity to make up for the reduction in their state funding, and to encourage more entrepreneurship by our faculty.

These changes should be left to individual institutions that can best understand and balance their missions and opportunities to meet the budget challenges. The Board can and should frame the parameters to consider, but ultimately our response to SB 433 should be measured by how thoughtfully we meet our missions within the budget constraints we face rather than following a literal reading of the bill.

During this fiscal crisis the Board of Regents has continued to respect the leadership and autonomy of the NSHE institutions in meeting the extraordinary budgetary challenges of the past year. The Faculty Senate of the University of Nevada, Reno urges the Board to continue to allow each institution the opportunity to approach these challenges in ways that preserve the primary missions of the institutions with the least possible impact on faculty, students, and staff.

The Faculty Senate of the University of Nevada, Reno opposes financial exigency as both unnecessary and damaging to the reputation of the system. We similarly oppose either suspending or hastily modifying the Code.

In meeting these economic challenges, it is the shared value of our faculty that salaries should not be reduced if these cuts do not result in real savings for NSHE. In particular, salaries funded from many non-state sources should be exempted from reductions that may be deemed necessary to meet budgetary goals. Such reductions would be harmful to the research and economic diversification goals of the NSHE institutions, and harmful to the economy of the state.

Dear Senators:

The budget for higher education finally closed yesterday evening, with a 12.5% reduction overall for NSHE’s state-funded operating budgets. This is relative to our budgets for 2008-2009, which were set by the previous Legislature. This cut is only a third of what the Governor requested, and it will require that the Legislature find the offsetting revenues, that they pass the budget by May 21, and they are able to override the Governor’s probable veto.

There is a Regents meeting tomorrow, which Milt and I will participate in, and we will give you more information once we know more. In the meanwhile, here are some things you should know.

First, the university is already much of the way there already, because the Governor already requested budget cuts this past year, and because we have been preparing for this. It also should include any pay cuts or furloughs, though there are constitutional issues regarding whether or not NSHE can be forced by the Legislature to cut pay, and legal/contractual issues regarding whether NSHE can cut our paychecks unilaterally without a notice period.

Second, there are some tuition increases that are being planned, but these are not dramatic in nature relative to those we have already had, and these tuition increases will be allowed to offset some of the budget cuts for us, rather than just going back to the Legislature as is usual.

Third, it is a complicated matter, using enrollments, the formula, and raw politics, to determine how much of a cut each institution will receive. UNLV has experienced a fall in enrollments recently, from which they will mostly be held harmless, and CSN has grown considerably more than we have. I can’t yet say exactly how much we will need to cut for a couple of days, though we have a good idea already.

Finally, you should know that we have been working with the President and the Provost to prepare for this decision, so if we need to have a curricular review to consider cuts to academic programs and tenured positions, you should feel confident that faculty governance and the Senate will play a key role in any decisions.

By the way, if budget discussions leave you a bit bewildered, Bruce and I wrote up two documents to explain them, which I have linked on my website and you might want to peruse:

University Budgets: A Guide for the Perplexed (Mar. 23, 2009).

Funding, Fairness, and the Formula: The University of Nevada, Reno, in the System of Higher Education (Apr. 17, 2009).

Best regards,

Elliott Parker, Ph.D
Faculty Senate Chair
Professor of Economics /0030
University of Nevada, Reno
Reno, NV 89557-0027 U.S.A.
http://www.business.unr.edu/faculty/parker

The Nevada State Legislature is currently proposing that pay cuts for state employees be part of budget reductions for the 2009-2011 Biennium. On May 6, 2009, the Faculty Senate of the University of Nevada, Reno passed the following three resolutions regarding the sense of the senate, should there be a mandate to cut wages and salaries due to budgetary constraints.

1. While some have suggested that all employees be subject to a uniform policy for symbolic or historical reasons, it is the strong sense of this senate that any portion of faculty salary and benefits from non-state funded sources should be immune from reductions to state-funded salaries. Faculty and staff who are funded entirely from sources other than state funds, such as grant-funded researchers, should be exempt from reductions in pay if they are able to maintain current or projected salaries using such funds. We believe that it hurts the university and the state if we turn away income that costs Nevada taxpayers nothing. We also believe that any policy that reduces the incentive for seeking extramural funding is antithetical to the long-run goals of the university.

2. Next, it is the sense of this senate that reductions in full-time equivalency (FTE) or other similar approaches are strongly preferred to reductions in the base rate of pay. Reducing FTE makes it easier for some faculty to make up lost income through other sources such as grants and contracts, it ties pay to performance expectations, and it allows incomes to be more quickly restored once revenues recover.

3. Finally, it is the sense of this senate that the Legislature and the Nevada System of Higher Education should allow the university to determine how funds are cut, and if wages and salaries must be cut then the university should be allowed to reduce average pay, rather than requiring uniform reductions across the board. Such flexibility should strive both to protect lower-salaried faculty and staff and to serve the long-run goals of the university.

On January 20, 2009, the Faculty Senate of the University of Nevada, Las Vegas, passed a “Sense of the Senate” resolution on health care benefits. Soon thereafter the NSHE System Administration Faculty Senate also proposed a Resolution on Health Care Benefits. These resolutions called upon the Legislature to reject the Spending and Government Efficiency (SAGE) Commission recommendations, and pointed out a number of possible negative consequences of these proposals. The UNLV Faculty Senate argued that some of these consequences would also result from the proposals of the Public Employee Benefit Plan (PEBP) Board proposals, even though these latter proposals were much more deliberate in approach and reasonable in scope.

The UNR Faculty Senate recognizes that current and past employees entered into an employment agreement with NSHE with a reasonable understanding that the extant health care plan was a fair representation of what could be expected now and into retirement. Given that a significant change in one’s health cannot reasonably be budgeted, predictable health benefits are fundamentally important to someone making an employment decision.

In light of the emerging national conversation about health care funding, at this time the UNR Faculty Senate opposes any changes in employee health care plans in response to a short-run revenue shortfall. The rising cost of health care, the past promises of the state to its employees, and the new Government Accounting Standards Board (GASB) rules requiring these obligations to be made explicit are problems shared by all states. A nationwide dialogue needs to take place in which Nevada participates, but unilateral and precipitous action in the absence of a nationwide strategy will unfairly shift risk towards those unprepared to bear it, leave retirees without alternatives, and impair our ability to retain our best faculty, professionals and staff and compromise our ability to recruit the best new employees to replace those who retire.

Related Information:
unlv-sense-of-senate-on-health-care-benefits
sa-senate-resolution-on-health-care-benefits
The Sage Commission recommendations can be found at the link below:
http://www.sagenevada.org/recommendations
The PEBP Board recommendations can be found at the link below:
http://www.pebp.state.nv.us/informed/brdpkts/2-5-09Transcript.pdf
pebp-november-2008-recommendations 

measuring-success1

The slides presented by Milton Glick at the February Faculty Senate Meeting can be accessed via the link above.

By far the biggest reason citizens of all 50 states support their public universities is because university educated young people become inventors, skilled professionals, artists, social scientists, ethical businesspeople, and so on, making our society great.

But when budgets are tight, it’s reasonable to ask how taxpayer support for a university compares on a purely economic basis with tax relief, for example. Nevada taxpayers spent approximately $209 million dollars on the University of Nevada, Reno last year. That state allocation, plus student tuition, fees, and payments for research conducted by the faculty made up a budget of $511 million. Two‐thirds of that budget was spent on wages and salaries, and UNR employed about 4,600 people in Washoe County. UNR is the second largest employer in the county after the Washoe County School District.

Economists at the Center for Economic Development (UCED) calculated the effect on the economy of Nevada if the budget of the University of Nevada, Reno were to be cut by the proposed $73 million in state support. As we know, one person’s spending is another person’s income. The person who earned that income spends some, too, supporting the income of yet another person, and so on. The ‘circular flow’ of spending, income, spending, income, and so on is formalized mathematically by what is called an “input‐output” model. Here is what the mathematical model shows:

• A cut of $73 million in state funding for the University of Nevada Reno, coupled with a proportional reduction in the faculty’s ability to bring in externally funded research contracts, amounts to a $99 million reduction in state value added (or state “GDP”) and 1,288 fewer jobs.

• Alternatively, if Nevada taxpayers were to raise the $73 million, and we all have less to spend on goods and services, this would also lead to lower economic activity. $73 million in taxes paid (ultimately) by households amounts to $39 million less value added (state GDP) and 534 fewer jobs.

• The net effect of putting the $73 million into UNR rather than spending it as usual on goods and services is $60 million more state GDP and 574 more jobs.

Why does the state get more jobs and income when it finances its universities than it does the other way? One, because university faculty bring even more money into the state by doing research and other projects. Without state support, however, faculty cannot accept ‘matching grant’ contracts, for example. Two, a much larger proportion of UNR’s revenues goes directly to Nevada employees. Nothing goes to dividends, profits, royalties or rents to out‐of‐state stockholders, CEOs, or proprietors.

In contrast, a big part of what is spent on a new car or new flat‐screen TV goes out‐of‐state to the factory and company that made it. Some of the retail dollar also goes to pay rents, profits, anddividends, also sometimes out‐of‐state. A much smaller portion of a retail dollar goes to salaries for local employees. A much larger portion of a dollar spent on UNR goes directly into Nevada household income. Spending on UNR keeps much more money ‘coming around and going around’ in our local economy.