UNR Faculty Senate

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.

At President Glick’s town hall meeting today, somebody asked him for a comment on the Governor’s podcast defending his higher education budget. As it so happens, last night I e-mailed a reply, and it came back with an error message. This morning I sent the reply to Josh Hicks, his chief of staff. Here it is:

Dear Mr. Hicks,

I just read the text of the Governor’s podcast, and tried to reply to the address in his message, YOUR-OPINION-COUNTS@GOV.NV.GOV. It came back with a “No such user” message, so I hope my opinion can still count.

I am afraid that I must say the podcast was misleading. The Governor said that “Nevada spends more general fund tax dollars on higher education than most other states,” but this is not actually true.

A poor man spends a bigger portion of his income on food, but that does not mean that he eats more than others. Nevada’s higher education system gets a larger portion of its budget from the state, but that does not mean it spends more to educate its students. As a share of state GDP, Nevada has the smallest general fund in the country. Nevada is also 50th in the country in higher education spending as a share of state income, 50th in the country in the number of higher education employees as a share of population, at the bottom in the number of students who attend college, and below the national average in higher education spending per student, even though our cost of living is relatively high and smaller states typically spend more per student than big states.

In addition, most states also have some local government support of higher education, for community colleges. Nevada does not.

The Governor said that higher education has the ability to raise its own revenue, but this is misleading as well. It is true that our tuition is relatively low, and this has been a long-standing policy of the state as it tries to move up from the bottom in the number of students who attend college. The Regents can raise tuition, but if we tripled it next year we would not come close to filling the gap, as we would push out many of our students. Other revenues – like dormitory fees, tickets to sporting events, et cetera – go to pay expenses associated with those revenues, and do not generate substantial residuals. Research grants go to fund research expenses, and if we tried to spend those funds on instructional costs somebody would have to go to jail. Your administration’s budget would not increase those other revenues, but instead would decrease them. It will cost us our most productive researchers who bring in the most outside funding, it would scare away potential donors, and it will encourage our best students to go elsewhere.

It is a bit like trying to get in shape and lose weight by having your legs amputated.

The Governor said that he is proposing only a 36% cut, not a 50% cut, but this is also somewhat misleading. Yes, there is a 36% cut in the total NSHE general fund budget, but some programs within NSHE are left relatively untouched. Athletics, for example, did not have its budget changed much at all. But the cuts your administration proposed for the main campuses of UNR and UNLV are much, much larger than the average for the system as a whole. Relative to our total state GDP, the cuts are tiny – roughly a quarter of one percent – but relative to the total amount the university has to spend on instruction, the cuts are simply devastating.

To survive and prosper in a knowledge economy, Nevada must better educate its citizens. Regardless of his political disagreements with our Chancellor, the Governor must see that a good university system is crucial for our future.

Sincerely,

Elliott Parker
Professor of Economics
University of Nevada, Reno

Since last summer the governor has told the Nevada System of Higher Education (NSHE, that includes UNR) to plan for a budget reduction. Some of that reduction has taken place, and we have lost valuable colleagues, student and faculty services and funding support. Since the beginning of the budget discussions the UNR administration has never known the exact or even approximate amount of budget cut for which to plan. The chancellor has exerted control over the message from NSHE to the governor, legislators, the public and, to some degree, even within the campuses themselves. In spite of that, President Glick has tried to keep the campus informed with his town hall meetings. However, even at those meetings he could not provide much detail because the magnitude of cuts was still unknown. It wasn’t until a special December Board of Regents meeting a budget reflecting a 14% reduction went from the Board to the Governor. The Board would not send budgets reflecting even deeper cuts as the governor requested because the methodology used to plan larger cuts would have to be different from that used to plan a 14% cut. Our campus has been working towards that general figure since last summer, but still that figure was a guess.

Well, the governor’s state of the state budget message Thursday night removed the ambiguity about the magnitude of the cuts. Nearly 75% of the state shortfall has been targeted to Nevada higher education. (See  http://www.lasvegassun.com/news/2009/jan/16/jon-ralston-cutting-educations-nose-spite-rogers-f for some speculation about the reasons for specific targeting of higher education.) The budget details are contained in about 3,000 pages of budget information, but the bottom line is that UNR as a whole is targeted for a 36% budget cut. The governor’s budget targets for the University itself (not counting the medical school, athletics, etc.) approaches 50%. While I personally believe the legislature will not pass a budget that severe, the cut will be somewhere between 14% to 36%. I’d like to be wrong about this, but it will take a creative legislative plan to addresses the revenue shortfall inflicted on higher education.

Where Are We Now? 

There is an upcoming pre-legislative hearing where we may get an indication of how disposed the legislature is to redress this effort to dismantle higher education. There is also a Board of Regents meeting February 5^th -6^th where a Board with three new members will try to delineate a strategy for carrying our case to the legislature and probably start discussing contingency plans. On February 12^th, President Glick will host a Town Hall where all are invited to provide input and ask questions. I will announce coffee meetings open for interested faculty to talk directly with me informally and directly. New information and rumors will be unfolding at an ever accelerating pace as the legislative session moves forward. If you have not been reading the chancellors weekly missives (you are the only person in Nevada spared), you know that he states that 54 of the 63 members of the legislature have indicated some level of support for NSHE and higher education. It remains to be seen as to whether these statements will translate into any kind of meaningful action.

It is simply impossible to be anything but outraged by the governor’s disregard for the NSHE, the mission, the faculty, the students, and economic contribution the university makes to the state. The tone of the conversation has changed. This budget is both a blow to the health of our university and an insult to the hard work of all the members of our university community. The decision to gut NSHE while touting economic diversification is absurd. To ignore the economic contribution of the university is an astounding oversight. To advocate that a tuition increase can address the problem requires that one thinks students can’t multiply. If we passed this shortfall onto students, tuition would increase from about $4,000 per year to about $13,000 in the fall. Arguments that there is no need for a comprehensive university implies Nevada has no role in the generation of knowledge, no shortage of the sophisticated workforce new energy technologies require and no shortage of synergies between innovation and industry – all incredibly uninformed positions.

Every individual faculty member has the right to make whatever political statements he or she wishes. I am sure many of you are intending to enter into the public political discussion. There will be coordinated efforts by various parts of the university community to speak out to legislators and communicate a coherent message about Nevada higher education. There will be some coordinated activities on campus and in Carson City. I think one thing that might be particularly effective is for those of you who know legislators to call them and respectfully make whatever argument you believe will be most effective. Direct contact can be extremely useful and is the least easy feedback to ignore. Phone calls are meaningful as well. It is the legislators who will have to propose an alternative budget and vote in large enough numbers to override the likely governor’s veto. If you have any contacts or have influence yourself, now is the time to use it.

In my next blog I will describe the importance of participating in campus planning for how to allocate our resources so that we can make the best decisions possible about how to deal with whatever cuts eventually do emerge. In the meantime, this message is primarily to tell you that if you want to share any strategies or ask questions, the senate office is at your disposal. I think coordinated activity is likely to be better than uncoordinated effort, but each of you must decide how you want to represent our university’s interests.

Bill Follette
Chair, Faculty Senate

In his budget proposal, Governor Gibbons claimed that Nevada pays a relatively high share of its General Fund expenditures on higher education, and so he proposes balancing the state’s revenue shortfall by cutting higher education spending by more than a third. The proposal cuts UNR’s instructional budget by half, and UNLV’s by more than that. Oddly enough, the Governor proposes hardly any cut for our athletics budgets, so our students will have football games to attend but no professors to take classes from.

One of my own professors once handed me a book called “How to Lie with Statistics.” The point of the book, of course, was to teach us NOT to do that, and how to recognize when it is being done by others. One of the lessons I remember was that if somebody wants to make a number look relatively big, they will divide it by a number that is relatively small. So when I heard the Governor’s statistic, I was skeptical.

First, how much are we talking about? During the last budget go-round, General Fund expenditures were roughly $3.3 billion per year, which sounds like a lot until you learn that the Gross State Product of Nevada was $130 billion dollars. State support of higher education totaled about $830 million, about 0.65% of state output. For those who claim higher education spending is out of control, two decades ago this share was 0.62%. Governor Gibbons now proposes a cut of 36% to this amount.

That is, to avoid having to come up with a tax equal to a fourth of a penny on each dollar we earn, Governor Gibbons is willing to destroy Nevada’s system of higher education.

And don’t kid yourself, because that is what this will do. Even if the proposal is dead on arrival in the Legislature, as I expect it will be, and even if he only made the proposal to poke a stick in Chancellor Rogers’ eye, Governor Gibbons has damaged us. Many of our faculty are distraught by this attack. We compete on national markets, and those faculty best able to find jobs elsewhere – our most nationally recognized scholars – will be among the first ones who leave. We have also been trying to keep our best students in Nevada, but now those who have been accepted at out-of-state schools will think twice before staying here, and when they leave, they won’t come back.

So what about the Governor’s preferred statistic? I already knew that Nevada has the smallest number of state employees as a share of state population, and the smallest share of state expenditures as a share of state output. But when I looked it up, I also found – for the most recent year that comparable data was available – that Nevada’s General Fund as a share of the state economy totaled only half of the national average, and was the lowest of the 50 states. Divide any number by something that small, and it will somehow appear bigger.

Let’s put the size of higher education in more meaningful proportions. As a share of our economy, our total expenditures on higher education are 50th in the nation. Because our net tuition revenue is relatively low (though California’s is lower), we are not actually the lowest in educational appropriations from the state, but these appropriations are still a fifth less than the national average. Relative to population, we are also 50th in the number of employees in higher education, and a third fewer Nevadans are enrolled in higher education than in the rest of the country. Take more than another third from that, as our Governor proposes, and we become a third world country. If you care about Nevada’s future, it is time to put your foot down and say, “enough!”

Elliott Parker, Chair-Elect

Regent Cobb said to us on his last visit that we should get more involved in trying to get our story out. I have been doing this the last month or so, and thought senators might want to know what I’m saying on their behalf.

The memo I wrote to Milt on 12-1 got sent around the state by the Chancellor. I wrote an Op-ed column in the Reno Gazette Journal, titled
Small government can hurt growth.

and another in the Las Vegas Sun, Does our state government have a spending problem?

Former Senator Bob Beers wrote a “rebuttal” in the Las Vegas Review-Journal the following week: http://www.lvrj.com/opinion/36798264.html

And I wrote a reply in the Sun:
How much more state government can be cut?

I also wrote another memo to Milt on Jan. 1 regarding a look at state budgets over the last couple of decades, and another today to answer a number of people who said I should also offer solutions. Both are on my website, at http://www.business.unr.edu/faculty/parker, but in the latter memo I made clear I was NOT speaking as chair-elect, since some of my suggestions were likely not to be shared by others, including Bill — he told me so himself.

Elliott Parker, Chair-Elect

Click link below to access a memo written by Dr. Elliott Parker to Presient Milton Glick.

parker_memo_12-1-2008rev

Bill Follette, Chair Faculty Senate 2008-2009

I applaud the administration for calling us together to keep us up to date on what steps have been taken to address the budget challenges we are facing. In some ways there is no readily foreseeable good time for a Town Hall meeting. Let me recap some recent events. In a recent emergency session of the Board of Regents Investment Committee the investment income amounting to about ½ million dollars for UNR each month was suspended because of market conditions. That was on top of other budget reductions we have had to implement. The governor has asked state agencies to plan scenarios for 4, 7, and 11 % cuts for the remainder of this fiscal year to deal with the estimated $300M revenue shortfall.

Then the election occurs. Both houses in the Nevada legislature are now democratic. Private negotiations have been going on with the governor and legislative leaders and some rumors of a plan appear in the press, but details are missing. A special session of the legislature is being called though the actual specifics of the proclamation have not been set. So far there is no specific tax restructuring on the table for the regular session to consider, but there is a shift in the public dialog about considering an alternative tax structure. The governor says that everything is on the table though a close reading of his statement means everything if there are enough votes to raises taxes which coincidentally is the same amount required to override his veto. The Economic Forum meets today to make its budget projections. In the meantime, budget cuts being considered range from the 14% we have previously discussed at other Town Hall meetings to figures as high as 33% for the next biennium.

Back on the home front, the Chancellor continues to send his missives insisting that not only is a budget reduction for NSHE not possible, but a 10% increase is required. The Chancellor’s multi-point plan to address the state shortfall may have been set back by a slight misunderstanding when he asked Senator Reid for $3B which the senator misheard to be $3M, thus putting a crimp in the Chancellor’s plan since the senator said $3B to Nevada isn’t happening.

Later this week there is a Board of Regents meeting in Las Vegas during which new information may emerge. The budget is now a standing item on the agenda. The agenda listing allows for discussion and unspecified action by the Board. After the first of the year there will be four new regents, two of whom will be appointed by the governor.

All the while the Chancellor conveys a clear message that to plan for budget contractions is a sign of weakness, and that he doesn’t want the NSHE presidents to discuss plans for addressing budget reductions beyond those required so far this year. That may be the case, but it doesn’t take a psychologist to read the mood of the faculty who keep wondering, “What plans are being made to deal with these problems?” Planning for a storm doesn’t produce one, and as FEMA has learned, there is a downside to having no plan to communicate to those who might someday be affected.
The last time we met in this format, we were contemplating a 14% reduction. Now, the target is never the same two weeks in a row. The fact is that plenty is being done with as much transparency as possible.

• The provost is completing the review of the 41 centers on campus.

• Departments are completing their teaching resource management reviews.

• A committee has been formed to restructure the resources needed to replace and perhaps improve the functions provided by the math and writing centers.

• Several advisory groups have been formed to identify improvements to be made to strengthen the ability of the faculty to meet and expand the research enterprise of the university.

• The faculty are actively looking for alternative ways of funding research and programs through competitive grants.

• Meetings are occurring with student leaders to get their input on the Chancellor’s proposal for tuition increases.

Shortly the entire faculty will be involved with updating a brief, and I emphasize brief, update of our institutional strategic plan, and the academic master plan. It is important that the faculty be involved in this process because these documents are intended to define our institutional mission for the next several years. At the heart these documents are an unwavering support for UNR to maintain its research extensive status, preserve our strongest program, and to every degree possible protect our tenured and tenure track faculty because those are the only resources that can provide all the components that make our institution unique in the state.

These are difficult times. Peoples’ lives are affected, roles are changed, and hard decisions have been and will be made. The faculty senate has made what we think are improvements in the reconsideration and grievance procedures should one need to invoke those processes. Several faculty members have provided expert input into the discussion about costs and effectiveness of decisions about higher education in this state. I have seen faculty and administrators try to come together to communicate clearly about any concerns being voiced. We are all concerned about the future, whether it be about the well-being the university community, the health of state, the misfortune of colleagues, concern for the safety of a friend losing a home, or changes to the retirement and compensation system of the state.

As senate chair I have instituted a blog. So far, I have only posted limited messages to it. My reticence towards posting more has been out of deference to the Chancellor preferring to control a united message for the system. However, it is time to increase the communication between us. I will post a message at least every two weeks to which all are invited to respond on the blog itself, directly to me, or the senate office. I cannot promise that there will be earthshaking information or even consistent information given the degree of change we continue to face. If you have questions, you can use the blog as a place to ask. If I don’t know the answer I’ll try to find out who does.
This is a time where it is easy to become mistrustful. Many of you will remember a poster from the 60’s saying “Just because your paranoid, doesn’t mean they’re not out to get you.” So far in my experience those in leadership are trying to protect our university to the best of their ability and paranoia serves no purpose. You can be curious, questioning, critical, or better yet involved as much as possible.

Let me end with a quote by Mark Twain that seems appropriate for our times:

It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.

So ask questions. Listen closely to answer. Participate in the discussions. Thank you for your attention and the many comments of support you have sent.