Budget Reduction Principles

February 5, 2010

Principles for Budget Discussions
Bill Follette, Chair of the Faculty Senate 2008-9

Endorsed by the Faculty Senate of the University of Nevada, Reno
June 5, 2008

Earlier this year Governor Gibbons required a 4.5% budget reduction for UNR. Following consultation with the Faculty Senate leadership, President Glick introduced strategic cuts that were governed by a set of principles that were largely in agreement with the following paragraph distributed to the senate in a memo from Steve Rock, then Chair of the Faculty Senate:

The Executive Board agrees with the principle that the teaching and research enterprise are the core missions of the university and must be protected. We further agree with the principle endorsed by past faculty senates affected by budget crises, that faculty should take steps to preserve jobs where possible. In fact, the Senate has supported delaying merit raises under similar circumstances in the past. The Executive Board sees the delay of merit as a rational way for the faculty to participate in solving UNR’s short-term budget contraction while minimizing damage to both our core mission and the long-term interests of the faculty.

Using the delay in merit, some strategic administrative restructuring, a giveback by the Board of Regents involving Project Integrate (the NSHE attempt to implement a new computer system), and an increase in tuition, the administration was largely able to achieve the goals of cutting the budget while maintaining the university’s ability to sustain its teaching and research goals. Now it appears that Governor Gibbons intends to implement an additional budget cut amounting to an additional 10-14% reduction for UNR.

While the earlier reduction was significant, the impact of this additional reduction is inestimable if it were to go forward as proposed. If this level of reduction is implemented, the core missions of the university are destined to be profoundly affected. Teaching and research will suffer, adversely impacting faculty, students, and the citizens of Nevada.

During earlier budget discussions Steve Rock and I were comfortable with asserting a position we thought would be consistent with faculty values. During those discussions it was possible to foresee a set of principles that could guide us through the budget travails. However, the principles that guided earlier budget planning cannot address the level of budget cuts now being contemplated. Thus, it is important that we engage in a discussion about triaging additional cuts if we actually must endure the reductions currently under discussion.

One of the most promising features of the way budget cuts were handled earlier in the year was that the Board of Regents adopted the plans put forth by individual campuses in the NSHE system. UNR’s proposalntailed strategic cuts that minimized impact on students and faculty. If we are to receive a similar response from the Board of Regents, any proposal put forth by the university must be thoughtful, and an approach that has the support of the faculty would likely be better received than one without our support. Here are the broad principles that should guide our input into the budget discussion that affect our campus.

Budget adjustments should be made with two strategic principles in mind:

* The first principle is to protect the teaching and research missions of the university to the fullest extent possible. This principle implies that elimination of programs that impact students and termination of faculty are measures of last resort. The success of students and the welfare of faculty and staff who are affected by class reductions or the elimination of programs in teaching, research, or service shall be protected to the fullest extent possible.

* Should it be necessary to impact personnel or programs, the second principle is to preserve the overall functioning of those elements of the university that have achieved national prominence and provide the most value to university constituencies.

The first principle continues to emphasize that the primary missions of the university be preserved as fully as possible. It also recognizes that people will be impacted by the governor’s choice of how to deal with the budget shortfall. Jobs and learning opportunities may well be lost and lives disrupted. This reality requires us to be creative in finding methods of helping people permanently or temporarily alter their role at the university. There are many ways to address this possibility should it come to that. Some options may involve proposals for revisions to the NSHE Code. The point is not to list all possibilities here but to state the importance of protecting the well-being of students, staff, and colleagues through whatever creative means are possible. The teaching and research missions of the university cannot be sacrificed. Given the importance of preserving enrollment to the greatest extent possible, the faculty senate will strongly advocate that the Chancellor and the Regents fully consider the elimination or delay
of system level initiatives that have minimal, immediate direct impact on the teaching mission of the system.

The second principle explicitly states that some cuts would not be evenly distributed but strategically implemented. This means that rather than damaging all programs to the point they cannot function effectively, some would be considered for reduction or elimination so that others can maintain high levels of quality or even enhance their functioning. UNR will suffer irreparable harm if, at the end of this process, the only result is that all programs are diminished. This alternative strategy is to maintain or cultivate success in selected programs. Unexamined, across the board cuts are not the means by which our campus should address a financial crisis. The ability to attract and retain excellent faculty and students is crucial. This depends on critical elements of the university maintaining high, positive visibility. This is certainly applicable to activities that enhance our national and international reputation through scholarly publication or other creative activity. The university has only recently achieved Carnegie Research Extensive status and is the only institution in the state with that designation. This status cannot be jeopardized.

It should be stated that before any thoughtful evaluation of programs can occur, reliable, relevant data on costs and value must be available. The costs are relatively easy to identify. The value may not be as clear. Certainly FTEs, extramural funding, publications, creative activities, donations and patronage can be identified. There may be other less tangible values of programs that should be highlighted. Part of any discussion about change requires that those involved agree upon the data to be used in the evaluation process.

We can get much more detailed and specific once we agree on the larger principles and more fully understand the magnitude of actual cuts. The proposed principles allow the broadest dialogue between our faculty leadership, the administration and the Board of Regents.

Note that outlining these principles does not in any way suggest that we believe cuts of this magnitude are ise or defensible. The senate opposes such budget reductions. There is no set of principles that can successfully protect the teaching and research missions of the university if cuts even remotely near those being discussed are imposed. However, if discussions of budget cuts go forward, these principles will help shape our position.

Sense of the Senate, September 24, 2009

September 25, 2009

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.

Statement of the Faculty Senate of the University of Nevada, Reno

June 8, 2009

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.

Sense of the University of Nevada, Reno Faculty Senate Regarding Pay Cuts for Faculty and Staff

May 8, 2009

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.

Faculty Workload Policy

June 12, 2008

NSHE Board of Regents Workload Policy – Title 4, Chapter 3, Section 3:

UNR Faculty Workload Policy