Governor says university budget deal not final

Gov. Jim Gibbons rejected the university system's first offer Friday to reduce its budgets, but said the two sides are "close."

Budget changes announced earlier this week significantly reduced the amount state agencies must cut to balance their budgets - from $136 million to about $60 million.

Following that, Gibbons advised the university system they only needed to reduce by $11 million instead of nearly $32 million. That is less than 1 percent of the system's $1.7 billion total budget.

The system responded with a proposal listing the programs they would cut back to meet that goal. But when the dust cleared, the cuts were primarily in the enhancements Gibbons himself had supported - including Workforce Development, the Chronic Fatigue research program, Woman's Research Institute, Nevada Scholars and the P-21 Council. Those program cuts alone account for $5 million of the total.

"The proposals we felt were important were the ones they cut," he said. "So we're going to make some adjustments on it and send back our proposal."

But Gibbons said he is hopeful because the gap is much smaller.

"I think there are some things we can compromise on," he said.

Executive Vice Chancellor Dan Klaich said the two sides are "extremely close."

The system's top priorities are formula funding, which generates most of the state budget based on a per-student costs and support, and "hold-harmless," which maintains formula funding when a campus has flat or falling enrollments.

"Particularly considering the two biggest items on the enhancements list are the formulas and hold-harmless and at $11 million, you're not digging into those things," Klaich said.

Gibbons said current formula funding is 84.5 percent of the total formula calculations. He said his proposed budget raises that a percent to 85.5 and that enhancement will be kept in the budget.

Klaich said there isn't enough money available to completely fund hold-harmless needs because several campuses are growing slower than originally projected, which would cost them formula funding unless they are "held harmless." He said the answer is to fund a percentage of hold-harmless needs as they do with the formulas.

He said that way the money would be allocated to the different campuses, "on a proportionate basis" so that no one campus suffered more than the others.

Director of Administration Andrew Clinger said his office agrees with that methodology.

"Now we just need to agree on the percentage," he said.

At the same time, Gibbons made it clear Friday he isn't ready to automatically accept the decision by lawmakers to put fee increases back into two human resources budgets. Lawmakers, led by Senate Majority Leader Bill Raggio, R-Reno, made that decision Thursday, saying they hope Gibbons will rethink his adamant opposition to raising fees.

"I haven't had a chance to review them," said Gibbons. But he said he was "firmly committed" to oppose fee increases if there is any other way to fund needs.

Asked about Raggio's comment that he hopes Gibbons will go along with lawmakers, he said, "I guess hope springs eternal."

He said he committed to voters to oppose fee and tax increases and intends to keep that commitment.

He made it clear he could veto the budget over the fees issue. But, he said, he is willing to talk with lawmakers and try to reach a compromise.

"We're going to work with them," he said. "I'm not going to reject them out of hand."

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.