The Nevada System of Higher Education will submit a budget later this month asking for $1.5 billion in state funding for the coming two-year budget.
That’s nearly 23 percent or $284 million more than current state funding of $1.22 billion.
But NSHE Vice Chancellor for Finance Chet Burton says it’s not only reasonable but still less than the state funded budget from the 2008-2009 cycle.
Burton said much of the increase is beyond the system’s control. The biggest parts of the increase come from pay raises ordered by the Legislature and governor and enrollment increases.
State employees all got 3 percent pay raises in each year of the current biennium.
“That’s all got to be absorbed and 75 to 80 percent of our costs are personnel,” he said. “It’s got to be funded going into years to come.”
Enrollment increases, he said, will cost more than $40.6 million over the biennium. The ramp up of the UNLV medical school adds another $14.3 million.
Enrollment is the driver for UNLV, 39.9 percent increase in state cash to $456.7 million. UNR isn’t far behind, asking 22.4 percent more — a total $285.2 million budget.
By percentage, WNC is up there as well, requesting 25.9 percent more at $34.66 million. Great Basin college is 15.5 percent up at $31.9 million.
Then there’s the Capacity Building Initiative approved by the governor and lawmakers in the 2017 Legislature. Burton said that provides money to jump start new or expanded programs that will drive enrollment and graduation rates. The formula funding model doesn’t pre-fund innovative programs. Instead, the formula is based on the past couple of years’ enrollment in any given program.
“We don’t get credit for students in the funding model until two years down the road,” he said.
Capacity is designed to invest in those innovative ideas immediately to get them up and running so the formula can recognize and fund them. Fully funding it would cost $72 million over the biennium. Burton said that has since been reduced to about $40 million.
“All those things were known in 2017,” he said.
But he said there are enhancements that weren’t in the mix in 2017 including funding summer school.
The draft budget approved by the Board of Regents earlier this month includes $21.79 million to fund summer school beginning in fiscal 2021. Nursing programs are already funded for summer school classes but other types of classes aren’t.
So the formula recognizes the fall and spring semesters but not summer classes.
“Not funding summer is a disincentive to offer a full range of classes in the summer,” he said.
He said that will end up a financial wash for the system because all it changes is when students take classes, not the total credit hours they take.
“It won’t cost the state more money because an associate degree is 60 credits, a bachelor’s degree 120 credits,” he said. “It doesn’t matter when you take them so it will just shift costs from spring and fall to summer.”
He said the change also mirrors the needs of the current student population, many of whom would rather take 12 credits in fall and spring, then six in the summer instead of 15 and 15 with the summer off.
The state funded operating budget isn’t the entire budget for the system. When the estimated $750 million in student fees, tuition and other revenues are added in, the total comes to about $2.25 billion for the 2020-21 budget cycle.
Burton said the student share, which increased dramatically during the recession, has leveled off at about one-third of the total budget. The student share was just about $350 million in the 2008-2009 cycle.
This budget includes a 4 percent increase in student fees each year to maintain that ratio.
He said the system has made many changes, including the funding formula, to incentivize students to get their degree. He said the graduation rate has grown much faster than the student population, meaning a higher percentage of students are getting a degree.
“This isn’t just attendance, it’s completion,” he said.
Burton said despite recession cuts to the NSHE budget, the number of degrees and workforce certificates awarded has increase by 32 percent since 2008-2009.
Under this spending plan, he said NSHE’s state funding will finally be back where it was in that biennium.
“This is a reasonable request,” said Burton.
The proposed budget must be submitted to the governor’s office by the end of August.