First posted on the Ramirez Group blog.
In prior posts I have been critical of Chancellor (Boss) Dan Klaich’s leadership of the Nevada System of Higher Education (NSHE). Needless to say, powerbrokers in Carson City and Reno were not happy. As a consequence, I was the recipient of requests by guardians of the status quo to either stop or “tone down” my posts. Boss Klaich even took time out of his busy schedule to meet and discuss my concerns. However, I feel so strongly about higher education and see so many problems with how higher education in Nevada is administered, I will continue with my inquiries in hopes of motivating meaningful reform.
In a nutshell, the primary problem with higher education in Nevada is that decision making is driven by insider politics instead of a policy vision of what higher education should accomplish, and a plan of how the higher education system should be organized to meet these goals. No episode better captures these issues than the on-going debate about how to fund Nevada’s seven higher education teaching institutions.
During the 2011 legislative session, the Nevada Legislature created an interim committee to make recommendations to revise how the state funds its higher education institutions. The old formula was engineered by the great northern Nevada legislator Bill Raggio. Like every other budgetary structure that Raggio created, the formula’s underlying principle was the redistribution of resources from southern Nevada to subsidize, at a much grander level, the institutions in northern and rural Nevada. The old formula was such a scam that northern community colleges received more than twice as much in per pupil funding than southern Nevada’s research university. The committee was composed of 12 voting members, six from northern Nevada and six from southern Nevada including NSHE apologist Regent Michael Wixom even though three quarters of the population live in southern Nevada. Fortunately, the committee was chaired by then Senate Majority Leader Steven Horsford who, despite leaving the Legislature to run for Congress, saved the process from being completely hijacked by Boss Klaich.
To that end, before the committee issued its request to solicit bids for a consultant to assist with its’ work, Boss Klaich was circulating what would eventually be more than two dozen versions of his funding formula. Not surprisingly, two of the five bids had direct ties to Boss Klaich. The WICHE proposal planned to use Dennis Jones’ organization, NCHEMS, as a subcontractor. Jones has a long relationship with NSHE and even though the bid was rejected, NCHEMS would work on the project as Boss Klaich’s in-house consultant. MGT, a firm that Boss Klaich had contracted with in 2010 to the tune of $99,670 plus expenses to produce yet another evaluation of NSHE’s funding formula, also submitted a bid. Because MGT was tainted by its prior dealings with Boss Klaich, its bid was rejected as well.
In the end, a split committee, with Regent Wixom voting with the north, awarded a $150,000 contract to SRI International to assist with its work; the same firm that conducted Governor Brian Sandoval’s economic development analysis. Because the firm had just spent the prior year evaluating every nook and cranny of the state’s economy, SRI was an ideal partner to recommend how to align higher education funding with the Governor’s plan to develop and diversify Nevada’s economy. Instead of embracing the opportunity to work with SRI, Boss Klaich plowed ahead, telling a reporter after SRI won the bid that “Until I see something better, I’m going forward with [my plan], which I think is fair.”
For Boss Klaich, “going forward” meant a delicate process of appeasement seeking to mollify dissension among the campuses. For the rural community colleges there was a “small institution factor” that somehow did not apply to similarly sized institutions in southern Nevada. For southern Nevada there was the promise that the new formula will deliver millions of dollars to the south’s three institutions. Not surprisingly, UNR, Boss Klaich’s alma mater, was held harmless as all of the proposed shifts come at the expense of the rural community colleges (if his plan were to be actually implemented). And here is perhaps Boss Klaich’s most clever bait and switch – his proposed budget overrides his own funding formula by redirecting money that would otherwise be appropriated to the three southern Nevada institutions to mitigate cuts to the northern institutions. The end result is that NSHE’s budget continues to protect the historically privileged northern schools at the expense of expediting relief for the disadvantaged southern Nevada’s institutions.
To make matters worse, there are at least three instances when the recommendations of the interim committee were ignored. During the August meeting, Senator Horsford refused to support the inclusion of operations and maintenance funds for the state’s two research universities into the funding formula (under Raggio’s old formula this had been the case; an obvious give away to UNR, which because it has been built well beyond its need has twice the square footage as UNLV while generating three quarters of UNLV’s FTE). Senator Horsford also refused to include mitigation for the rural community colleges in the funding formula. Yet, after the interim committee made its recommendations both of these items were in Boss Klaich’s funding formula.
Similarly, the interim committee voted not to apply formula principles to the dental, law, and medical schools because those institutions are funded with line items. Yet, between the submission of NSHE’s budget request in early fall and the release of the Governor’s budget in January, one of the features of the funding formula (the ability of institutions to keep their tuition and fees instead of having those dollars count against their general fund allocations) was applied to the three professional schools – a shift that sends millions more to the UNR campus at the expense of UNLV’s dental and law schools.
Because of all of Boss Klaich’s maneuverings and the myriad back-fills, carve-outs, mitigations, and redirections which I will address in a future post (bottom line, money always moves in one direction – from the south to the north), his formula, if implemented, would shift less than 3% of the total NSHE budget to the southern institutions. And even this may not materialize given that enrollments at both CSN and UNLV are down. No wonder Boss Klaich implemented a gag order that made public discussion of the formula by campus administrators a fireable offense.
The manner in which Boss Klaich has conducted himself throughout this process is telling. However, I would be remiss to simply log the various ways in which Boss Klaich has undermined the credibility of his own funding formula and not offer suggestions about how Nevada should think about reforming higher education. Fortunately, the work completed by SRI as part of the interim committee’s final report includes a number of important recommendations that are worthy of consideration. I focus on three here.
I. Study the Cost of Education in Nevada
First, despite all of the work that has been done on the funding formula, both during the interim and previously by MGT, no study has actually analyzed what it costs to provide higher education in Nevada. Hugh Anderson, who chairs the Las Vegas Metro Chamber of Commerce Government Affairs Committee and was a Governor appointee to the interim study committee, recently published an editorial in the Las Vegas Review Journal noting this point and suggesting that “Nevada conduct its own study of the cost of delivery for each discipline at each level so future funding would be based on Nevada-specific data rather than extrapolations from other states.”
Under Boss Klaich’s proposal, the state “pays” a base rate of roughly $130 for each student credit hour at all of the campuses. This value is then weighted by enrollment and multiplied through a matrix that includes discipline specific values that vary depending upon if the course is offered at the lower, upper, or graduate levels. The matrix was concocted by Dennis Jones using values cobbled together from a handful of other states that have little in common with Nevada.
As a consequence, no one actually knows what the cost is for the provision of higher education in Nevada. Or put differently, instead of developing a funding formula that measures the true costs of funding the state’s higher education institutions and then leaving it to the elected officials to fund the formula or not, Boss Klaich chose to reverse engineer the process using information taken from state’s with little in common with Nevada to arrive at a budget number that he thought the Governor and the Legislature would support.
II. Devolve Community Colleges from State to Local Control
Second, the SRI report recommends that Nevada devolve its community colleges from state to local control. Presently, Nevada is one of three states where community colleges are governed exclusively at the state level and Nevada may be the only state that uses the same exact funding mechanism for both colleges and universities and community college. Most states long ago realized that local control and funding of community colleges provides a superior model to a centralized, remotely administered governance structure. Local funding and local governance gives local communities clear stakes in these institutions and thus, creates a strong incentive for local constituencies to maximize and adapt these institutions to meet local work force development and demographic needs. This is particularly significant in light of the Obama administration’s TAACCCT initiative that is making $2 billion dollars available to support partnerships between local industries and community colleges. Because Nevada’s first round application was rejected and the state failed to apply for the second round, thus far Nevada has received the minimum award.
Senator Barbara Cegavske has introduced legislation, SB 391, that audits the community colleges and transfers their control from NSHE to the Department of Education while local governance and funding arrangements can be developed and implemented. Not surprisingly, Boss Klaich testified intensely in opposition to any encroachment on his empire. He even brought along two of the community colleges presidents whom he can unilaterally fire. Maria Sheehan, the President of Truckee Meadows Community College, was notably vehement in her testimony. I wonder if her opposition had anything to do with her being denied other jobs because of revelations of falsified enrollment data at a California institution she once ran (a charge that Boss Klaich independently absolved). In the end, Boss Klaich had the good sense to see the writing on the wall and pledged his support for an interim committee to study how Nevada should devolve its community colleges. Hopefully, Boss Klaich will play a constructive role in this discussion instead of again impeding the work of the Nevada Legislature.
III. Align Higher Education Institutions to Capture Federal Dollars
Lastly, we need to align our higher education institutions to capture federal dollars. Nevada is at the bottom in securing federal grants despite being a swing state that is represented by the U.S. Senate Majority Leader. Higher education is a particularly poor performer. Certainly, failing to seriously pursue TAACCCT grants is one highly visible example, but so too is the failure for any of the NSHE institutions to achieve either Minority Serving or Hispanic Serving Institution status despite Nevada’s demographic diversity. Unfortunately, the only manner in which Boss Klaich’s funding formula accounts for Nevada’s increasing diversity is in the performance pool (a 5% “carve-out” of each school’s funding that can be earned back by meeting institution specific benchmarks). Schools are rewarded financially when students from diverse backgrounds graduate. There are, of course, no resources anywhere else in the formula – or in the higher education budget more generally – designated for these institutions to assist with the recruitment and success of students whose very presence on a Nevada college campus has a multiplier effect that allows state money to be leveraged to obtain federal dollars.
So here is a simple suggestion. Why not make student diversity a driver of the formula? Doing so would position the state to capture low-hanging federal money and provide certainty to the campuses that if students from under-privileged backgrounds enroll at their institutions that the resources will exist to ensure that these students progress and graduate in a timely manner. My guess is that because of the geographic distribution of the state’s minority populations there was little appetite for such a commonsensical reform in a northern dominated institution like NSHE.