MINUTES OF THE MEETING OF
THE COMMITTEE TO STUDY THE FUNDING
OF HIGHER EDUCATION
A meeting of the Committee to Study the Funding of Higher Education (created as a result of Senate Bill 443 - 1999) was held at 9:50 a.m. on January 27, 2000, at the Grant Sawyer State Office Building, 555 East Washington Avenue, Room 4401, Las Vegas. The meeting was video-broadcast to the Legislative Building, 401 South Carson Street, Room 3138, Carson City, Nevada, and to Great Basin College, 1500 College Parkway, Lundberg Hall, Room 4, Elko, Nevada.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Randolph Townsend
Senator Dina Titus
Assemblyman Joseph E. Dini - in Carson City
Regent Jill Derby
Assemblyman Richard Perkins
Regent Steve Sisolak
Dr. James Richardson
John P. Comeaux - in Carson City
Dr. Carol Harter
Dr. Richard Moore
Dr. Joseph Crowley
Assemblyman Bob Beers - Excused
Regent Doug Seastrand - Excused
Brian Burke, Senior Program Analyst
Mark Stevens, Assembly Fiscal Analyst
Dan Miles, Senate Fiscal Analyst
Kim Morgan, Chief Deputy Legislative Counsel - in Carson City
William B. R. Daines, Deputy Legislative Counsel - in Carson City
Joi Davis, Committee Secretary
GUESTS IN ATTENDANCE:
In Las Vegas:
Tom Anderes, University and Community College System of Nevada (UCCSN)
Allen Ruter, Community College of Southern Nevada (CCSN)
Mark Alden, Board of Regents
David Keebler, Truckee Meadows Community College (TMCC)
Bob Dickens, University of Nevada, Reno
Michael Sauer, University of Nevada, Las Vegas
Marilou Jarvis, Desert Research Institute (DRI)
John Case, Desert Research Institute
Ashok Dhingra, University of Nevada, Reno
George Scaduto, University of Nevada, Las Vegas
Linda Piersin, University and Community College System of Nevada
Dane Apalatequi, Western Nevada Community College
Bob Silverman, Community College of Southern Nevada
Gina Polovina, Boyd Gaming
Stephen Wells, Desert Research Institute
Fred Albrecht, University of Nevada, Las Vegas
Dan Musgrove, City of Las Vegas
Patty Clariton, Community College of Southern Nevada
In Carson City:
Pat Miltenberger, University of Nevada, Reno
Andrew Clinger, State Budget Office
Lane Simonian, Truckee Meadows Community College
Fred Davis, Desert Research Institute
Marty Bibb, RPEN
Carl Diekhans, Great Basin College
Exhibit A Meeting Notice and Agenda
Exhibit B Attendance Roster
Exhibit C Meeting Packet
Exhibit D-1 Proposed Peers, provided by Dr. Larry Leslie
Exhibit D-2 Status Report, provided by Dr. William Pickens
Exhibit D-3 Facsimile of Charts, provided by Dr. William Pickens
Exhibit E-1 Peer Analysis of UNR, provided by Dr. Larry Leslie
Exhibit E-2 Peer Analysis of UNLV, provided by Dr. Larry Leslie
Exhibit E-3 “Report” provided by Dr. Larry Leslie
Exhibit E-4 Peer Analysis of TMCC, provided by Dr. Larry Leslie
Exhibit E-5 Peer Analysis of WNCC, provided by Dr. Larry Leslie
Exhibit E-6 Peer Analysis of CCSN, provided by Dr. Larry Leslie
Exhibit E-7 Peer Analysis of GBC, provided by Dr. Larry Leslie
NOTE: All Exhibits are on file at the Research Library and Fiscal Analysis Division of the Legislative Counsel Bureau.
Chairman Raggio commenced the meeting at approximately 9:50 a.m., with a quorum present. He acknowledged those persons accessing the meeting at the outside locations of the legislative building in Carson City and Great Basin College in Elko.
Chairman Raggio asked whether the Committee had an opportunity to review the minutes of the November 30, 1999, meeting (Exhibit C, Tab B).
Mr. Snyder pointed out that the first sentence of the third paragraph on page 5 appeared incomplete. After some discussion, it was concluded that the sentence should read: “Dr. Anderes pointed out that currently UCCSN has a 21:1 ratio for the majority of programs at UNLV, UNR, GBC and WNCC.”
SENATOR TOWNSED MOVED TO APPROVE THE MINUTES FROM
THE NOVEMBER 30, 1999, MEETING TO INCLUDE THE WORD “OF”
ON THE FIRST LINE OF THE THIRD PARAGRAPH ON PAGE FIVE,
AFTER THE WORD, “MAJORITY.”
ASSEMBLYMAN PERKINS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.
Chairman Raggio noted that copies of the consultant contracts were provided in the meeting packet (Exhibit C, Tab C). Chairman Raggio thanked Brian Burke, Legislative Counsel Bureau, for his extensive work in finalizing the consultant contracts and asked him to provide an overview of those items.
Mr. Burke stated that modifications to the contracts, as directed by the Committee during the November 30, 1999, committee meeting, were incorporated into the contracts. The draft contracts were then sent to each of the three potential consultants selected by the Committee. Mr. Burke pointed out that a summary of the consultant bid information was in the meeting packet (Exhibit C, page 19).
Mr. Burke said that Dr. Paul Brinkman elected not to bid because he did not have sufficient time to meet the Committee’s deadlines. The two remaining bidders, Dr. William Pickens and Dr. Larry Leslie, were awarded contracts to accomplish portions of the Committee’s requirements.
As indicated on the summary (Exhibit C, page 19), Dr. Leslie was awarded the peer comparison portion of the contract, with a not-to-exceed contract award of $78,322 which includes analysis and travel costs. A copy of Dr. Leslie’s contract begins at page 20 under Tab C of the meeting packet.
Continuing, Mr. Burke related that Dr. Pickens was awarded the formula data gathering portion of the contract with a not-to-exceed award of $57,210, including analysis reporting and travel costs. A copy of Dr. Pickens’ contract begins at page 25 under Tab C of the meeting packet.
After accounting for the estimated committee costs, Mr. Burke advised that $136,000 was available for the consultant contracts. He pointed out that the available funding allowed the Committee to obtain the four highest priority deliverables at a cost of $135,532. Mr. Burke said that within the available funding, the Committee was unable to contract for the comparative library data, which would provide the dollars per volume ratios and collection sizes for each of the UCCSN institutions and peer groups. He informed the Committee that the Working Group of the Committee has offered to perform that task if directed to do so.
Mr. Burke stated that the available funding also did not allow the Committee to fund a report on higher education savings incentive plans used by other states. However, at the November 30, 1999, committee meeting, the Working Group was directed to begin working on that task. Mr. Burke advised that a status report on that matter would be provided under another agenda item.
Mr. Burke pointed out that the consultants Dr. Larry Leslie and Dr. William Pickens, were both available to provide status reports to the Committee. In addition, Dr. Pickens provided the formula state listing and the General Fund appropriation report by his December 31, 1999, deadline. Mr. Burke announced that in order to meet the contractual reject/accept deadlines, the Working Group recommended approval of the 30 formula states suggested by Dr. Pickens, which was subsequently approved by Chairman Raggio. He pointed out that the formula state listing begins on page 36 of the meeting packet (Exhibit C).
Continuing, Mr. Burke stated that Dr. Pickens made modifications to his General Fund Appropriation Report and approval of that report by the Committee would be sought. That modified report begins at page 38 of the meeting packet (Exhibit C). Additionally, supplemental information from Dr. Pickens was faxed to the Committee and the Working Group on Monday, January 24, 2000 (Exhibits D-2 and D-3).
Mr. Burke related that Dr. Leslie submitted his listing of potential peers on January 24, 2000 (Exhibit D-1) and he would be presenting additional information in support of the peer recommendations during his presentation to the Committee today. Mr. Burke indicated that on-site visits of the peers recommended by Dr. Leslie could not commence without Committee approval.
Chairman Raggio acknowledged that the Working Group to the Committee was accomplishing tasks successfully and asked whether the Committee objected to having the Working Group research the issue of comparative library data.
DR. RICHARDSON MOVED THAT THE WORKING GROUP OF
THE COMMITTEE REPORT TO THE COMMITTEE TO ON ITS
FINDINGS REGARDING COMPARATIVE LIBRARY DATA.
MR. SNYDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.
Chairman Raggio asked the Working Group members to stand and be recognized. Mr. Burke introduced the members of the Working Group: Larry Eardley, UCCSN; Ashok Dhingra, UNR; Dane Apalatequi, WNCC; David Keebler, TMCC; Marylou Jarvis and
John Case, DRI; Al Ruter, CCSN; Mike Sauer, UNLV; Carl Diekhans, GBC; Andrew Clinger and Don Hataway, State Budget Office; George Scaduto, UNLV; Bruce Shively, UNR; and Mark Stevens, LCB. On behalf of the Committee, Chairman Raggio thanked the members of the Working Group for their efforts.
D. Consultant Status Report
Chairman Raggio asked that the Committee reserve questions for the consultants until after they have made their presentations. He stated that both consultants, Dr. Pickens and Dr. Leslie, have expressed their willingness to help the Committee, the Legislature, and the Governor in issues relative to higher education in Nevada. Chairman Raggio asked Dr. William Pickens to address the Committee.
Dr. Pickens thanked the Committee for the opportunity to serve as the Committee’s consultant. In providing background information, Dr. Pickens informed the Committee that he has devoted his entire career to leadership and fiscal policy analysis of higher education. For 13 years he served as either the Deputy Director or Executive Director of the California Post-Secondary Education Commission, which is the state’s advisory board to the State Legislature and Governor. Dr. Pickens indicated that he has spent much time in and about the California Legislature in the area of public policy in that forum. He has been a consultant for the past seven years, following his position as the Chief Fiscal Officer at Sacramento State University during the worst fiscal crisis of the state university’s history in the early 90’s.
As a consultant, Dr. Pickens related that he has worked with state legislatures, universities and community colleges in approximately ten states. In fact, he is currently working on a study of the ten states facing the most enrollment growth; Nevada is among one of those states. For the past three years he has been the Executive Director of a privately funded group called the California Citizens Commission on Higher Education. Dr. Pickens said there were a number of similar groups located throughout the country, consisting of private citizens not in higher education fields, but who are concerned with the future of access, quality and diversity of higher education. He said he would be happy to provide the Committee with copies of the report issued from the California Citizens Commission on Higher Education, as there may be some relevant issues of interest to the Committee.
Dr. Pickens stated he would be discussing the 30 states that currently have formula funding, and any issues the Committee wished to bring forth regarding the General Fund Report, or additional data that has been supplied. He opined that the issue of comparative financial statistics was an endless topic and he would urge the Committee to be specific when identifying the state’s needs.
Dr. Pickens stated he would highlight those areas he found of particular interest; however, the dialogue he received from the Committee would be most important to his work in order to best benefit the Committee. Dr. Pickens directed the Committee to page 36 of the meeting packet (Exhibit C, page 36). He stated one of his first tasks was to define a “formula.” A generally accepted definition of a formula is “a mathematical means of relating the workload of a public institution to a state appropriation.” In identifying formula-driven states, he used the criteria that 80 percent of the state’s appropriations were generated by the formula. He pointed out that a number of states (including Illinois), on his list (Exhibit C, pages 36-37), have since indicated that they were no longer using a formula-based approach; however, according to his definition, Dr. Pickens insisted those states were still using a formula approach and should therefore remain on the list.
Dr. Pickens urged the Committee to take a skeptical view of what could be learned directly from formulas. He stated that he would be presenting the Committee with many facts, ratios, relationships and approaches as represented in official documents generating state appropriations. The issue was not in determining the array of formulas being used, but in defining the information that would be most helpful to the Committee and the state. Dr. Pickens opined that formulas were not necessarily scientific methods tested by experts but were often cost studies that represented a “snap-shot” of the particular expenditures at a given point of time, and were subject to change. For instance, technology changed the way instruction was delivered, salaries changed, new programs were added, and old programs expired. Also, new issues and priorities become known and the institutions and the Legislature need to be address those new matters. Frequently, those changes are left out of the formulas. Dr. Pickens said technology was a perfect example because 20 years ago technology was a small portion of any budget, but now technology had an enormous focus on budget. Unfortunately, formulas do not consider the full array of costs that need to be devoted to technology.
Further, Dr. Pickens opined that formulas are often normative; the formula represents the amount of funding the experts believe would be necessary to provide a quality program. Very few state legislatures rely on a normative style of evaluation. For example, the state of Texas has an official public policy to remain at least in the average of the ten most populous states. In California, policy-makers compare faculty salaries in their four-year universities to comparison institutions.
Dr. Pickens stated that often formulas become accepted as long-standing practices resulting in arguments between institutions. Many state formulas are accepted practices and should not be changed casually or just because another state has developed a different practice.
Dr. Pickens said in addition to developing the factual data he provided, he wanted to provide a clear explanation of the basis, the rationale, and the evolution of formula approaches in other states. Secondly, he would be discussing particular elements in formulas from other states. For example, most every state has defined electronic technology as a high priority, as well as educational diversity and economic development. The State of Texas has just addressed these areas within their formulas. He stated that approximately 30 states have a major portion of the state’s budget generated by outcome measures. Dr. Pickens indicated that the state of South Carolina recently based all its’ appropriations on outcome measures.
Dr. Pickens indicated he would discuss the states that specifically have formulas designed to seek productivity increases.
Dr. Pickens again urged the Committee to use the information on what other states are doing with formulas carefully, and to fashion public policy based on strategic directions for the State of Nevada. Dr. Pickens identified three states that, in his opinion, deserve particular study because they have already dealt with the same issues, or were currently reviewing the same issues as the State of Nevada:
· South Carolina – Dr. Pickens said it was uncertain whether the approach taken by South Carolina would be successful. The formula approach in previous years was based on workload. However, over the past two years, the State of South Carolina has converted to a 37-measure approach that provides all the state-controlled dollars on performance and outcomes measures. Student placement, progress to degree, graduation rates, extent of remediation and its reduction, and employer satisfaction are just some examples of performance measures. There was an extensive article about this approach approximately six months ago, and it has yet to be determined if this approach will continue. Dr. Pickens related that the State of Tennessee began performance funding approximately 20 years ago. He prepared an article at that time which indicated that performance funding did assist the State of Tennessee in focusing institutional introspection in a way that other FTE measures did not.
· Texas – Dr. Pickens said Texas was the first state to adopt formulas. In 1960 the State of Texas had five formulas. In 1968 there were seven formulas. In 1979 there were 11 formulas in the State of Texas, and in 1982 there were 13 formulas. The most recent budget document from the State of Texas indicated: “In 1997 the Legislature replaced the 14 formulas that had evolved over the years and adopted a simplified university formula system containing only two formulas and three supplements.” The coordinating board stated, “More significant than the change in structure of the formulas is the change in philosophy. While the predecessor formulas were intended to be incentive neutral and reflect costs, the new formulas are intended to promote specific behaviors. The formulas provide infrastructure funding based on the amount of space that an institution should have rather than the space that it actually has, thereby promoting better utilization of space. The supplement is provided for teaching with tenure and tenure-track faculty, thereby promoting quality undergraduate teaching.” Dr. Pickens said the State of Texas gives each credit in instruction a 15 percent increase if a lower division class is taught by tenure or tenure-track faculty. In addition, they have established higher rates for upper division and undergraduate instruction relative to lower division, thereby providing an incentive for institutions to accept community college transfers and retain lower division students. The formulas for fiscal years 2000-01 presented in this publication continued the changes the Legislature implemented in 1997 and add an important formula supplement for economically disadvantaged students as directed by a rider in the general appropriations. Dr. Pickens stated that due to the Hopwood decision (5th Cir. Court of Appeals, Texas) was concerned with the diversity of its student body.
Dr. Pickens indicated that he highlighted the above three states in order to provide the Committee with the type of policy judgments being placed in formulas. Acting Chairman, Assemblyman Perkins, thanked Dr. Pickens for his report.
Regent Jill Derby asked Dr. Pickens whether the comparative data would be provided to the Committee in a summary format. Dr. Pickens said a one-page template of the comparative data was supplied to the 30 states included in the study (Exhibit D-2, Executive Summary for Each State), which will serve to compare Nevada with those states. Additional information will thereafter be supplied containing relevant data regarding student/faculty ratio, etc. Dr. Pickens indicated that the format was completed in accordance with the Contract, but he would be happy to provide the information in a different format if that was the pleasure of the Committee.
Mr. Snyder acknowledged the 30 states that are using a formula approach for funding higher education, and asked whether the Committee should be apprised of the methods used by the states not using formulas. Dr. Pickens replied that certainly that information would be useful to the Committee; however, time to accomplish research of the 30 formula-driven states was already limited so he did not believe there would be enough time to perform an analysis of the remaining states. He indicated he could provide to the Committee, based on his own knowledge, summaries of some of the interesting methods being used in the non-formula states, but that would not be included in his official report to the Committee.
Dr. Pickens asserted that the Committee has expressed interest in the issue of capital outlay; however, analysis in that area was not covered under the contract. He commented that the states experiencing enormous growth, California, Washington, Texas, Florida, Colorado, Maryland, New York, North Carolina, Arizona, and Nevada, are looking at ways to provide capital outlay and to find a way to mix bricks and mortar with electronic technology.
Mr. Snyder acknowledged the study that Dr. Pickens was performing on the ten states experiencing rapid growth, and asked if that information would be included in his analysis of the 30 formula states. Dr. Pickens replied that the 10-state study he was conducting was sponsored by the National Center for Public Policy in Higher Education and they believe that growth is one of the most profoundly transforming factors on higher education. Currently, every state is attempting to transform systems of higher education to encourage economic growth, to ensure that disadvantaged students’ needs are met, to ensure better links to K-12, etc. He pointed out that the criteria for the study was any state projecting more than a 10 percent enrollment increase and had long-term structural deficits projected.
Dr. Pickens speculated that the growth factor in Nevada would result in a very different set of institutions in the state in the next ten years, in terms of faculty and services to the community. The relationships between the system office, the state, the Legislature and the institutions would undergo a profound change. Enrollment growth causes change, so hopefully the 10-state study would benefit the Committee. Dr. Pickens informed the Committee that the study should be released in approximately two months.
Chairman Raggio asked if the 10-state study would be made available to the Committee, along with Dr. Pickens’ report. Dr. Pickens reiterated that Nevada was one of the ten states he would be studying so he would make that study available to the Committee along with his final report.
Mr. Perkins acknowledged the impact of growth on funding formulas and the changes that occur to institutions due to growth, such as the mission and faculty. He asked how the Committee would best project and anticipate growth issues when creating and revising present formulas.
Dr. Pickens replied that he did not have an adequate answer, but he would share three ideas:
1) Establish base funding formulas that fund institutions adequately.
2) Establish funding formulas that are equitable or within tolerable ranges.
3) Establish funding formulas that include incentives.
Dr. Pickens related that if the above three items were considered the formulas would have a good base approach to assist in future growth needs. In addition, there should be an ongoing process, similar to the process established by the State of Illinois, to ensure that changes that occur were not artificially constrained by the formulas and included allowances for adjustment either annually or bi-annually.
Dr. Pickens stated that in the 1980’s the State of California developed formulas that worked well. However, when that state went into the worst recession since the depression, there was a total collapse of the financial formula. Dr. Pickens said that ultimately resulted in a suspension of the formulas for approximately four years because the formulas were no longer appropriate. He suggested that when contemplating new formulas, several different scenarios should be designed that could be activated due to growth issues. Secondly, the budget process should review the base and make adjustments based on increased enrollment. Third, Dr. Pickens related that the formulas should include a long-term approach that considers alternatives to the formulas.
Mr. Perkins asked Dr. Pickens how, using his study methodology, he would determine the best models for Nevada. Dr. Pickens responded that he was not in the business of making the determination of which states would represent the best models for Nevada. Rather, he would be seeking the direction of the Committee on that matter. He did not want to spend much time on states that would not be utilized by the Committee or that the Committee did not believe were similar. He reiterated that he would not be selecting the states used, but he would be providing all the data promised.
Regent Sisolak stated that if growth was a profound factor in determining funding, why was it not ranked as the number one criteria for determining peer groups? In other words, it would make sense that one high growth institution should be compared with another high growth institution. Dr. Pickens agreed. He pointed out that his methodology (criteria) for the study was contained on page 37 of the meeting packet (Exhibit C):
1. We shall strive to determine the basis, rationale or purpose of those formulas that generate the largest share of state appropriations.
2. We shall devote considerable time to those states that appear to provide the best models for Nevada.
3. We shall pay special attention to those elements in the formulas that are at the cutting edge of higher education finance:
· Those which deal with electronic technology;
· Those which are related to outcomes measures or quality improvements;
· Those which specifically seek to enhance productivity;
· Those where the Legislature has stated a clear purpose.
Dr. Pickens indicated that Regent Sisolak’s question regarding growth would be included in methodology number one since a good deal of attention would be placed on the basis, rationale and purpose and effect of states that have a significant portion of the budget generated by growth. He informed the Committee that the State of Texas recently adopted a growth supplement for their formulas.
Dr. Anderes commented that from a system standpoint, the UCCSN was not interested in identifying a single state or two states as models. In fact, what he believes Dr. Pickens was suggesting is that several states have been selected and based on policy-based criteria, the Committee may wish to consider the activities of those states. However, as the Committee and the Working Group begin to delve into the existing formulas, they could envision how the existing formulas could be revised or altered and determine whether the formulas were adaptable and equitable. In addition, the review should include whether new methods were needed, such as technology pieces or research formulas. Since there was not just one state that has fashioned their formulas on what Nevada was seeking to do, they would need to pull ideas and methodologies from a variety of states on what was most reflective of the state’s needs.
Dr. Pickens concurred with Dr. Anderes. In addition, he clarified that he was not suggesting that the Committee identify only three states to follow, but rather pull information from the vast diversity of all states.
Dr. Moore stated that the Board of Regents recently approved the concept of establishing a new four-year state college in Henderson. He asked whether it would be acceptable to the Committee if Dr. Pickens, as an expert in the area of state colleges in California, presented information on how state colleges were funded.
Chairman Raggio asked whether Dr. Pickens was aware that the state was contemplating the feasibility of a state college. Dr. Pickens replied that he was aware that Nevada was considering building a 4-year state college. In addition, he would be happy to highlight some of the states that funded state colleges. Chairman Raggio interjected that in order for Dr. Pickens to prepare any research on the issue of state colleges, he would need to receive from staff and Dr. Moore the mission statement of the new state college.
Chairman Raggio reminded the Committee that the analysis required under the consultant contracts did not indicate any order of priority. Initially, the Committee was concerned that the contract proposal contains certain items and that some items be designated as a low priority.
Chairman Raggio said that the issue of growth is prevalent in most states, so it would seem that most states have made provisions within their funding formulas for growth. He asked Dr. Pickens to include in his findings how other high growth states handled enrollment and growth issues.
Dr. Pickens commented that every formula had some aspect of growth included but institutions handle growth issues differently. For example, some institutions fund enrollment growth from the prior fiscal year, while some institutions fund on the basis of projected enrollment growth. There are some institutions that receive additional funding after passing a specified threshold (2%)(-2%), while some institutions received enrollment funding directed at certain programs. Chairman Raggio said the Committee would be interested in receiving a summary of the formula states and how they include growth in funding formulas.
Next, Dr. Pickens directed the Committee to his Report of State General Fund Support for Public Education (Exhibit C, pages 38-39). He stated that the table in the report contained six columns:
I. Total State General Fund Expenditures (Reported by NASBO/NGA 97-98)
II. State General Fund appropriations to Public Higher Education (Reported by NASBO/NGA 97-98)
III. Percent of State General Fund Appropriations to Public Higher Education (Reported by NASBO/NBA 97-98)
IV. Appropriations of State Tax Funds for Operating Expenses of Higher Education (Reported by ISU “Grapevine” 97-98)
V. Percent of Total State & Local Tax Revenues to Higher Education (Reported in State Profiles 97-98)
VI. Local Government Support for Higher Education (Reported by NCES 1995-96)
Dr. Pickens pointed out that after the tables for the General Fund Appropriations Report, was a section on the data in each column (Exhibit C, page 39). He indicated that the sources of data he used for the tables varied on the information that was sought. For example, if someone was looking to measure the adequacy of institutional resources, then one set of data should be used. Whereas, if someone was interested in knowing how much a state contributed to higher education, a different set of data would be utilized.
Dr. Pickens asserted that the table provided in the meeting packet (Exhibit C, page 38) performed two functions: 1) The table showed, for all states, the general fund support, aggregated, that each state contributed to higher education on the basis of state total appropriation. Dr. Pickens said that statistic was not very relevant by itself, but needed other statistics to be useful. For example, the table shows that the State of Texas provided 18.3 percent of its general fund to higher education, 7.5 percent of state and local amounts, compared to Oklahoma which provided 19.2 percent of its general fund and 8.7 percent of the local support for higher education institutions. However, no conclusions could be drawn from those figures standing alone. Likewise, Massachusetts expends 6.3 percent from general fund support, and New York expends 7.9 percent, along with small portions from total state and local revenues, 3 percent for New York and 4 percent for Massachusetts. Yet, both of these states relied heavily on student tuition, and both states have excellent systems of public and private higher education.
Therefore, the table shows what Nevada is contributing to higher education compared to other states in terms of the state general fund appropriation; that Nevada did not contribute much in terms of the local contributions; and that Nevada has a low tuition rate compared to other states.
Chairman Raggio said it was brought to his attention that information contained under column XI, Local Government Support for Higher Education, shows that Nevada received almost $7 million in local government support. Chairman Raggio said it was well known that Nevada received no local government support at all. He asked Dr. Pickens what comprised that figure for the report. Chairman Raggio added that staff had pointed this out to him, and based on that inquiry, Dr. Pickens provided supplemental information (Table 8, Exhibit D-3) in support of that inquiry from the Illinois State University Report, which correctly reported “zero” for Nevada under the category of local support received.
Dr. Pickens said the local support showing approximately $7 million received in Nevada for higher education (Exhibit C, page 38), represented tax support, contracts and grants. Further, the information on the chart was obtained from the National Center for Educational Statistics, Integrated Postsecondary Education Data System (IPEDS), based on what Nevada’s institutions reported to the federal government in 1995-96. He pointed out that local government also included school districts. An example would include community colleges and other institutions that enroll high school students. Payments in those instances are made from the high school to the community college. Anything from a local entity or government that was counted as revenue to the institutions was placed in that category.
Dr. Pickens concurred with Chairman Raggio’s comments and stated that in many states the support for community colleges comes from local property taxes which were provided to the institutions. Thereafter, the state might deduct that sum from its general fund appropriation.
Chairman Raggio indicated it might be helpful to receive information from all states regarding the percent of funding that comes from tuition. Dr. Pickens said those figures would be possible to provide to the Committee. Chairman Raggio said the Committee has discussed the level of funding that comes from tuition in comparison to other western states, so that information would be helpful to the Committee.
Dr. Pickens responded that he would provide that information to the Committee, and that could be accomplished within the purview of the existing contract.
Chairman Raggio asked what “Grapevine” stood for on the table for Illinois State University. Dr. Pickens answered that “Grapevine” was a long-used term used for a publication issued by the Illinois State University for state fund appropriations.
Dr. Pickens said there was a better source issued by the Kent Halsted book published annually called Financing Trends, that includes local, general appropriations as well state appropriations.
Chairman Perkins asked whether the Committee had any additional requests or comments for Dr. Pickens. He additionally asked if any members of the audience wished to address the agenda item.
Mark Alden, UCCSN Board of Regents, thanked the Committee. He acknowledged that public systems of higher education were formula-driven, and private institutions were program-driven. He stated that he would like to see Nevada, as a formula-driven state, include more diversification programs and outcomes because, in his opinion, waste was created by the way formulas were driven. He asked how assurances could be developed so the state’s money was spent well, and how a program-driven aspect could be applied to state formulas.
Dr. Pickens answered that among the 30 formula-driven states there were formulas defined by outcomes. Examples of some of those outcomes included: Employer surveys, Student satisfaction surveys, Surveys of Alumni, Graduation records of examinations, scores from LSAT exams, progress to degree, and transfers from community colleges to 4-year institutions. Dr. Pickens related that he would pay particular attention to that issue in reviewing the 30 formula-driven states.
Regent Alden stressed the fact that the state received no local funding so the $7 million reflected in the chart presented by Dr. Pickens should be changed. In addition, Regent Alden stated he was proud that the state’s tuition was one of the lowest in the state, but would agree that a review of other state’s tuition rates would be helpful.
D. Consultant Status Report – Dr. Larry Leslie
Dr. Larry Leslie, University of Arizona, introduced Dr. Scott Thomas, and stated that both of them work at the Center for the Study of Higher Education at the University of Arizona, where they study and work on grants and contracts in the area of finance and economics of higher education.
Dr. Leslie informed the Committee that Dr. Thomas earned all of his degrees from the University of California at Santa Barbara. Dr. Thomas is an expert in quantitative analysis and worked for a few years at the University of Hawaii in that capacity. Also, Dr. Thomas recently completed a book on quantitative methods of research.
Dr. Leslie stated that he earned his degree from the University of California at Berkeley. He has been working in the area of the economics of higher education for approximately 30 years for many organizations in many states. Dr. Leslie advised the Committee that he worked for over 20 years as the chief expert for the Department of Justice for financial matters relating to higher education.
Dr. Leslie thanked the Committee for allowing him to serve the state in the study of funding of higher education. Dr. Leslie indicated it was his understanding, through instructions from staff that he should first look at the national data sources and to secure objective data about peer groups. Thereafter, the Committee and the institutions would provide input prior to finalizing a list of peers.
Continuing, Dr. Leslie informed the Committee that he and Dr. Thomas would describe what tasks they have completed to date, and then solicit comments from the Committee. He explained that the Committee’s feedback was a critical component to his consulting work.
Chairman Raggio stated that the Committee just received the supplemental peer information a couple days ago and would need an explanation of the codes used on the sheets provided (Exhibit E1 to E7).
Dr. Thomas explained that there was a misunderstanding on what was to be delivered to the Committee and the data that was provided did need some interpretation. He stressed that usually information was supplied in a summary format.
First, Dr. Thomas discussed the criteria used in obtaining the peer information. He stated that the criteria for the peer analysis came directly from the language in the Agreement, and was prioritized as follows:
(1) Mission – Dr. Thomas explained that by using the Carnegie Classifications, institutions with similar missions were identified.
(2) Programs – Next, Dr. Thomas stated the institution missions were divided into three different categories. There were approximately 275 different degree areas that were categorized into 50 classifications of instructional programs. This resulted in three category distinctions: High-Cost Programs, Mid-cost Programs, and Low-cost Programs. For example, an engineering program (high-cost) would be more expensive to operate than a Humanities program (low-cost), and doctorate programs are more expensive to award than associate’s degrees. He indicated that within the coming week he would be providing the Committee with a full matrix showing the classification of the programs into the three cost areas.
(3) Location – Dr. Thomas stated that 4-year schools had more involvement with state governance and finance policies. Whereas, at the community college level, distinctions can be identified between urban community colleges and rural community colleges and how those colleges interact with the community, funding policies, etc.
(4) Enrollment – This criteria was used to locate institutions within the same size and economies of scale. Dr. Thomas said he looked at the size of enrollment, FTE enrollments, and full-time to part-time ratios.
(5) Expenditure Patterns – Dr. Thomas stated that this screen emphasized expenditure patterns on research, teaching and service.
(6) Revenue Patterns – Dr. Thomas said that another criteria was revenue patterns and revenue sources for the institutions; acknowledging that Nevada was very state-reliant on its funding for higher education.
Dr. Thomas stated that in order to develop measurements of this criteria, data was obtained from several sources: The National Association of State Budget Officers, The United States Census Bureau, The National Association of College and University Business Officers (NACUBO), The National Center for Education Statistics, the United States Department of Education, the IPEDS, Research Associates, and Kent Halsted data. Additionally, Dr. Thomas advised that for validity, the above data was supplemented with information from sources such at the United States News.
Chairman Raggio announced a short recess at 11:10 a.m. The Committee reconvened at 11:25 a.m.
Continuing, Dr. Thomas began describing the codes used on the information provided to the Committee on peer institutions (Exhibit E1-E7): He noted that the codes were in listed in order of priority and were identified on the first page of each institution’s packet. The institutions included in the peer analysis included:
· University of Nevada, Reno
· University of Nevada, Las Vegas
· Truckee Meadows Community College
· Western Nevada Community College
· Community College of Southern Nevada
· Great Basin College
Codes for Institutional Characteristics:
· LEVEL – Level of institution as defined by the U.S. Department of Education. Level 1 is four or more years, baccalaureate degree or higher. A value of 2 equates to institutions that were at least two years but less than four years, below baccalaureate programs, but corresponding to all associate programs in the Carnegie Classifications.
· ID – This code represents the Identification Number given to the institution from the National Center for Education Statistics.
· LOCALE – The variable in LOCALE is the degree of urbanization. For instance, a value of “1” is a large city, defined as the central city of a metropolitan area, population of greater than 750,000 people. A value of “2” represents a mid-size city, defined as a city having a population of less than 250,000 residents. A value of “3” is the urban fringe of a large city, or any incorporated place within a metropolitan statistical area. Value “4” is the urban fringe of a mid-size city. Value “5” is a large town, defined as a population greater or equal to 25,000 in the outside of a metropolitan statistical area. A value of “6” is a small town, defined as an incorporated place with a population of less than 25,000 and greater or equal to 2,500 residents located outside a metropolitan statistical area. Value “7” is a rural area, defined as an unincorporated place as designated by the United States Census Bureau.
Chairman Raggio asked whether the information for LOCALE was derived from the city limits of the location of an institution, or whether the entire metropolitan area was used. In response to Chairman Raggio, Dr. Thomas said the source used for LOCALE was the National Center for Education Statistics, and was based on the metropolitan statistical area in which the institution was located.
· GENTELE – This code represents the general telephone number of the institution.
Turning to Program Characteristics, Dr. Thomas explained that the institution identification number and name would be on these sheets, along with four other columns:
· PCTAHCST – This represents the percentage of high cost programs.
· PCTAMCST – This represents the percentage of middle cost programs.
· PCTALCST – This represents the percentage of low cost programs.
· PCTVTECH – This represents the percentage of vocational and technical programs.
Dr. Thomas directed the Committee to the Revenue Characteristics, and stated that the information provided in the charts represented data from Fiscal Year 1996-97 and Fiscal Year 1997-98. The codes in each column, which were self-explanatory, represented the following categories:
· revenue from tuition and fees
· revenue from federal government
· revenue from state government
· revenue from local government
· revenue from gifts, grants and contracts
· revenue from endowment
· revenue from sales and services
· revenue from auxiliary services
· revenue from other sources
Dr. Thomas indicated that the next chart dealt with Expenditure Characteristics for Fiscal Year 1996-97 and Fiscal Year 1997-98:
· percentage of instructional expenditure
· percentage of research expenditure
· percentage of public service expenditure
· percentage of plant operation and maintenance expenditure
· percentage of institutional support expenditure
· percentage of scholarship and fellowship award expenditure
· percentage of academic support expenditure
Dr. Thomas turned to Enrollment Characteristics (Exhibit E), and stated that the figures represented on those charts were for 1996 and 1997:
· fall student FTE
· fall student headcount
· percentage of students part-time
· percent of Black, non-Hispanic students
· percent of American Indian/Alaskan Native students
· percent of Asian/Pacific Islander students
· percent of Hispanic students
Dr. Thomas related that Enrollment Characteristics for the 4-year institutions also included statistics pulled from the U.S. News and World Report dealing with percentage of classes with under 20 students, more than 50 students, average graduation rates, selectivity, acceptance rates, average GPA of high school freshmen, SAT/ACT scores, and freshmen retention rate.
Turning to the Faculty Characteristics, Dr. Thomas stated those charts included the following codes:
· total full-time faculty for 1997/98
· percentage of full-time faculty tenured or on tenure track in 1997/98
· FACSTRAT – Faculty student ratio (calculated from IPEDS) based on the number of full-time faculty and the student FTE. This number will be substantially higher for institutions that have substantial part-time enrollments than for institutions predominantly full-time.
· FACSTRA – Faculty student ratio (calculated from U.S. News and World Report) based on faculty and student FTE.
· PCTFT – percentage of full-time faculty
· PCTCTA – percentage of classes taught by teaching assistants
Dr. Thomas asserted that the financial data was provided for informational purposes only. He advised that the information could be provided to the Committee in a summary format that would be more coherent for the Committee’s use.
Dr. Thomas stated that a report (Exhibit E4) was also provided which contained summaries of state, local and federal revenue sources for the 2-year schools. Directing the Committee to Nevada’s statistics, the report revealed that 63 percent of funding for the community colleges in Nevada comes from state revenues. The first column in the report lists the percentage of revenues in FY 1996 that came from tuition. The second column represents the percentage of revenues that came from federal government. The third column is the percentage of revenues that came from the state. The fourth column reflects the funds from local sources. The fifth column reports revenues received from private gifts and grants. The sixth column of the report lists the revenue received from endowments. The seventh column shows the percent of revenue from sales of educational services. The eighth column shows the percent of revenue from auxiliary services, and the final column shows revenues from other sources.
Chairman Raggio asked what source was used to complete the report. Dr. Thomas replied that the information came from the National Center for Education Statistics, Integrated Post-secondary Education Data System (IPEDS). In addition, attached to the Report was Appendix C, a categorization of community colleges that was used to help guide his research efforts. Appendix C groups the colleges into six groups, ranging from single-college districts with FTE enrollments of less than 1,000 to multi-college districts. In response to Chairman Raggio’s inquiry, Dr. Thomas stated that Appendix C was comprised from a document provided by the National Association for College and University Business Officers. He stated that full documentation for all the information provided to the Committee would be forthcoming. He reiterated that the format to which the information was provided to the Committee was not the fashion he normally would provide deliverables. However, there were misperceptions on his part on what was to be provided.
Turning to the document entitled, “Proposed Peers and Alternates” (Exhibit D-1), Dr. Thomas informed that they applied the criteria and data across the six institutions in the following fashion:
1. University of Nevada, Las Vegas
Dr. Thomas stated that UNLV was distinctive because it is a Carnegie Masters I institution that awards a significant number of doctoral degrees. The two dominant screens in selecting peers for UNLV were Carnegie Classifications and institutions within that Carnegie Classification that awarded doctoral degrees and had similar program distribution in terms of high-cost, mid-cost, and low-cost programs. Further criteria included: Enrollments, Urbanization, Expenditures & Revenues.
Dr. Thomas explained that many things can happen when screening institutions for peer groups. For instance, when applying Carnegie Classification awarding doctoral degrees, approximately 32 comparable institutions in the United States show up after that first screening. Then, looking at similarity in program structure, the number of comparable institutions becomes further reduced. After the additional criterion was applied, very few institutions remain.
Dr. Thomas related that seven peer institutions were identified for UNLV, five primary and two alternates:
1. University of Arkansas at Little Rock
2. Boise State University
3. Eastern Michigan University
4. University of North Carolina at Charlotte
5. University of Texas at El Paso
1. James Madison University
2. University of Northern Iowa
2. University of Nevada, Reno
Dr. Thomas stated that UNR was classified as Carnegie Doctoral II institution, with a medical school, and there were few of these across the country. In fact, there were only two others. Therefore, the initial screen on Carnegie Classifications was expanded to include Doctoral I and Research II. Dr. Thomas reminded the Committee that they were looking at existing program structures as of Fiscal Year 1997-98. Programs established after that time were not included in the data.
Dr. Thomas said with the program expansion to Doctoral II through Research II, there were only 17 institutions across the country with medical programs. The next screening included program structure, location, enrollment, expenditures and revenues. The final set of peers included five primary peers and two alternates:
1. Indiana University-Purdue University at Indianapolis
2. University of Louisville
3. Mississippi State University
4. University of Missouri at Kansas City
5. University of North Dakota
1. Kansas State University
2. Washington State University
Dr. Thomas stated that the procedure for the ranking of community colleges in the state was very similar to the procedure used for 4-year schools. First, they looked at the colleges that awarded Associate’s Degrees. The next screening was limited to the NCUBO categories – the six different groups for community colleges.
3. Community College of Southern Nevada
Dr. Thomas stated that CCSN was categorized into NCUBO category five, institutions with more than 10,000 students. However, CCSN was on the border of that grouping and CCSN was unique in the sense of its size. Since CCSN was close to the border, they dropped 2,000 students to identify peers for institutions having enrollment of 8,000 and above at the second level, with the first level being Associate awards. Clearly, CCSN is an urban institution so the locale screen was set in place, and then program structure was screened. Dr. Thomas stated that high, mid, and low-cost programs were re-ranked for 2-year schools since community colleges do not offer doctoral programs. Five primary peers and two alternate peers were identified for CCSN:
1. Broward Community College (FL)
2. Portland Community College (OR)
3. North Harris Montgomery Community College District (TX)
4. Salt Lake Community College (UT)
5. Tidewater Community College (VA)
1. Pasadena City College (CA)
2. Tarrant County Junior College (TX)
4. Great Basin College
Dr. Thomas stated that GBC was an Associate’s Arts school, limited to the NCUBO 2 category, institutions with enrollments of greater than 1,000 and less than 2,500. The same screening was used for all community colleges: First: Carnegie Classification; Second: Size; Third: Locality; and Four: Program Cost. Again, five primary peers were identified and two alternates:
1. Colorado Northwestern Community College (CO)
2. Central Oregon Community College (OR)
3. Western Wyoming Community College (WY)
4. Rogue Community College (OR)
5. Southwestern Michigan College (MI)
1. North Central Michigan College (MI)
2. Treasure Valley Community College (OR)
5. Truckee Meadows Community College
Dr. Thomas stated this was an associate in arts school in NCUBO category 3, which included institutions with enrollments of 2,500 or greater, but less than 5,000 located in suburban through semi-urban areas. The screening resulted in five primary peers and two alternate peers:
1. Central Florida Community College (FL)
2. Manatee Community College (FL)
3. Kalamazoo Valley Community College (MI)
4. Green River Community College (WA)
5. Laredo Community College (TX)
1. South Puget Sound Community College (WA)
2. College of Marin (CA)
6. Western Nevada Community College
Dr. Thomas related that WNCC was an associate in arts college in NCUBO category 3, with enrollments of more than 1,000 and less than 2,500 in non-urban through rural areas with similar program structure. This resulted in establishing five primary peer institutions and two alternates:
1. Mendocino College (CA)
2. Hill College (TX)
3. Northeast Texas Community College (TX)
4. Grays Harbor College (WA)
5. Peninsula College (WA)
1. Chipola Junior College (FL)
2. Cloud County Community College (KS)
Dr. Leslie stated he was aware that GBC now has a 4-year baccalaureate degree program in education.
Chairman Raggio directed the Committee to the peer institution analysis for UNR and UNLV. Under the category for LOCALE, he asked why the Reno metropolitan area was categorized as a “2” which, according to Dr. Thomas’ explanation, would be larger than a “3” as shown for UNLV. That was confusing since the metropolitan area for Las Vegas is at least three times the size of the Reno metropolitan area.
Dr. Thomas replied that the LOCALE variable was provided by the National Center for Education Statistics and should be treated cardinally, not ordinally. Secondly, Dr. Thomas related that UNR and UNLV were both deemed less sensitive to the locality issue than the community colleges.
Chairman Raggio asked whether the definitions used for the Expenditure spread sheets (Exhibit E), such as Instruction, Academic Support, etc., were used universally. In other words, was the definition for Academic Support used by other institutions comparable to the way that category was used in the formulas in Nevada?
Dr. Leslie replied that every institution in the country used a standard definition as defined by NCUBO. Occasionally, minor differences were noted because of the way a particular expenditure was handled, or due to local reasons. An example of some differences was athletic expenditures, which could be a large item in some budgets. If the institution operated its athletic enterprises on either a profit-making or break-even basis, the rules were to include it as an auxiliary enterprise. If that’s not the case, then the expenditures would be classified into two or three categories.
Chairman Raggio said the Committee would need to understand how athletic funding fit into the formulas.
Turning to another matter, Chairman Raggio acknowledged the cut-off year (1997-98) was used by Dr. Leslie and Dr. Thomas in their analysis, and asked whether that took into consideration the law school at UNLV. Dr. Leslie said the law school at UNLV was not considered in the peer analysis but if the Committee desired to extend the timeframe beyond 1997-98, the law school should be included in the analysis. He added that it was his understanding that one of the reasons for doing the site visits was to obtain additional data. Therefore, any major new programs that were established after the designated timeframe could be added to the research.
Chairman Raggio noted that some of the peer institutions selected for the community colleges were from the same state. He asked whether that would be appropriate or whether it would be more appropriate to have peers from five different states.
In response, Dr. Leslie explained that the problem with the community college screening was that the major criterion was funding patterns. There are three models of funding: 1) Total state funding (Nevada); 2) Heavy local funding (Arizona); and 3) A combination of state and local funding. Therefore, in screening the data, decisions had to be made determining whether it was better to take one or two peers from a single state, or choose a state that had different funding methods.
Chairman Raggio pointed out that for Great Basin College, out of the seven primary and alternate peers, three were located in Oregon, and he questioned how helpful that would be to the analysis. He reminded the consultants that the goal of the Committee was to determine to what extent, if any, the funding formulas would be changed.
Dr. Leslie indicated that he could take a look at the reasons why other institutions were not considered, and perhaps with some interaction with the Committee, and a different choice could be made.
Dr. Crowley expressed concern that the first criterion for establishing peer groups was Carnegie Classifications since that data was approximately ten years old. It was his understanding that the Carnegie Classifications might be abandoned because they have been misused. Possibly another type of classification scheme could be used. He asked Dr. Leslie whether using Carnegie Classifications was an appropriate method for screening peers, or whether a different method would reflect a more restrictive group of peers.
Dr. Leslie answered that he was uncomfortable using the Carnegie Classifications since dramatic changes have occurred. Further, he understood Dr. Crowley’s concern since he was presently working with Carnegie on proposed revisions. He stated he would like to receive input from the institutions on changes that have occurred to programs since the 1997-98 IPEDS data. The major reason for the site visits was to obtain missing data, obtain more current data, and validate the data. Continuing, Dr. Leslie stated that there was another classification system that was used by the United States Department of Education, and he could examine that source if the Committee so directed.
Dr. Harter asked whether Dr. Leslie and Dr. Thomas used the same criteria, in the same order, to evaluate both UNR and UNLV. Dr. Thomas stated that was correct. Dr. Harter noted that UNR, with a medical school, was placed into a group of peers classified at a higher level. Whereas, UNLV, with its rapid enrollment change, has less weight based on the chosen criteria. She questioned whether the criteria should be re-ordered, given the different shapes and trends of development of each institution. Dr. Harter pointed out that in 1997, the year used for determining the peer analysis, UNLV did not have a law school or a physical therapist program, and the architecture school had not been established. Dr. Harter said she was trying to decipher the ways in which Carnegie Classifications, a medical school, and land/grant related programs could drive one institution into a higher category, and the lack of those items brings another institution downward.
Dr. Leslie responded that during the analysis process, he did not consider internal equity within the state, but that could be a criteria if the Committee instructed him to do so. In order to obtain an adequate number of peers for UNR, they had to move that institution into the categories of Doctoral I and Research II, and that would appear to put that institution at a relative advantage. In obtaining peers for UNLV, an adequate number of peers were located within the Carnegie Classification, so no other categories were needed. However, if internal equity was a major consideration, then program structure at UNLV could be reviewed.
Dr. Harter said the Carnegie Classifications seemed to play an enormous role in the group of peers that became immediately known at the first screen, but that number one criterion placed UNLV at a disadvantage. She clarified that she was not arguing against UNR, but the first criterion appears to put UNR into a group of elite peers, yet that same criterion placed UNLV into a group of peers reflective of the past, not the present. She opined that it was evident that the peers selected for UNLV placed UNLV at a disadvantage for the study.
Dr. Leslie answered that it might be wise to determine the present classifications of UNR and UNLV, or simply obtain the most current information on the institutions during the coming site visits.
Dr. Richardson said he too, was surprised at the peer comparison groups for UNLV. However, on another issue, he asked whether there was a data set that allowed for comparisons for percentage of courses taught by part-time faculty. Dr. Thomas replied that information on full-time, tenure track data was reported by IPEDS and that was the only such data through the United States Department of Education. However, the U.S. News and World Report data was commercially collected by the Wintergreen/Orchard House group which performs supplemental surveys to the IPEDS data collection. Dr. Thomas stated that data was available commercially not publicly.
Adding to Dr. Richardson’s inquiry, Dr. Leslie said there was a possibility that the Community College Association collected that type of data, but he was uncertain whether 4-year institutions were included..
Mr. Snyder stated he supported peer analysis as a useful tool, but acknowledged there were associated risks. He expressed concern that the data used in the peer institution analysis was old and perhaps the methodology was somewhat challenged by not taking into consideration the impact of growth and program changes. Mr. Snyder stated that his focus was on UNLV, having served on the Board of Trustees for the UNLV Foundation for the past 12 years, and he has participated in the strategic planning process for that organization. Mr. Snyder said that considering the status of UNLV at present and the peers shown, there was no comparison in virtually every criterion. He opined that the identification/screening process needed to be solid. He noted that it was evident from the MGT equity study completed in April 1999, that obtaining peers was difficult, particularly in a short timeframe. Mr. Snyder said the Committee should spend whatever time was needed to obtain appropriate peers before moving forward.
Dr. Leslie acknowledged Mr. Snyder’s comments about peers, and stressed that the Committee should clearly define the direction peer analysis would take. However, as to the issue of growth, he posed the following hypothetical: Suppose that an institution grew rapidly without adding new programs. In that instance, the institution would be favored as not growing in terms of its national structure. Therefore, the question becomes “what are the implications of that growth?” On the other hand, an institution adding extensive new programs would be expected to have major implications in the area of growth, which would be a factor in peer group selection. Dr. Leslie pointed out that some of the institutions selected in the UNLV potential list of peers were selected over other peers because of rapid growth.
Assemblyman Perkins inquired into the prioritization methods of Dr. Leslie when establishing peers. Dr. Leslie replied that the only specific input he received from the Committee, pursuant to the Agreement, was that program responsibilities were to be the base. Beyond that, there were no suggestions for an order of prioritization on other criteria. After the program screening was completed, Dr. Leslie and Dr. Thomas integrated the next criteria in consideration with the items on the list provided by the Committee through the Agreement (Exhibit C, page 20).
Mr. Perkins acknowledged that growth was a difficult factor in peer analysis and the affect peer groups would have on the ultimate outcome of the Committee’s work. He expressed concern that UNLV and UNR would be most affected by the peer comparisons and both of those institutions have grown since the last analysis. In addition, he was concerned that the study would be using Carnegie Classifications for UNLV and UNR that were used 12 years ago.
Dr. Leslie answered that perhaps the Committee should look at something other than the Carnegie Classification system for the study. Or, the Carnegie definitions could be used together with establishing the current category for each institution.
Senator Raggio reminded the Committee that the consultant was not provided with any specifics on determining peer groups, other than what appears on page 2 of the Agreement (Exhibit C, page 20). Senator Raggio read that portion of the Agreement into the record:
The contractor agrees to identify a group of peer institutions for seven of the institutions included in the system. In developing this analysis, the contractor agrees to locate comparable institutions from states and local communities whose ability to support public higher education and whose higher education patterns, economies and populations are relatively similar. The primary basis for comparison will be similarity in program responsibilities. In comparing institutions, the contractor will consider similarity of enrollment measures and other institutional characteristics, including the emphasis of the institutions on instruction, research and public service. The contractor also agrees as part of the peer analysis, to collect data concerning characteristics of the institutions related to finances, instruction and facilities and to establish the proper benchmarks for equitable funding parameters.
Chairman Raggio commented that the consultant was not directed to use Carnegie Classifications or anything else for that matter. He acknowledged the concerns expressed by the Committee regarding the Carnegie Classifications but the Committee needed to provide additional input to the consultant so he can properly complete the task of locating peer comparisons. Chairman Raggio stressed that the Committee could not allow the institutions to determine the peer institutions because that would not be a beneficial study.
Senator Titus extended her appreciation to the consultants for providing, based on general directions from the Committee, a list of potential peers. However, she questioned the worked performed by the consultants because:
· Old data was used;
· The classification system is problematic;
· The law school at UNLV was left out; and
· Growth, the most important factor, was not used as criteria.
Senator Titus said she did not see what similarities were between the institutions chosen as potential peers for UNLV. She asked whether Boise State University and the University of Little Rock at Arkansas were growing in the same rapid fashion as UNLV. She asked Dr. Leslie to explain how the potential peers on the list provided (Exhibit E1) compared to UNLV.
In response to Senator Titus, Dr. Leslie said there was a fundamental dilemma in the work performed because he was required to use data common to every institution considered. Through special efforts by Dr. Thomas, they were able to obtain data from IPEDS for 1997-98, which data is only one academic year behind. Obtaining the same data across all of the institutions was difficult in the screening process. He agreed that the most recent information should be obtained for each institution and used for the screenings. Once that has been obtained, the analysis would be consistent.
Dr. Leslie informed the Committee that during the screening process for peer groups, variables were identified for importance or relevance in the screening process.
Senator Titus opined that the growth factor should be placed as a higher priority in the screening process. She pointed out that the consultants have advised that DRI could not be compared because there were no potential peers for those institutions. She suggested that perhaps UNLV did not have any peers as well due to the rapid growth that it was undergoing. She asked whether peers were even needed for the study.
Dr. Leslie reiterated that the Committee should determine the purpose of using peers in the study. Perhaps if peers could not be located, they should not be used. He pointed out he was still looking at obtaining more information for DRI and peers might be located based on that information. He clarified that he did not know growth would be a critical variable for some of Nevada’s institutions, but he was willing to look at that factor.
Regent Derby stated that attempts at peer comparisons have been made on at least three occasions in recent years and there was never an easy consensus to the process. However, peer comparisons were important and adequate time was needed for the peer selection process in order to be successful. Regent Derby asserted that the consultants simply provided the Committee with a preliminary list of potential peers, but the site visits would be critical in finalizing that list.
Regent Derby asked how the Committee planned to use the peer comparison information in the development of formulas. Once that was understood, the Committee could determine whether or not peer comparison was a critical aspect to the process.
Chairman Raggio interjected that the consultants were data-collectors, but it was the charge of the Committee to determine whether any change or modification to the formulas for the funding of higher education was required. The Committee needed to be certain that the peer institutions included as part of the data collection were as reasonable as possible. Based on the Agreement, the consultants provide a list of potential peers and the Committee was required to approve that list, allowing the consultants to conduct on-site visits of those potential peers.
Chairman Raggio stressed that the Committee should recognize that the report of the consultants from the peer visits was simply to provide the Committee with the necessary data in which to make recommendations to the Legislature regarding the funding structure of higher education.
Regent Derby asked whether the consultants would be performing site visits to the potential peers prior to the final selection of peers. Dr. Leslie responded that there was a problem in the process in that after potential peers were selected and site visits were completed, several peers might be eliminated. So, if the information could be supplied ahead of time that would allow for a more positive response in identifying potential peers. He stressed the very minimum would be to obtain the most current information for the institutions in the state.
Chairman Raggio pointed out that the Committee could provide the consultants with updated information on all the institutions in the state and then the Committee could meet again to make the final approval of the peer institutions to be designated.
Regent Sisolak agreed with Chairman Raggio’s comments that the goal was to obtain peer institutions as reasonable as possible. However, he also agreed with Senator Titus that growth was a major issue and the potential peers selected for UNLV were not comparable. He commented that the use of dated information would negatively impact a high growth institution more than a low growth institution.
Dr. Leslie responded that growth led to fundamental changes to institutional goals and that sometimes resulted in a negative impact. However, that was just an assumption. Therefore, the first step was to determine the most current programs for each of the institutions in the state, including other up-to-date information pertaining to those institutions. Dr. Leslie said after that information was provided, he could better determine if the fundamental changes at UNLV are of a comparable magnitude so that to say that adding a law school and the other programs, if those are really substantial programs that are somewhat parallel to the idea of the medical school, you’ve got a strong case for exactly what you’re saying. But, don’t accept that fundamentally. Because, fundamentally, if you don’t make that assumption, you’ve got more money, not less to do your job if you’ve got enrollment growth because you get more money from the state for enrollment.
Regent Sisolak asked Dr. Leslie to explain the screening methods when looking at institutions with medical schools. Dr. Leslie said that medical schools were powerful organizations and comparisons should not be made between schools with a medical school and schools without a medical school.
Regent Sisolak asked whether the size of the medical school was factored into the peer comparisons for UNR. Dr. Leslie answered that the size of the medical school was not compared to other institutions but was compared to the size of UNR.
Dr. Thomas said that in his analysis, medical schools were not weighted in terms of enrollment or size; however, budgets were compared. He pointed out that if the medical school was not considered in UNR peer comparisons, a very different set of peers would have developed.
Regent Sisolak asked whether the disparity of the size of medical schools made a difference in the list of potential peers. Dr. Leslie replied that if the Committee so directed, he would look at comparing the sizes of the medical schools for the list of potential peers for UNR. Regent Sisolak opined that such a review would be beneficial.
Lastly, Regent Sisolak asked whether it might be possible that UNLV was in the same situation as DRI; where potential peers could not be located. Dr. Leslie informed the Committee that seven peer studies have been performed in Arizona and each one of those studies have been rejected. Dr. Leslie stated that it was difficult to identify peers, and most people were only happy with the peers that receive more funds. Whereas, there always seemed to be a basis for rejecting peers. Dr. Leslie reiterated Chairman Raggio’s comments in that as consultants they can provide the data and make recommendations, then the Committee uses the data for the needs and uses intended by the Committee.
Chairman Raggio suggested that the Committee review the data that was compiled relative to the peer comparisons, then meet again. In the meantime, input from the Committee and the Working Group could be constructed and provided to the consultants and the Committee could approve a group of peer institutions, based on the up-dated information.
Mr. Snyder concurred with Chairman Raggio’s approach and suggested that a subcommittee be designated to assist the consultants in the screening process for potential peers. For instance, maybe more dialogue should be occurring between the consultants and the universities while the screening process was underway to help define the institutions and the programs at each institution. Chairman Raggio agreed that the consultants needed to be advised of new programs or considerations that have been established at the institutions since the cut-off date used by the consultants in the screening process. However, the institutions should not determine the peers because that would defeat the purpose.
Speaker Dini stated that when the consultants perform the institutional site visits in the state; they will see what programs are underway on those institutions. He noted that all the peer institutions selected for UNR were from the Midwest or southern regions, and that might not be appropriate for UNR.
Chairman Raggio opened the meeting to public comment.
Regent Mark Alden stated that the Committee was heading in the right direction; however, he urged the Committee to look at the programs established at both of the universities because both UNR and UNLV would be impacted by the peer analysis.
Chairman Raggio asked for suggestions on the best process to be used to obtain and provide the needed information to the consultants so that the peer analysis could be completed. He mentioned that the information should be provided to the consultants within three weeks.
Dr. Thomas Anderes, Interim Chancellor, UCCSN, suggested that he could work with the Presidents of the institutions and the Working Group of the Committee to identify areas within the peer analysis and correspond with the consultants. Chairman Raggio agreed with Dr. Anderes, restating that the process should be equitable.
Dr. Leslie clarified that he would be obtaining the information from the Working Group or subcommittee rather than the institutions directly. Chairman Raggio replied that the Working Group would supply the consultants with the material changes in the programs and operations of the institutions that were relevant. Thereafter, the consultants would report to the Committee with either the same list of potential peers or a revised list of potential peers. The Committee would then be able to approve the list and authorize site visits of those institutions.
Dr. Leslie stated the process identified by the Chairman would be helpful and was acceptable to him, and he would rather work through a group than to be lobbied by individual institutions.
Dr. Anderes stated that the information would run through one source, the UCCSN office, so the consultant would not be subject to dealing with each of the constituents. Dr. Leslie said he was concerned with completing all the site visits in a timely fashion.
Chairman Raggio stated that as soon as Dr. Leslie was able to provide the list of potential peers, a Committee meeting could be scheduled in order to approve that list and allow the site visits to commence.
E. Report on the Working Group representatives who will participate in on-site peer visits
Mr. Burke directed the Committee to (Exhibit C Tab E). He stated that during the January 5, 2000, meeting of the Working Group, participants were recommended for the on-site visits to be conducted by Dr. Leslie, subject to the approval of the Committee. Both primary and secondary representatives were listed, but the secondary representative would only participate if the primary representative was unavailable. In addition, Mr. Burke advised the Committee that the participating institutions would pay travel costs for the institution’s representatives.
F. Business Officers Status Report
Chairman Raggio noted that the Business Officers’ Status Report was provided in the meeting packet (Exhibit C, Tab F). He asked Dr. Anderes to explain the contents of the report.
Dr. Thomas Anderes, Interim Chancellor, UCCSN, stated that the report contained what the UCCSN Business Officers would like the Committee to consider regarding the principles/issues he brought forth at the previous Committee meeting. He stated the status report was an attempt to put the principles/issues into a meaningful format for the universities and community colleges.
He highlighted the activities of the Working Group pertaining to the status report. He explained that the status report was in two parts: One for the universities and one for the community colleges. The Business Officers for those two groups have made suggested revisions and/or additions to the existing formulas that would be designed to establish a basis for projections that were more realistically reflective of the funding requirements.
Continuing, Dr. Anderes said that the contents of the status report attempts to relate the issues raised at previous meetings to the existing formulas. The Committee’s acceptance of the revisions would create a new, higher baseline to determine funding for higher education.
Dr. Anderes stated the Business Officers were suggesting that there would be a new formula designed for technology. In addition, a university instruction formula would be created that would be built on levels of instruction and cost by discipline, which makes that formula more complex, but at the same time should make it more accurate. Further, some variables have been revised within the functional support formulas to try to update those formulas to what has changed in the past 12 years.
Dr. Anderes indicated that the status report suggests the implementation of a one percent increment for instructional program developments. He informed the Committee that that did not exist presently, but it was something that was occurring across the country, and as new program direction and delivery of instruction were discussed, an increment of funds was being sought to support that concept.
Further, Dr. Anderes said that the status report contained a suggestion to eliminate or revise the 60/40 full-time/part-time faculty ratio at the community colleges. Another suggestion would be to fund new positions at the same level, and put equipment replacement on a seven-year cycle as opposed to the present 20-year cycle.
Dr. Anderes confessed that all of the suggestions outlined in the Business Officers’ Status Report (Exhibit C, Tab F) created a higher level of funding. Although the business officers were aware that the status report appeared to be directed at increasing funding received for higher education, the scope was actually to inform the Committee of the correct number that was required whether or not it was funded. The business officers were fully aware of the politics of funding formulas; however, the combination of discussions of the Committee, data provided by the consultants, and any changes to the formulas would more accurately reflect the current state of higher education funding and that was the most important aspect of the study.
Finally, Dr. Anderes informed the Committee that the status report was not a final product because the UCCSN was continuing to develop alternatives for the Committee and the consultants to review regarding research, non-formula activities, DRI, ways in which higher education could do things more productively to support the state, and other states’ activities in the funding of higher education.
Chairman Raggio stated that the Committee would accept the report with the understanding that it contained recommendations only.
Chairman Raggio asked whether the UCCSN was one of the agencies considered in the Governor’s Steering Committee. Dr. Anderes replied that the Governor was undertaking several levels of review applicable to state agencies and the UCCSN was included in the intermediate level of review which required the UCCSN to provide the Governor with a great deal of information, background, and justification.
G. Response from MGT of America, Inc.
Chairman Raggio reminded the Committee that a response from Dr. Dan Layzell of MGT of America, Inc., was requested at the last Committee meeting and that response was contained in the meeting packet (Exhibit C, Tab G). Also under Tab G was the information requested regarding savings incentive plans used by other states. Both items were provided to the Committee for informational purposes only.
Brian Burke, Legislative Counsel Bureau, stated that the Working Group was continuing to collect information on savings incentive plans from other states and a full report on that matter should be provided to the Committee at the April 2000 meeting. Therefore, the information under Tab G was simply preliminary information obtained to date.
H. Public Testimony
There was no public testimony.
I. Schedule for next meeting
Chairman Raggio stated that early April 2000 was suggested for the next Committee meeting. However, the Committee would have to adjourn until the call of the chair to allow time for the consultants to up-date the list of potential peers. He advised the Committee that once that information was received an earlier Committee meeting could be scheduled.
There being nothing further to come before the Committee, the meeting adjourned at 1:10 p.m.
Joi Davis, Committee Secretary
Senator William J. Raggio, Chairman
Dated: _______________________, 2000.