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 9:30 a.m. on May 11, 2000, at the Legislative Building, 401 South Carson Street, Room 4100, Carson City, Nevada.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Randolph Townsend
Senator Dina Titus
Assemblyman Joseph E. Dini
Assemblyman Bob Beers
Regent Jill Derby
Regent Doug Seastrand
Dr. James Richardson
John P. Comeaux
Dr. Carol Harter
Dr. Joseph Crowley
Dr. Richard Moore
Assemblyman Richard Perkins Excused
Regent Steve Sisolak Excused
Brian Burke, Senior Program Analyst
Mark Stevens, Assembly Fiscal Analyst
Dan Miles, Senate Fiscal Analyst
Brenda J. Erdoes, Legislative Counsel
William B. R. Daines, Deputy Legislative Counsel
Joi Davis, Committee Secretary
GUESTS IN ATTENDANCE:
Tom Anderes, University and Community College System of Nevada (UCCSN)
Larry Leslie, University of Arizona
William Pickens, Bluestone Enterprises
Sal Rinella, STRATUS
James Hawkes, STRATUS
Allen Ruter, Community College of Southern Nevada (CCSN)
John Richardson, Truckee Meadows Community College
Bob Dickens, University of Nevada, Reno
Lane Simonian, Truckee Meadows Community College
Mike Sauer, University of Nevada, Las Vegas
Stephen Wells, Desert Research Institute
Jack Hess, Desert Research Institute
Ashok Dhingra, University of Nevada, Reno
Bruce Shively, University of Nevada, Reno
George Scaduto, University of Nevada, Las Vegas
Dane Apalatequi, Western Nevada Community College
Andrew Clinger, State Budget Office
Linda Pierson, University and Community College System of Nevada
Glenda Krietlow, University and Community College System of Nevada
Fred Davis, Desert Research Institute
Carl Diekhans, Great Basin College
Orlando Sandoval, Nevada State College at Henderson
Jane Nichols, University and Community College System of Nevada
Exhibit A Meeting Notice and Agenda
Exhibit B Attendance Roster
Exhibit C Meeting Packet
Exhibit D Binder entitled An Intensive Study of the State Appropriations Formulas for the Support of Higher Education in 30 states, prepared by Dr. William Pickens.
Exhibit E A summary of Formula Factors and Approaches, prepared by Dr. William Pickens.
Exhibit F Amended Executive Summary to An Intensive Study of the State Appropriations Formulas for the Support of Higher Education in 30 states prepared by Dr. William Pickens.
Exhibit G Overhead Displays used by Dr. Larry Leslie, consultant.
Exhibit H Comparison of Current Formulas to UCCSN Recommendations, prepared by the Legislative Counsel Bureau, provided by Dr. Tom Anderes, UCCSN.
Exhibit I Peer Data on Academic Libraries (From IPEDS Survey – FY 1996), provided by Dr. Ashok Dhingra, UNR.
NOTE: All Exhibits are on file at the Research Library and Fiscal Analysis Division of the Legislative Counsel Bureau.
Chairman Raggio called the meeting to order at approximately 10:00 a.m., noting Assemblyman Perkins and Regent Sisolak were absent, excused. Chairman Raggio complimented the Committee for their attendance, recognizing that the members of the Committee comprise many segments of the community and everyone had busy schedules so he appreciated the time the members were able to provide to the Committee. He acknowledged the materials provided to the Committee for the meeting; indicating that the information was very helpful.
The Chairman indicated that he would be following the agenda as posted. In addition, he asked that anyone making presentations or comments be aware that the meeting was being recorded and could be accessed through the Internet. He asked if anyone needed to be accommodated out of order from the Agenda. Seeing none, he proceeded as scheduled.
B. Approval of Minutes
Chairman Raggio indicated that if there were no changes or corrections to the Committee minutes of January 27, 2000 and March 2, 2000, he would accept a motion for approval of the minutes that were included in the meeting packet (Exhibit C).
SPEAKER DINI MOVED TO APPROVE THE MINUTES OF THE
COMMITTEE MEETING OF JANUARY 27, 2000.
REGENT DERBY SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.
* * * * *
SPEAKER DINI MOVED TO APPROVE THE COMMITTEE
MINUTES OF MARCH 2, 2000.
ASSEMBLYMAN BEERS SECONDED THE MOTION.
Chairman Raggio noted that he was not in attendance at the March 2, 2000, Committee meeting; however, it was his understanding that as long as the Committee approved the minutes, he was able to sign them.
THE MOTION CARRIED UNANIMOUSLY.
C. Consultant Deliverable Report - Dr. William Pickens
Chairman Raggio acknowledged Dr. Pickens and thanked him for providing the Committee with his report on March 31, 2000, An Intensive Study of State Appropriations Formulas for the Operations of Public Colleges and Universities in Thirty States (Exhibit D). He commended Dr. Pickens for providing the Committee with a report that was easy to understand and the Executive Summaries for each of the 30 states was extremely helpful and went beyond the scope of the consultant contract.
Chairman Raggio asked that the Committee hold any questions or comments until after the consultants’ presentation.
Dr. Pickens provided the Committee with two items to be included in his report binder: A matrix entitled A Summary of Formula Factors and Approaches (Exhibit E), which was a short version of his report that could help guide the reader through the vast information contained in his full report. The second document was a revised Executive Summary (Exhibit F) to replace the Executive Summary contained in his report. Although the revised version did not differ much, it provided notations of page numbers in the full report that more easily directs the reader to detail on a particular subject or state. Dr. Pickens commented that in the 20 years he has been studying funding formulas for higher education, this report was the largest effort produced.
Dr. Pickens introduced his two colleagues, both invaluable to him. First, Dr. Sal Rinella and Mr. James Hawkes, both senior consultants with STRATUS, part of the JCM group in Los Angeles, California, specializing in higher education. In addition, Dr. Pickens thanked Brian Burke, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau. He emphasized that Brian was one of the best committee consultants he has ever worked with and he marveled at how Brian was able to process large amounts of information and still keep everyone informed and on track at all times.
Dr. Pickens said his presentation would be in three areas: 1) An overview of the project; 2) The conceptual ways of looking at formulas; and 3) Lessons learned from the study. He would also like to answer questions or address comments from the Committee.
Dr. Pickens said when he began the Intensive Study of State Appropriations Formulas for the Operations of Public Colleges and Universities in Thirty States, the Committee’s purpose for the study was to collect data concerning the formula funding of higher education in the support budgets. Therefore, no capital (except for maintenance) budgets were reviewed.
Originally, he presented a list of 30 formula states to the Committee; however, approximately ten of those states have either abandoned the formulas or no longer consider they are formula funding states. Although information has been included on those ten states, the 20 states remaining as formula funding states comprise the primary focus of his report. Finally, according to the contract, the report was to include an Executive Summary and a comprehensive explanation of funding methodologies for each state. The matrix (Exhibit E) served that purpose; whenever information was listed in official, written documents, or interaction took place with finance officers or others in higher education it was put in the matrix.
Dr. Pickens said the methodology that was used to complete the report was:
Continuing, Dr. Pickens related that after collecting information and preparing the document in written format, they found it helpful to categorize the formulas for the 30 states studied. He noted that there were more changes in the financing of higher education in the last five years then there have been the past thirty years entirely. In fact, many states (at least half) have made major, fundamental changes in the overall approach in the last five to ten years. In consideration of those changes, Dr. Pickens stated that the conceptually different approaches that states were following can be categorized as follows:
Many states use a combination of all approaches, such as the California Community College system.
Dr. Pickens said that the State of Louisiana’s peer-based approach was established with a list of institutional-type peers in 1997 but, politically, no one was happy with that set of peers so the idea was abandoned and the state sought assistance from the Southern Regional Education Board (SREB) to find institutions that could be compared with those in the state of Louisiana. Then the institutions in the SREB were organized according to the institutions in Louisiana. Since even a small change in an institution would place that institution in a different category, they consolidated the SREB categories then modified it to accomplish a positive approach to directly meet the needs of their state. Secondly, the state of Louisiana, in blending the cost-based approach and recognizing that some of the peers did not have the program mix that was present in the institutions statewide, the Texas cost-based approach was adopted to identify outliers. In other words, peers would be used and numbers would be run from those peers and if an institution with different programs or enrollments generated more than a five percent difference, (using Texas) that institution would receive more or less funding depending on the circumstance.
Although Louisiana is still an excellent example of the benchmarking, peer-based approach, that state has also modified that approach to meet specific state needs.
In response to Chairman Raggio, Dr. Pickens reiterated that the state of Louisiana adjusted the benchmark/peer-based approach in two fashions: 1) Changed the categories of the peers; and 2) Used the Texas methodology of applying different weights for students at the lower division, upper division, and graduate level for the different programs because even though some of the institutions fell within the middle of the peer category, there were different weights than the peers and the state wanted to consider that factor if it made more than a five percent difference.
Dr. Pickens informed the Committee that his report attempted to identify states that have done the best job, as a whole, of providing adequate resources, while still showing concern for equity and setting up a process of review for the formulas. Dr. Pickens directed the Committee to the amended Executive Summary (Exhibit F), which sets forth eight states whose approach to financing higher education was most notable: Maryland, Texas, South Carolina, Tennessee, California Community Colleges, Illinois, New Mexico, Kentucky. These states have the most interesting formulas for categories such as libraries and student services. Regarding special needs, Texas has a new formula approach to providing additional resources for disadvantaged students and California has an elaborate approach to providing resources for disabled students and re-entry students.
Dr. Pickens said there were four fundamental ideas or “lessons” that the consultants learned in reviewing the formal, written documents of each state and talking with system staff and finance directors from other states about their approaches to formulas:
Dr. Pickens concluded his presentation and asked if he could respond to any questions.
Regent Derby thanked Dr. Pickens for an excellent report and the usefulness of the information he provided. She commended Dr. Pickens for identifying states that approached formula funding in different ways. Acknowledging that Dr. Pickens opined that a “blended” approach to formula funding was desired, Regent Derby asked if he could identify a couple of states that have been successful in a blended approach to formula funding, keeping in mind Nevada’s specific issues.
Dr. Pickens stated that in addition to Louisiana, the state of South Carolina, despite its reputation for being strictly performance-based, has some interesting blends. Dr. Pickens asked Dr. Rinella to comment further. Dr. Rinella added that the state of Missouri would also be a good example of a blended approach. Further, South Carolina, which is a blend between a cost-based approach and a performance-based approach, with some benchmarking involvement, started by calculating a formula-generated need, which was done partially at cost and partially referencing peer-average costs, layered with 36 performance measures. The performance of each institution on those measures was then converted to a percentage. If an institution obtained a score of 95 percent under performance, they would receive 95 percent of the formula-generated need in the objective and benchmark cost portion of the formula. Continuing, Dr. Rinella related that on paper the percentage South Carolina received by the formula was dependent upon the scores of performance; however, grading is on a curve. Generally, institutions received a 90 percent score. The final analysis was that 10 percent of the total formula generated need was dependent upon performance. Dr. Rinella commented that a 10 percent exposure to loss was significant and caused individuals to perform according to the performance measures.
Dr. Rinella concluded South Carolina had a good blend of all three formula funding approaches.
Dr. Crowley asked what the “model” state was for considering public objectives and special needs. Secondly, given Dr. Pickens’ recommendation to the Committee to establish a blended approach incorporating all four factors into a restructuring of formulas for Nevada, he asked if there was a state that was in the process or had already accomplished such a blend.
Dr. Pickens replied that the State of Illinois had the best example of addressing public objectives and Mr. Hawkes could better describe that state’s objectives. Mr. Hawkes stated that the Illinois universities have taken an approach that includes three basic components:
The above components are based on four input factors which consider public objectives. In Illinois, this is accomplished through the Commitment for Partnerships, Opportunities and Excellence, who have identified statewide strategic goals and incorporated program review, institutional analytical studies, and institutional, tuition fee analysis.
Dr. Pickens said the state of Illinois has identified such things as economic development, bachelor’s degree awarding, and other specific state goals/objectives. Kentucky was another example of a state that has established public objectives. That state reorganized their southern-type formula approach to adopting approaches that provide core funding and investments, Incentive Trust Funds. Turning to the information on Kentucky in his report (Exhibit D), Dr. Pickens provided examples of such trust funds:
Dr. Pickens went on to explain that a certain amount of money was appropriated for the trust funds then each campus received funding on a matching basis. In essence, the money was provided with a list of items the state wanted the universities to pursue. Dr. Pickens pointed out that the state of Kentucky uses a formula to generate the core funding in higher education but the vast majority of money was allocated to the institutions that followed statewide priorities.
Chairman Raggio commented that it appeared the State of Kentucky created a competitive situation with the implementation of incentive trust fund appropriations. Also, Chairman Raggio acknowledged Dr. Pickens’ earlier comments about problems that arose in the funding process or formulas under a performance-based approach. He said that most people agree that performance should be reviewed and should be an incentive; however, whether that ultimately was the purpose and use was another story.
Dr. Richardson asked how Dr. Pickens would classify Nevada’s current formula approach. He said he welcomed Dr. Pickens comments on how Nevada compared to other institutions throughout the country. In addition, he asked Dr. Pickens to comment on the autonomy and flexibility compared to the states researched.
Dr. Richardson opined that he has found that many public higher education systems nationwide were in a position of not having much ability to defend their budgets.
Dr. Pickens directed that most of the 30 states researched show that although money was generated in the categories set forth in the formulas, the money was usually distributed by systems and spent on campuses, not in conjunction with the categories. Therefore, the formulas generated income but did not control distribution. However, there were categorical funds that must be spent in the category so designated. Over the past 20 years, there has been a move away from control by state government or systems of expenditure requirements. In other words, after the money was generated, it goes to the campuses and they spend it. So, simply developing a new formula was only half the job—protection of autonomy and the ability to spend it, along with the state’s clear objectives played a role as well. Dr. Pickens stressed that formulas were not designed to be templates to control institutional behavior.
Addressing Dr. Richardson’s question on Nevada’s current standing on formulas, Dr. Pickens related that he did not spend much time researching Nevada since he did not believe that information would be as useful to the Committee; however, it was his belief that Nevada was operating under a cost-based formula with some modifications. In addition, he noted that the Legislature has been very generous with higher education in that the state has funded enrollments beyond what the formula suggested. Further, the State of Nevada has a low student fee structure and student financial aid was not a large needs-based approach. Lastly, the State of Nevada does not have local funding that has allowed other states such as Texas or California to mount a large community college effort. He stated the structure of financing, in conjunction with the formulas should be studied as well. For instance, what should the share of resources be among students, local sources, and the public? What does the state see in terms of adequacy to the institutions with regard to growth? Dr. Pickens said the growth issue was the most important factor for the state to research—not just generic FTE, but the growth of schools, the addition of new institutions, growth in the state, etc.
Acknowledging the chairman’s comments regarding the problems with performance-based funding, Dr. Pickens stressed that there were two dangers to this type of funding:
1) A great deal of paperwork can be produced resulting in very little change. So, he would advise to look at what needs to be changed and establish the paperwork necessary to accomplish those changes only; and
2) Use caution in setting up performances so that the “rich don’t get richer.” For instance, the institutions that for whatever reason have it all together, (ie., graduate students on time, have the right mission, are well-funded, etc.) will move further ahead, but the institutions that took disadvantaged students or poorly prepared students, the institutions that need to be moved ahead won’t go anywhere. All professors know what a pleasure it is to teach a student with a 1400 on his SAT and a 4.0 GPA, but the value added to those students was not nearly as great as taking a diversity of students and making sure they have an opportunity. Not to diminish the need to have performance measures for certain kinds of institutions, but precautions should be taken so as not to overlook the kinds of performance to provide for diversity and assistance for the “bottom half” of the students.
Chairman Raggio asked Dr. Pickens to be more specific regarding his assessment that Nevada had a lack of local funding and how that concept fit within Nevada’s existing higher education funding system. In response, Dr. Pickens indicated that many other states have property tax and other local taxes imposed countywide that benefit post-secondary institutions, typically community colleges.
Chairman Raggio said the state General Fund did not benefit from Ad valorem taxes and for a very limited purpose construction, some of which does flow to the university system. Other than that, there is no local funding from Nevada for higher education funding. Chairman Raggio noted that recently at the Governor’s Steering Committee on the Fundamental Review of Base Budgets, local funding sources have been identified as involving a wealth factor from which the state received no real benefits.
Senator Titus suggested a ballot question or a bond issue in Henderson be researched in order to assist in the funding of the newly proposed facility, Nevada State College at Henderson. She informed the Committee that the State of California does something similar to that and perhaps the State of Nevada should consider a like proposal.
Dr. Harter directed Dr. Pickens back to the issue of flexibility and asked what states considered flexibility of spending by their institutions a factor and how such institutions implemented flexibility into their formulas. In addition, she asked how flexible the State of Nevada was in relationship to other states.
Dr. Pickens replied that from what he knew about Nevada’s system of funding higher education, there was a considerable amount of flexibility and Nevada was certainly not the most controlled state in terms of expenditures. He commented that there were different types of flexibility. For example, some states have less expenditure flexibility, but tightly controlled positions. Whereas, other states have tightly controlled faculty salaries in that the state sets the salaries for faculty. He warned against characterizing an entire system along the lines of flexibility. He concluded that Nevada was more on the flexible side of the spectrum.
In further exploration of flexibility issue, Dr. Harter posed an example for Dr. Pickens’ consideration. She stated that in the past several years there has been more flexibility within the various support categories to move money around. However, the major non-flexible area is that the institutions cannot move any money out of instruction into any of the support categories. Therefore, when an institution was not funded in support, but richly funded in instruction, hiring librarians or computer technicians became a problem because those positions were within the support category. Ultimately, that has an affect on producing good instruction. She asked whether the above example was a typical problem for other institutions in other states.
Dr. Pickens answered that it was typical to restrict movement out of instruction and that resources allotted to instruction needed to stay in that category. He related that approximately 30 years ago in California, a “50 percent law” was passed requiring that 50 percent of the current expense of education of the California Community Colleges must be used for classroom salaries and benefits. Most states have either in practice or policy the notion that the proportion of the budget spent on instruction will not go down. This was especially true in research institutions.
Dr. Harter asked whether there was a sense that “instruction” was more broadly defined than a teacher in the classroom, especially considering technology, distance education, and library resources that align directly with instructional needs.
Dr. Pickens concurred, adding that regardless of what happens in the classroom there should be an educational outcome that should be the measured accountability rather than just spending $3,000 per student for classroom instruction. Some people believe that if educators had enough flexibility they could figure out the vast array of resources available for education and determine how to distribute those funds that best allow students to learn. Taking that knowledge and translating it into budget categories was the challenge.
Dr. Rinello stated that the actual expenditure side of revenues was extremely important and there were a variety of ways that state policies can “handcuff” a campus into spending dollars a particular way when it might better serve the taxpayers to spend the dollars in a different fashion. For instance, a major policy issue that relates to flexibility for institutions was what happens to year-end balances. Another flexibility issue was the imposition of central payroll policies that do not take into account local economy, as well as moving dollars from one program to another. Dr. Rinello experienced a situation in a state where there was a campus that spent some of the physical plant dollars in an area other than physical plant, so a law was created mandating that physical plant dollars remain in the physical plant budget. In other words, little artifacts get created along the way that remain forever. Therefore, in examining funding formulas, the state should look at all the policies that govern how dollars were spent upon arrival on the campus. Dr. Rinello went one step further and opined that maximum flexibility should be given to the campus.
Chairman Raggio inquired into comments made by Dr. Pickens that an ongoing and credible process of evaluation should be developed to examine the formulas. He pointed out that in the State of Nevada the last formula funding study that produced the formulas in existence today was completed in 1986. Those formulas have not been reviewed since that time, although the level of funding has been adjusted during each legislative session. Part of the original language in the funding formula was that there were goals that could be reached as funding became available. However, the Legislature has funded the instruction portion of the formula at 100 percent, and the other formulas were funded at varying levels—approximately 80 percent. Perhaps if all of the funding categories were funded at the same level there would not be a problem. However, that would result in a reduction in the instruction category so that might not be the answer. Chairman Raggio restated his question as to how the ongoing process of reviewing the formulas could operate in the most credible fashion.
Dr. Pickens answered that establishing an ongoing process for review of funding formulas could be accomplished with a two-step process:
Adopt the framework such as Texas – a comprehensive framework that was developed about 25 years ago with major changes occurring every ten years, usually by the actions of a legislative committee or major policy committee. In addition, the State of Texas appoints four to five committees consisting of institutional representatives, members of the Legislature and legislative staff, and some members of the public to annually review the actual generation of revenue and determine if that revenue was adequate for what needed to be accomplished. The committee takes note of gross inequities among institutions and within areas that the state may wish to pursue or were not covered by the formulas. Each of the advisory committees then makes a recommendation to the coordinating board and the Chancellor of that board makes recommendations to the Legislature and the Governor for “small, or midterm” corrections to the formulas for that year.
Two years ago, the annual review team for the State of Texas identified that there was not enough tenured or tenured-track faculty teaching lower division students at the University of Texas. The formula review committee recommended that additional money could be phased in over two years to provide more resources to those institutions that had more tenured or tenured track faculty teaching lower division students. Dr. Pickens emphasized that the changes were accomplished through a formal process that included the roles of the Legislature, the institutions and the public, rather than just being a budget issue.
Chairman Raggio said that in consideration of the data collected by Dr. Pickens for this study, together with the concerns and issues that have been expressed and discussed over a number years, especially regarding equity issues, there was a perception that within a university system somehow “equal means equitable.” In fact, it has been argued that simply taking the number of dollars and dividing that by the number of FTE should bring equity. Acknowledging Dr. Pickens’ credibility, Chairman Raggio asked him to comment on the issue of equity.
Dr. Pickens thanked the Chairman for the compliment and replied that there were three dimensions to appropriations that should be considered in determining equity:
Further, Dr. Pickens commented that there could be institutions with the same program mix and mission, but the size of the institutions are vastly different. In that instance, there would likely be inequity.
Dr. Pickens said a couple of states have calculated how much was appropriated for lower division students in various areas and then applied a “mission factor.” In other words, an attempt was made to create an equal base among the institutions, then a “mission-specific factor” was applied that allowed for an increase of 30 percent for lower division students. Dr. Pickens apologized for not recalling the state(s) that used this method to create equity.
Chairman Raggio asked whether the method described by Dr. Pickens was designed because of the change in faculty/student ratio. Dr. Pickens answered that it was designed to recognize that research faculty were typically paid more and needed more release time for research.
Mr. Snyder asked whether Dr. Pickens noted any particular challenges for Nevada in creating equity. In response, Dr. Pickens suggested that the state should agree on an amount that represented the base. Then, a formula should be designed to move forward in terms of enrollment changes because that will quickly skew the allocation of expenditures and formulas over five years. Nothing skewed figures more than growth. Dr. Pickens opined that Nevada needed more of the “Texas approach” as opposed to a benchmark or peer-based approach.
Regarding the non-instructional portions of the budget, Dr. Pickens suggested that an evaluation of adequacy be performed. The desire was not to “roll up” dollars per FTE student on instruction, student support, etc., so securing that the base was correct in instruction then looking at other areas in terms of adequacy and funding of those categories with special appropriations for areas that were completely misaligned. The non-instructional portion could be accomplished in more of a benchmark approach.
Mr. Snyder acknowledged Dr. Pickens’ comments indicated that equity issues cannot be resolved over night, but a long-term goal should be set forth allowing for a transition time.
Dr. Crowley said he recognized comments made by the Chairman, Dr. Harter and Dr. Pickens that the answer to some of the equity concerns may be in the definition of “Instruction” and what is not incorporated into instruction but rather into the support categories.
Dr. Crowley commented that there was one state demonstrated in Dr. Pickens’ presentation, which showed that the core funding was quite small and the additional funding was quite large. He asked whether there was an example of a reverse case; whereby the core funding was significant and performance funding was based on a flat sum of money, or a small percentage of the overall budget.
Dr. Pickens replied that the state of Tennessee was perhaps the best example of a state with significant core funding. Dr. Rinella elaborated that Tennessee had a formula-generated needs approach based upon peer groups, benchmarks and average costs. Then, depending upon how successful the institution was in four performance measures, an additional 5.4 percent could be earned beyond the formula-generated need portion.
Dr. Pickens pointed out that the State of Louisiana had three types of funding beyond the core funding that used benchmarks:
· Quality Campus Improvement
· State Priorities
· Performance Incentive Initiatives
Dr. Pickens indicated that the section on Louisiana contained in his report showed that institutions play a substantial role in defining campus improvement priorities and state priorities. That was a good example of having the core funding based on measures of adequacy with steps that add/subtract money on the basis of the other factors.
Senator Titus asked who evaluated the performance when formula funding is based on performance measures. In response, Dr. Pickens indicated there were two approaches to performance evaluation: 1) Objective Approach: The State of Colorado has identified ten measures with 1,000 points total. At the end of the year, the points are totaled. Colorado and other states (South Carolina) using this format rely solely on objective measures such as: placement, questionnaires sent to alumni and employers, etc. 2) Subjective Approach: The California Community College System has just implemented this value-added approach whereby a base is established and then progress by the institution is evaluated from that beginning point.
Continuing, Dr. Pickens answered that performance evaluations were often completed by the system office or the Legislature. In California, the community colleges received funds if the coordinating board, the Department of Finance, the Governor’s office and the legislative analysts agree.
Dr. Rinella added that in the State of Tennessee, tests were administered on campuses and then submitted to the Tennessee Higher Education Commission who then assessed the campus and set the final grade.
Chairman Raggio inquired that if five percent was set aside for performance, once the money was allocated, would that money go into the base for that institution or was it a one-time funding? Dr. Pickens replied that performance funds were rarely included in the base. Further, if an institution did not meet the performance, the funding was taken away. Chairman Raggio commented that he would like to see what state was able to take money away from the base.
Dr. Pickens said, on paper, it was possible to lose money in South Carolina. Also, in the State of Tennessee performance funding was an add-on and did not go into the base so if performance measures were not met, it was not removed from the base. In Colorado, at least 75 percent of any funds above the general inflation factor were distributed according to the performance budgeting system. There were ten measures ranging from faculty instructional productivity to graduation rates. That would be a one-time amount. In other words, that 75 percent of whatever’s above there would go out as a one-time this year and then that would be taken away in terms of calculating your budget for the next year‘s base.
Chairman Raggio indicated it was an impression that Colorado began their base on a single appropriation for FTE and, as has been discussed, that was not equitable. Perhaps that was why Colorado was in the midst of a study of their current funding system.
Dr. Richardson, following the discussion on the definition of instruction, stated that faculty in the system have been wary of invading instructional budgets; however, he acknowledged the problems that result in rapidly growing institutions. He asked Dr. Pickens to provide the Committee with a review of definitions of instruction used by other states so the Committee could compare that information with what Nevada was doing and determine if more flexibility or adjustment was needed. Dr. Richardson added that perhaps that information was contained in Dr. Pickens’ report, but unfortunately, he has not had the opportunity to absorb the entire, well-prepared documents.
Secondly, Dr. Richardson noted that the Working Group would be providing the Committee with updates and he hoped Dr. Pickens could stay to hear those reports. He advised that the Working Group began with a list of items they wished to accomplish, all the while knowing that there was no more money. He added that the list of suggested changes was long but he would welcome Dr. Pickens’ review of those recommendations in conjunction with his study of other formula states.
Dr. Pickens directed the Committee to page 21 of the section on California in his report (Exhibit D), which showed that the way students were counted was different than the instructional mode where there is non-credit. That was not necessarily a definitional difference but it did make a difference on how students were counted as to the reimbursement rate. The State of California was a good example of a state that divides the instructional program and defines it differently regarding contact hours as opposed to credit hours. Dr. Pickens indicated he would provide the Committee with the different definitions of instruction that have been collected.
Dr. Rinella added that the definition of instruction was a national problem because the current budget categorizations: Instruction, Academic Support, Institutional Support, etc., were generated prior to the latest developments in instructional technology and learning technology. So, the computer center is placed in institutional support and the library and other information technology that supports the classroom experience are in academic support. All states are required to report by using those categories and a look at the issue on a national level would be a good exercise for all states.
Chairman Raggio thanked the consultants for their presentation and all the work and information they provided to the Committee—acknowledging that Dr. Pickens and his contractors went beyond the scope of the contract in providing the matrix and additional information and the Committee truly appreciated those extra efforts.
Before turning to the next agenda item, Chairman Raggio stated he would accept a motion to accept the report by Dr. Pickens.
DR. RICHARDSON MOVED TO APPROVE THE REPORT BY
MR. SNYDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.
Chairman Raggio asserted that the information provided by Dr. Pickens was not only helpful to the Committee but would also be helpful to the UCCSN faculty and staff and others in the future who deal with the funding formulas.
D. Consultant Deliverable Report – Dr. Larry Leslie
Dr. Leslie expressed gratitude to the universities and colleges in the state who provided information to him and took time out of their busy schedules to supply him with the information he needed to complete his report. In addition, he extended his thanks to Joi Davis and Brian Burke of the Legislative Counsel Bureau. He has worked in many states and generally people were very helpful but Joi Davis and Brian Burke were truly extraordinary in how rapidly they have responded to his requests. Dr. Leslie said he was impressed by how Brian Burke was able to maintain his neutrality at all times.
Dr. Leslie began a presentation using overhead displays (Exhibit G). He recalled for the Committee that at the meeting on March 2, 2000, the Committee agreed to waive the site visits and instead use other means to obtain the updated information on the peer institutions. In addition, the information he presented initially on peer institutions was using Fiscal Year 1998 data so the major purpose was to update the information using Fiscal Year 2000 data.
Dr. Leslie related that in updating the peer institution information, the following questions were posed:
1. What new programs have been created in the Nevada institutions and the peer institutions since the institutions submitted their IPEDS 1998 reports? And, what were the enrollments in these new programs?
2. What have been the enrollment changes since Fiscal Year 1998?
Dr. Leslie informed the Committee that he was able to obtain the above-requested information for FY 1999 and FY 2000.
Additional requests came from the community colleges so Dr. Leslie attempted to obtain the following information for the community colleges, even though it was not specifically set forth in the contract:
1. Approximately what is the size of the service area in square miles?
There are financial issues relating to the size of the service areas. Dr. Leslie said there were few institutions with service areas comparable in size to Nevada’s community colleges, and those institutions were not considered decent peers for other reasons.
2. How many primary teaching sites does the institution maintain?
From the institution’s perspective, more teaching sites, mean more costs to run the overall institutional programs. Typically, institutions define primary teaching sites as: “A campus or a building owned by the institution.”
3. How many secondary teaching sites does your institution maintain?
Many of the institutions have secondary teaching sites whereby a class was offered in a high school or some other community building that was not owned by the institution.
4. Does your institution offer bachelor degrees jointly with another institution or separately?
Dr. Leslie said he thought Great Basin College in Elko was the only community college in the country that offered a bachelor’s degree independent of a university.
5. Does your institution offer distance learning courses/programs?
Dr. Leslie said that every community college in Nevada and its peers offered distance learning, although the level of involvement may differ substantially.
Continuing, Dr. Leslie said he received approximately an 80 percent response to the above questions from the peer institutions. However, there were some problems in obtaining the data on enrollments for new programs. The institutions did not have that information in their electronic systems. Generally, the institutions were very cooperative but there were some institutions that had to be contacted a dozen times or more. In addition, many of the institutions have requested that information be shared with them upon completion because some of the institutions were going through the same exercise as Nevada in one form or another.
Dr. Leslie advised the Committee that he became aware of one problem in the process and that involved the area of community college enrollments. There are a variety of ways to count enrollments and define FTE. There were three or four institutions that required a great deal of effort to reconcile what was in the IPEDS reports and one institution was unable to be reconciled—a peer for CCSN.
Turning to the charts for the individual institutions, Dr. Leslie began his discussion with the University of Nevada, Las Vegas (UNLV). He pointed out that beginning on page 78 of the Committee meeting packet (Exhibit C), the supplemental charts were identified as S1-S6.
Dr. Leslie stated that the peer institutions that were compared to UNLV were more or less equal and all the peers were active in creating new programs. UNLV had a greater FTE enrollment growth than its peers, on average. There was more enrollment and stability among the peers for other institutions in the state than was evidenced with the UNLV peers.
Dr. Leslie concluded that the proposed peers for UNLV should be retained. However, Nevada is a unique state and considering the growth factor, especially in Las Vegas, what looks like a good solution in one year may not be a good solution in another year. Because of that dynamic growth, he recommended that changes occurring in the state be tracked. That did not mean that a new peer group was needed each year, but knowledge of what was going on with the peers should be updated.
Dr. Leslie informed the Committee that UNR has been substantially more active than its peers in creating new programs. The enrollment differences between UNR and its peers has been steady. However, Dr. Leslie expressed concern for the instability of some of the UNR peers and recommended that the peers be tracked frequently. He concluded that the UNR peers should be retained but should be closely viewed, particularly in the area of enrollments.
Dr. Leslie stated that GBC has developed somewhat fewer new programs that its peers, on average. The enrollment picture, however, was relatively unchanged. He reiterated that there were no peers that matched the service area of GBC and that created extreme differences. In addition, GBC has many more teaching sites than does its peers. Many of the peers for GBC offer baccalaurette degree as does GBC, but in all cases those institutions offer the BA degree through a university. He concluded that there should be a substitution of Rogue Community College for Treasure Valley Community College because the enrollments at Treasure Valley have declined. Although a decline in enrollment, alone, might not be sufficient to change the recommendation, in speaking with experts throughout the country, there were some real problems at Treasure Valley Community College and for that reason they would not be a comparable peer for GBC.
Dr. Leslie advised the Committee that he just received new data indicating that CCSN has added new programs and that information makes CCSN more compatible with its peers on average. CCSN has experienced much more enrollment growth than its peers. In fact, the 1998 data shows CCSN enrollments were a few hundred students less than the average of its peers. Now, however, the FTE enrollment at CCSN is several thousand students higher than its peers. North Harris Community College in Texas could not explain the discrepancies in their IPEDS on enrollment figures so Dr. Leslie would recommend that North Harris be substituted with Tarrant County Community College in Texas.
Truckee Meadows Community College (TMCC) – Table S5
Dr. Leslie said that TMCC had a greater number of new programs than its peers. FTE enrollments appeared relatively stable on average. TMCC has more teaching sites than does its peers. In conclusion, Dr. Leslie recommended that the proposed peers should be retained for TMCC.
Western Nevada Community College (WNCC) – Table S6
Dr. Leslie indicated that the pattern of new programs was similar to the proposed peers and the FTE and enrollment changes were also similar to the peers. Although there was a disparity in number of teaching sites, it was recommended that the proposed peers for WNCC remain.
Dr. Leslie reminded the Committee that the construction of peers was not an exact science. Rather, what was placed first, second and third in the list of variables for screening play the largest role. According to his contract, the Committee asked him to look first at programs (Carnegie classifications & cost of programs) and second, enrollment figures. For the community colleges in particular it was important to screen by similarity of states because there were great differences in how community colleges were funded.
Dr. Leslie summarized that when viewing the peer analysis information he provided, he would remind the Committee to ask: “Peers for what reasons?” There were a number of financial questions within that generic topic of financing of higher education, which bring cause to look at different aspects of the financial data. For example, if someone wanted to study the issue of state support for higher education institutions, all the categories of financial support must be reviewed in relationship to the question at hand, be it equity or another factor. In other words, the question drives the data that is to be reviewed.
Chairman Raggio stated that it was his understanding that Dr. Leslie’s final report was consistent with his previous report, with the exception of the substitution of two alternate peers as primary peers: Table S3, substituting Rogue Community College for Treasure Valley Community College, and on Table S4, substituting Tarrant Community College in Texas in place of North Harris Community College.
Dr. Leslie acknowledged that there was one other change that was reflected in the minutes from the last meeting, but that change was included in the supplemental tables provided at this meeting.
Dr. Crowley directed his inquiry to Dr. Leslie’s presentation at the March 2, 2000, committee meeting, regarding the classification of UNR with respect to the new Carnegie categories. Dr. Leslie’s analysis, was that based on the Carnegie Classifications 2000, UNR would be placed in the Doctoral Research II category. Dr. Crowley said that surprised him because he had looked at the criteria and determined UNR was in the Doctoral Research I category. Subsequently, information on that question was provided to Dr. Leslie, that 150 or more doctorates on an average over a three year period, across 15 disciplines, the average number of doctorates for UNR over the 3-year period indicated was 64 and the average number of CIP codes according to the 4-digit requirement was 23. Therefore, it was his understanding that based on the current understanding of Carnegie, UNR would be categorized as a Doctoral Research I institution. Dr. Crowley indicated that if that were true, it should be reflected as a matter of record.
Dr. Leslie answered that Dr. Crowley’s conclusion was correct. Dr. Leslie reminded the Committee that he had used a conservative definition of the CIP code by using the 2-digit CIP codes and that resulted in much smaller numbers of programs within which to count the degrees.
Dr. Leslie informed the Committee that it appeared that the Carnegie Commission Foundation was planning to use the 4-digit definition. In that light, UNR would clearly be a Doctoral Research I institution.
Dr. Richardson asked whether the institutions agreed to the peer substitutions recommended by Dr. Leslie. Dr. Richardson acknowledged that representatives from those institutions were in accordance with those changes.
Chairman Raggio asked whether there was any public testimony relating to Dr. Leslie’s report. It appeared there was a considerable amount of discussion on the issue of peer groups, and there may still be some disagreement on the acceptance of the peers as outlined by Dr. Leslie.
Chairman Raggio told Dr. Leslie that even though the Committee has had much discussion about his peer group analysis, he certainly appreciated Dr. Leslie’s efforts to revisit the issue more than once. The concern of the Committee has always been to ensure that the information received is valid, objective and feasible.
Continuing, Chairman Raggio reminded the Committee that one of the first orders of business for the Committee was to identify peer institutions and that became a part of the contract that Dr. Leslie has fulfilled. In consideration of the concerns that have been expressed, it should be made clear that in accepting Dr. Leslie’s report, the Committee was not bound by the report, nor was the next Legislature. Therefore, an appropriate motion would be that the Committee accept Dr. Leslie’s report with thanks and appreciation for the extensive amount of work he performed and that the report be accepted with the understanding that the institutions in the system can make use of the information to the extent they feel necessary in developing budget requests and the Committee can utilize the information wherever determined appropriate. Chairman Raggio indicated that the Committee should be able to accept the report with that basic understanding.
Mr. Snyder asked for further discussion on the matter of accepting Dr. Leslie’s report. Chairman Raggio reiterated that he thought an appropriate motion would be that the Committee accept the report of Dr. Leslie with thanks for doing a credible job and that the UCCSN has the report available to them for whatever they may wish to use it for in submitting their budget requests and that the Committee can use the information as it determines appropriate. In accepting the report, the Committee is not saying that the peers listed are the only peer institutions, if any, that will be studied.
Chairman Raggio stated that the Committee understood that accepting Dr. Leslie’s report did not mean those were the only peer institutions that would be considered. He was trying to make it palatable so that the report could be accepted and the information used but nobody was bound by the information.
DR. RICHARDSON MOVED TO ACCEPT DR. LESLIE’S REPORT
WITH THE UNDERSTANDING THAT THE UCCSN INSTITUTIONS CAN
MAKE USE OF THE INFORMATION PRESENTED IN DEVELOPING
THEIR BUDGET REQUESTS AND THAT THE INTERIM COMMITTEE
CAN UTILIZE THE REPORT WHERE APPROPRIATE IN ITS
REGENT DERBY SECONDED THE MOTION.
Senator Titus suggested the Committee use the same motion that was used to accept Dr. Pickens’ report. That was a simple motion that accepted the report and thanked the consultant and paid the contract. That motion did not contain any supplemental information about using the report for budgeting or any other purpose so why not make that same motion for Dr. Leslie’s report?
Chairman Raggio indicated that there was already a motion before the Committee. He asked what the purpose was in changing the motion at this time. Senator Titus replied that she would not be voting for the motion as moved by Dr. Richardson. She said she did not believe that it was necessary to make a motion that described how the report might be used. Senator Titus said it was proper to thank Dr. Leslie for his report and he should be paid. In addition, the report was fine and was informational, but to make a point about the use of Dr. Leslie’s report and not Dr. Pickens’ report was giving Dr. Leslie’s report more credence.
Chairman Raggio asked whether he had misread the minutes from the last meeting that indicated there was much concern expressed regarding the peer institutions and being bound by the peers recommended by Dr. Leslie. He was simply trying to accommodate those concerns in the motion.
Assemblyman Beers said he was one of the people at the last meeting that did not want to accept the peer report, but that position was not in any way a criticism of Dr. Leslie’s work. He said the concern at the last meeting was attempting to locate a peer for UNLV since that institution was growing so fast, finding a compatible peer was difficult. Mr. Beers said Dr. Leslie’s report represented a good job of a difficult task and he would support making sure the consultant was paid.
Regent Seastrand asked whether the maker of the motion and the person seconding the motion would accept a friendly amendment that the consultant would be paid but that the information did not have to be used in any other way other than to accept the report and pay the consultant.
Chairman Raggio again restated that the motion was to accept the report and indicate that it was available for use by the Committee but that the Committee was not bound by the report and the institutions can use it if the like. He opined that the state would be “sticking its head in the sand” if they were to pay money to the consultant and not pay attention to the information provided.
Chairman Raggio called for the question and a vote on the motion was taken.
THE MOTION CARRIED. SENATOR TITUS VOTED NO.
Chairman Raggio thanked Dr. Leslie. In response, Dr. Leslie said he realized the contentiousness on the exercise of establishing peers; however, this Committee was one of the least contentious groups he has worked with on the issue of peer analysis.
Chairman Raggio announced a recess at 12:15 p.m., and the Committee reconvened at 1:20 p.m.
Dr. Tom Anderes, Interim Chancellor, University and Community College System of Nevada (UCCSN) said he would highlight the formula recommendations based on the handout provided (Exhibit H) Comparison of Current Formulas to UCCSN Recommendations. Dr. Anderes apologized that the handout did not contain numbers that would be needed to make sense of the changes recommended from the 1986 formula. The UCCSN has just recently received the numbers necessary to make an appropriate comparison. However, the numbers may or may not be correct and a further review was necessary. If the numbers are accurate, however, they would be clearly too high. Dr. Anderes said his office would need another week to review the accuracy of the numbers and, more importantly, review the assumptions that were discussed by the Committee to assure that the amount of money that was being recommended was not as much of an increase as was determined by the first set of numbers.
Chairman Raggio indicated he was uncertain how valuable the information provided in the recommendations would be without the numbers. Therefore, if Dr. Anderes could provide an estimate when he went through the proposed changes that would be helpful to the Committee. Chairman Raggio reminded the Committee that when the study of higher education funding first began, it was recognized that within the budgeting process in the state, the UCCSN received a little under 20 percent. Although the recommendations from the Working Group were valuable, two perspectives must be developed: One – How do the recommendations fit into 20 percent of the General Fund or whatever other revenues were available to the system? and Two – How do the recommendations get placed into the formulas and what recommendations do not get included? Chairman Raggio concluded that upon initial review of the recommendations provided by the Working Group, many of the items appear to be “add-ons.” He assumed that the Working Group was mindful of the amount of funding presently available while still considering any changes in funding that could occur.
Chairman Raggio stated he asked staff to prepare the Comparison of Current Formulas to UCCSN Recommendations (Exhibit H) and suggested the Committee follow through that document as Dr. Anderes explained different aspects that were being recommended by the Working Group.
Dr. Anderes said the comparison document (Exhibit H) was an excellent tool to clearly identify all of the changes that were being suggested. He indicated he would be highlighting particular areas that were most significant in terms of changes from the 1986 formula.
Chairman Raggio asked the Committee to reserve questions until Dr. Anderes has completed his report.
Dr. Anderes pointed out that there were four to five areas where the formulas were either reduced or eliminated. He assured the Committee that there was some activity in providing “offsets” to areas of importance. For example, in the Library Acquisition formula, one of the primary factors was reduced within that formula which will likely drive a reduction of hundreds of thousands of dollars reduction in the existing formula. Similarly, within the Graduate Assistants category, it is recommended to change the existing ratio of 1:5 to 1:7 for Master’s students. That change was expected to reduce that formula by hundreds of thousands of dollars.
Dr. Anderes informed the Committee that both the Library Acquisitions formula and the Graduate Assistants formula were large formulas that were presently greatly underfunded (40-50 percent) so the recommendation was an aggressive approach to attempt to reduce those formulas.
Continuing, Dr. Anderes indicated that it was being recommended that the Equipment and Equipment Maintenance formulas both be eliminated completely. Projections for the next biennium showed $20 million would be unfunded for those two categories. Therefore, a $20 million unfunded resource has been eliminated that would have been difficult to gain. However, some of the equipment money will be returned as other functions are reviewed.
Dr. Anderes said that no changes would be made to the Grants-in-Aid formula. As to the Research formula, Dr. Anderes indicated that the Working Group decided that instead of defining a new formula, the suggestion has been made to allow the institutions to retain 100 percent of their indirect costs recovery with the condition that those funds be driven back into Research and the stimulation of Research programs. Basically, dollars derived from research will be brought back into research.
Turning to the handout (Exhibit H), Dr. Anderes directed the Committee to the first column “Instruction Student Credit Hour FTE enrollment conversion” and stated that the 1986 formula reflects student credit hours at 30 for undergraduate and 16 student credit hours for graduate students. One FTE is 16 credit hours in graduate coursework. The suggested changes were primarily in the area of the graduate work. For instance, every graduate student in the 1986 formula was at 16:1; whereas the recommendations would break that out to masters at a 24:1 basis and doctoral at 18:1. Dr. Anderes said that was a significant change and would result in driving fewer FTE.
Dr. Anderes said under the Student-to-Faculty ratios (page 179, Exhibit C) the recommendation was to move to a fairly simple approach for graduate and undergraduate and break that into divisions that represented a more accurate picture in terms of costs for lower division (LD), upper division (UD), masters (M) doctoral (D). Basically, the original two categories would be divided into four categories with the concept being that it was easier to attach costs to a specific program level.
Similarly, with the community colleges, the Working Group was looking at a structure divided between high cost, medium costs and low costs. In these new structures for universities and community colleges, after the cost structures were divided the student-faculty ratios were defined. Although student-faculty ratios have already been defined to some extent, the recommendation was now to break those ratios into course levels and fine-tune it even more on the basis of program costs. Dr. Anderes acknowledged that some people may think that a restructure of the student-faculty ratios may generate a higher cost but that was not necessarily true and they would be examining that further.
Chairman Raggio indicated that staff had not had the opportunity to develop costs for the proposed recommendations. However, based on student-faculty ratios established pursuant to the recommendations, it appeared that in excess 66 new faculty positions at UNR would be required. He suggested that the Working Group re-examine the student-faculty ratios and bring some cost estimates to the Committee for review.
Dr. Anderes said that was absolutely correct because the change to student-faculty ratios that would be “add-on” items. Referring to Dr. Pickens’ presentation, Dr. Anderes commented on how instruction has changed in the past ten years in terms of program development, technology and the support services that link directly to instruction. As costs were developed, add-ons will become more evident. The add-ons relate to what the institutions were already doing but could not do adequately because the instruction formulas provided funding that was focused on faculty.
Turning to the next column on the comparison chart (Exhibit H), Dr. Anderes said in relationship to new instruction faculty positions would be brought in at the Associate Professor’s midpoint salary of $60,388.
As to Instructional Equipment, Dr. Anderes said that when the Working Group discussed eliminating the Equipment Replacement Schedule which drives a large amount of money, they needed to be sure that Instruction, Student Services, and Academic Support retained funding for equipment. It has been suggested that each function receive an amount of funding based on a per-student or per-faculty basis. Also, workstation replacement costs have been included. Dr. Anderes explained that the proposed change would define equipment needs by functions. For instance, in the past UCCSN would request $40 million in the budget for equipment and $12 million for technology equipment. The new proposal would define the request more directly as related to positions and faculty, by function.
Dr. Anderes informed the Committee that as to Instructional Classified Position, the ratio of 5:1 would remain the same.
Dr. Anderes related that there have been discussions in the past several years on implementing a process to enhance the faculty salaries at UNLV to bring them to an appropriate level. Determining the “appropriate” level was defined by the IGT equity study that was performed in April 1999 and partly through discussions at the Interim Finance Committee. The recommendation provided that the equity issue as to faculty salaries would be resolved within the next two biennia.
Larry Eardley, UCCSN, interjected that the intent of the Working Group was to equalize salaries between the two universities over three biennia, but not more than five. After each biennium, a review of the difference in faculty salaries would be noted then they would apply for that amount during the next biennium. Dr. Anderes acknowledged that a mechanism would have to be identified in this process that would clearly identify which positions received the equity adjustments to make sure there was no “game-playing” with the use of those dollars.
Regarding instructional operating/wages, the UCCSN presently received funding on a per-faculty basis. The proposal would be to have a similar amount for faculty and classified employees on a per FTE basis. Continuing, Dr. Anderes said there were many ways that funds were consumed within instruction, but there needed to be a mechanism that was consistent.
Dr. Anderes said that it was recommended that the full-time/part-time ratios at community colleges be changed from a 60:40 ratio to a 65:35 ratio. Elaborating, Dr. Anderes pointed out that the 1986 funding study recommended a 70:30 ratio but there was significant costs in making those changes so a middle ground was sought. It was important to place the community college at a level that was attaining a higher number of full-time faculty.
Looking at Teaching Assistants, Dr. Anderes advised that currently there were no teaching assistants at the community colleges so it was been proposed that funding be added to retain teaching assistants at the community colleges.
Dr. Anderes concluded his comments regarding the recommended changes to the Instruction funding formula. He acknowledged that this category had more “add-ons” than any of the other categories; yet there were off-sets such as the elimination of equipment and equipment maintenance.
Turning to Academic Support categories, Dr. Anderes said the Working Group was interested in obtaining a closer relationship between the professional, classified staffing and the number of faculty. Presently, that relationship does not exist; two professional and one classified positions were provided for Vice Presidents, and one professional and one classified position was provided for each college or school. However, if there was 200 faculty or 1000 faculty, there would be a major difference on what was needed for staffing support. Therefore, it would be more sensible to develop an index that aligned the number of classified positions and academic support. In addition, it was recommended that the existing 6.5 percent operating cost within Academic Support be increased to 7.5 percent which would be applied to academic advisement and technology. Dr. Anderes pointed out that technology was interspersed throughout all the formulas in order to place technology into support positions. In other words, a specific technology formula will not be devised; rather technology will be placed within various functional areas.
Dr. Anderes directed the Committee to Academic Support for Community Colleges. He stated that the Working Group was recommending that the formulas in this category be altered from CCSN, TMCC and WNCC at 20 percent and GBC at 25 percent, to CCSN and TMCC at 30 percent, and GBC and WNCC at 35 percent. He said the differentials were shown for economies of scale so the larger institutions would receive a relatively smaller percentage. Also, as GBC and WNCC grew and obtained a particular level of FTE’s, those percentages would then equate to CCSN and TMCC.
On a national level, Library Support falls under the umbrella of academic support. The most significant change in this area was to have library operating/wages at $5,500 per FTE at the universities and $4,000 at Nevada State College at Henderson, and workstation replacements of $1,000 per FTE (locating the workstations by function).
Dr. Anderes commented that Library Acquisitions was an interesting category. He informed the Committee that there was a national formula that was used quite extensively, the Clapp-Jordan formula, which has been in existence for approximately 20 years and the UCCSN has been using that formula. It was recommended that the acquisition rate be reduced from 5 percent to 3.5 percent. Dr. Anderes estimated that this reduction would drive hundreds of thousands of dollars less on the acquisition rate. Mr. Eardley interjected that he did not know the exact amount but it would be a significant decrease. He added that the Working Group has discussed revisiting the actual formula drivers that developed the volumes. Further, Mr. Eardley emphasized that Library Acquisitions generated a lot of money and in consideration that this would be accomplished over a short period of time, the Working Group thought that reducing the rate would greatly help. However, upon revisiting the subject, it was noted that the formula generated a number of volumes for the institutions and those volumes would still be generated but the acquisition rate would be reduced yet still meet the need of the institutions.
Dr. Anderes said the community colleges would like to move from an elevated standard in Library Acquisitions with Learning Resource Center standards that have been used since 1986 to a more focused and immediate standard related to accreditation standards and the size of collections that are tied to program mix and institutional size.
Dr. Anderes advised that there were several items of interest in the recommendations for Student Services. Student Services currently exceeded the formulas on virtually all campuses in terms of expenditures. This has been an area that for the past two to three biennia since the standards that were developed in 1986, there have been many changed circumstances and requirements. The Working Group determined that the driving number needed to be changed from 300 to 200 for the universities if enrollment was under 10,000. If enrollment exceeded 10,000 then the driver would go from 400 to 300.
Dr. Anderes said another major change to the Student Services formula was looking at a cost per staff member basis in an attempt to define more closely the operating cost with the positions. One change would be to add an ADA allowance of $1,000 per disabled student for the universities. Dr. Anderes explained that there was an overwhelming demand for additional funds for what amounted to be relatively few students. The institutions are mandated provide services to disabled students. He stressed that since 1986, the requirements for special need students has become more firm and more heavily utilized because under the ADA guidelines, additional students have been defined and have become eligible for services. In addition, Dr. Anderes pointed out that the Student Services formula would also have the $1,000 per FTE workstation replacement.
The formula for Institutional Support was another area where the expenditures exceeded the formulas in at least five of the system institutions. Again, Dr. Anderes pointed out that since the 1986 formulas were designed, there have been a number of requirements over the past ten years, not the least of which was technology, but also hazardous waste management, safety, security and police, all fall under the Institutional Support function. Those areas have grown tremendously since 1986. Consequently, the drivers need to be changed by adjusting the thresholds. Dr. Anderes stated the recommendation was to change the threshold to $25 million and continue with 15 percent for most of the institutions (except GBC and WNCC).
Addressing Operations of Maintenance and Plant, Dr. Anderes said the Working Group would like to tie this function more to the use of space. In the past, positions were figured according to the amount of gross square footage. It was now recommended that a more specific review of the available space be made because some space does not demand as much attention. For instance, a classroom lab, a hallway, an office, would be classified or weighted as below 1.0 FTE. High intensity of use equated to a higher weight or classification. Dr. Anderes commented that although the new proposal was slightly more complex, it should prove to be more closely related to the service and drive a more accurate number. He stated that the grounds formula that was presently used would not be changing. However, there would be a change for the universities in terms of O&M operating funding to go along with the positions. Whereby, the average cost per square foot would be applied against the gross square footage that was maintained, equating to the national standard of 90 cents. Depending on the age of the building, however, that amount could be higher. Dr. Anderes related that the $1,000 per workstation replacement was also suggested in the O&M Plant formula function, and DRI would be included in these recommendations as well.
Generally, Dr. Anderes said when addressing the Equipment for New Positions category, the formula would reflect one-time funding for equipment startup for all new positions.
In conclusion, Dr. Anderes said the final category reviewed by the Working Group was Performance Funding. He said the issue of performance-based funding was discussed at length during Dr. Pickens’ presentation and the issue has been raised nationally. Dr. Anderes stated that the Working Group was looking at percentages used by the states that used performance-based measures. Two percent of the state’s appropriation on an annual basis would be approximately $8 million so that may be too high. The issue of performance measures was under consideration by the Board of Regents whereby certain indicators were identified that could be cooperatively driven between the Legislature, higher education, and the Governor in order to secure specific outcomes and improvement with a set amount of funds such at $1-2 million in order to maintain an “incentive pool” and obtain important goals and objectives of the state.
Dr. Anderes advised the Committee that he would be revising the Comparison of Current Formulas to UCCSN Recommendations (Exhibit H) document in time for the next Committee meeting.
In relation to the category for Instruction-New Positions, Chairman Raggio said that one of his major concerns has been termed “salary equity.” He noted that the recommendation was that starting salaries would be set pursuant to specific ranks and steps.
In response, Dr. Anderes indicated that each new position would be at the same level. For instance, all Associate Professors hired at the midpoint would earn $60,388.
Chairman Raggio asked whether the proposal was that all Associate Professors at midpoint would start at $60,388 with the fringe of $10,870 for a total compensation of $71,258 for a new position. Based on the information he requested from staff, it was his understanding that during the last legislative session there was a request made regarding starting salaries and it was determined that between the universities those starting salaries were different. In other words, UNR was $67,710 (base) and UNLV was $62,790 (base). The Budget Division and the Legislature have traditionally taken this request and applied at “90 percent” factor. So, in applying the 90 percent factor, the average salary was approximately $58,000. He asked that the Working Group consider those variables when they return with amendments to these recommendations, keeping in mind that the 20 percent of funding that was available was actually more liken to 19.5 percent.
Dr. Anderes commented that the recommendation was a lower salary than the two positions mentioned by Chairman Raggio. In order to clarify, Dr. Anderes asked whether Chairman Raggio wanted them to take 90 percent of the salary suggested. Chairman Raggio replied that he was merely alerting the UCCSN on the way the budget has been constructed in the past—that the UCCSN has traditionally received 90 percent of the salary requested.
Larry Eardley, Fiscal Officer, UCCSN, said he would not like to use a figure that was 90 percent of the request and then have the Legislature take another 90 percent from there.
Chairman Raggio said he was simply trying to be realistic and mindful of the fact that whatever was finally recommended by the Working Group for changes to the funding formula had to fit within 19.5 percent of the General Fund. Further, if everything was going to be put into the recommendations then the Legislature would need to know what percentage the UCCSN was requesting funding for all the functions. Unfortunately, the Committee did not print money and they simply needed to figure out the most equitable and efficient way to allocate the funding for the UCCSN. Perhaps the items that do not “fit” within what has been suggested could be placed in a “wish list” so that if the state suddenly came into additional revenues, those items could be considered based on priority with the long list of other items the state must consider. Chairman Raggio concluded that the recommendations presented by the UCCSN represented additional dollars and cost estimates that came back to the Committee should take into consideration all of the above factors.
Turning to the salary equity gap, Chairman Raggio indicated he was uncertain if the proposal was fully understood on how the UCCSN planned on “closing the gap” and addressing vacant positions.
Mr. Eardley commented that the intent of the Working Group was that if the universities’ vacancy rate was approximately ten percent, or 90 positions, those 90 positions would be what they would seek funding to equalize salaries between the two institutions. Whatever the current difference was (approximately $5,200) the institutions could come to the next Legislature and request $5,200 per those 90 positions, that would be a pool of money that could be used in the budget for no other purpose other than the salary equity gap.
After further discussion, Mr. Eardley stated that the money would be used to address the inequity in the salaries. He estimated that after three biennia, based on that funding, the institution could fill their vacant positions and they could hire a person to fill a vacant position at a higher rate than was previously paid by using the pool of money set aside for that purpose.
Chairman Raggio said that every position would not be paid the same salary because there were variables, so this proposal dealt with just the base salary. Mr. Eardley suggested that more specific information on the equitable salary issue might be better addressed by one of the university personnel. However, for budget purposes, there would be a certain amount of positions and salaries within the budget, and if an institution hired new people at a higher amount that would be reflected in their budget. Over time, the salary gap between the universities, on the average, would get closer to each other.
Chairman Raggio said the salary gap has been going on for a very long time so once equity was obtained, how can it be maintained? He asserted that the Legislature did not want to micromanage the universities’ budgets nor did it wish to micromanage the operations of the institutions. However, at one point in time an equalization of salaries occurred but within two years they were no longer equal so a structure to maintain equity was imperative.
In response, Dr. Anderes suggested that once it was determined how much was necessary to equalize the salaries, each university would then need to establish the same salary administration policies. Chairman Raggio asked why the salaries should be stabilized if consistent salary administration policies were not already in place for both universities. Dr. Anderes replied that the universities have been moving toward consistent policies.
Chairman Raggio reminded that there was discussion about instructional faculty and that the information from the State of Connecticut along with the UCCSN’s computation would be important. Since it would appear that as much as 100 new positions might be required, he asked that the UCCSN and Working Group take a closer look into that area for possible adjustment, or at least alternatives to present to the Committee.
Regarding instructional equipment funding, Chairman Raggio noted that the proposal was $5,200 per year for the universities and $3,500 per year for the community colleges. He asked how those amounts were derived. Mr. Eardley answered that he was not certain how that figure was derived. Dr. Ashok Dhingra, Vice President, Administration and Finance, University of Nevada, Reno (UNR), stated that equipment dollars were derived by considering the three component needs for equipment on campus: 1) Faculty start-up costs. There were a significant number of faculty that were recruited on the campus at a cost of $1.5 million. However, the universities were unable to provide those faculty members with substantial equipment needs or even make the offer of equipment in order to attract them to the campus in the first place. They were hoping that if the item is funded, that issue would be addressed. 2) $1,000 per faculty member for work station replacement. It is believed that every three years, the workstation for each faculty member should be replaced and the cost of that was about $3,000 per workstation. 3) Replacement of equipment for faculty members at the cost of $1,700.
Chairman Raggio requested that when the UCCSN prepared cost estimates for the recommendations that they include the difference in what was being deleted for the cost of replacement and maintenance and what the new formula would provide.
Turning to instructional operating and wages, Chairman Raggio noted that the recommendations suggested that the operating wage cost be funded at an average rate per faculty and per classified FTE positions. He commented that the recommendation reflected $8,000 per faculty at the community colleges but it actually should be $4,100. Mr. Eardley said that was correct. Chairman Raggio said he was informed that the amount was $5,075 per faculty member at UNR and that did not include classified FTE, and at UNLV the amount was $6,029. Assuming those numbers were correct, he asked why the proposed amount of $6,000 was being used when the actual current average funding for both UNR and UNLV was approximately $5,500.
Mr. Eardley answered that the universities used the data from the State of Arizona study and Dr. Dhingra could discuss in greater detail how that amount was computed.
Chairman Raggio asked why $2,300 was being added per classified FTE. Dr. Dhingra replied that the Working Group used the University of Arizona model for developing the operating budget needs for the instruction appropriation. For the last seven biennia, the State of Nevada has not received any inflationary increases in order to meet the operating needs. They believe that inflation needed to be addressed, whether it was in faculty members or through operating with faculty and classified, a significant increase in the operating budget was necessary.
Chairman Raggio opined that the recommendations brought forth by the Working Group seem to be a compilation or “cherry-picking” effort of the best policies from many states. Yet the cost factors require compression to address Nevada’s specific revenue sources and those figures were not provided to the Committee.
Dr. Dhingra acknowledged Chairman Raggio’s comment that the Working Group looked at the best possible formulas that could be developed for the State of Nevada to fund higher education and it was now time to go back and review the numbers while still addressing the past inequities or inadequacies such as inflation factors. Chairman Raggio asserted that everyone was sympathetic to the inadequacies, yet reality must be faced and the UCCSN should identify which recommendations have the highest priority in order to develop meaningful recommendations.
Dr. Dhingra anticipated that at the next Committee meeting the revisions to the recommended formulas would show a reduction but still reflect the equitable formula.
Chairman Raggio indicated he had similar concerns regarding the Academic Support formula whereby the recommendation was to increase the figure by 7.5 percent for technology. He contemplated that such an action would equate to a large increase so the Working Group may wish to re-examine that issue and come up with a less costly yet still equitable alternative. As to the Academic Support formula at the community colleges, Chairman Raggio noted the increased percentage of five percent for technology needs, and asked whether that included the support for the High Tech Centers. He asked what the funding policy was regarding the High Tech Centers as it was his understanding that when the state agreed to fund, in part, High Tech Centers, it would be a shared responsibility with the school districts.
Dr. Anderes replied that the involvement with the school districts varied for the High Tech Centers. In some cases, the UCCSN worked with the school district and received in-kind services. He was not certain whether there was any instance that involved direct cash. The initial structure established set forth a 50/50 split of responsibility and that was probably a weakness in the area of High Tech Centers.
Chairman Raggio asked Dr. Moore whether the original concept with High Tech Centers was that there would be a shared responsibility between the UCCSN and the school districts. Dr. Moore said that was correct—the operational costs were to be shared. Chairman Raggio said that at some point, perhaps not through the activities of this Committee, a better understanding of how the responsibilities of the High Tech Centers were being handled was necessary and there should be a uniform method established and maintained.
Turning to Student Services, Chairman Raggio noted that the recommendations by the Working Group were to reduce the current enrollment and headcount from in one instance 300 to 200 and in another instance, 400 to 300, etc. He asked why those reductions were being recommended in the drivers. Dr. Anderes answered that for years the system has been expending more in Student Services then what the formula allowed. The basic assumption was that the UCCSN institutions were providing the same services as institutions throughout the rest of the country and there was something wrong with the formula.
Chairman Raggio clarified if what Dr. Anderes was saying was that currently the UCCSN was exceeding in great measures what the average allowance was for Student Services. Dr. Anderes replied that even if the funding formula for Student Services were fully funded, the UCCSN would still exceed the formula.
Chairman Raggio asked whether the system had the information to back up that statement and Dr. Anderes indicated that he did. Also, he mentioned that the system has been exceeding the Student Services formula for years and part of that was due to different services and more services being provided to students, with some of that directly related to ADA requirements. Dr. Anderes indicated that it might be useful for the UCCSN to identify the various services that have expanded or new services that have been developed on campuses since 1986 because there were many.
Chairman Raggio asked what the professional-to-classified ratio was currently at the universities for funding purposes. Mr. Eardley said there was no funding ratio at the universities (full-time, part-time) if that was what the Chairman was referencing.
Chairman Raggio reiterated he was interested in the professional-to-classified ratio. Dr. Anderes answered that he was uncertain what the actual ratio was but the funding for professional-to-classified was 5:1.
Continuing with comments on the recommendations proposed by the UCCSN, Chairman Raggio asked how the $1,000 figure was comprised for each disabled student. Mr. Eardley replied that the figure should be based on the actual, documented need but that issue needed to be discussed further.
Chairman Raggio inquired into the $1,000 figure listed for workstations for both professional and classified FTE. He asked whether that was an annual figure. Dr. Anderes answered that it was an annual payment. He said the actual cost was $3,000 per workstation so they would be looking at a 3-year replacement plan cycling through at $1,000 per year.
Dr. Dhingra mentioned that the $1,000 per disabled student was the actual cost. Dr. Moore commented that disabled students in the state were now more organized and demanded more continuity and services. For example, the hearing disabled required more interpreters and the rules called for a different interpreter every 30 minutes. Hence, the cost of assisting hearing-impaired students has gone up three-fold in the last two years. Basically, Dr. Moore concluded that the cost pertaining to disabled students was greatly increasing for higher education institutions and a better handle on the issue was required.
Chairman Raggio asked how the figure was computed for the new position ratios in the O & M Plant formula. He asked what kind of administrative position would be funded if the recommendation in that category were approved.
Mr. Eardley answered that it was his understanding that the distribution of three custodial, three maintenance and one administrator position was based on the actual distribution on the campuses.
Chairman Raggio asked why the existing formula using the 12,000 square foot driver was being eliminated. He added that his comments were directed at the Working Group so when they returned to the Committee at the next meeting they would re-examine particular areas to better identify costs.
Mr. Eardley said he understood the position of the Committee and the Chairman in particular and, further, he agreed in many areas. He acknowledged that the Working Group needed to review the formula drivers and provide justification for whatever recommendations were suggested.
Chairman Raggio asserted that the UCCSN was aware of the concerns of the Committee. He thanked the Working Group for the tremendous effort that has come out of that group and in such a short period of time. He concluded that the Committee was looking at getting the recommendations to a manageable point by the next meeting.
Mr. Eardley asked whether the information was necessary prior to the next committee meeting or whether it could be provided at the next meeting in June 2000. Chairman Raggio responded that the information would be most useful one week prior to the meeting.
Continuing with comments from the Committee on the recommendations of the UCCSN, Senator Titus stated that in regards to the salary equity issue, if people were hired at the same salary as opposed to a salary based on existing averages, then over time that would lead to future inequity because the so-called built-in amount was not built in. Secondly, she asked whether the recommendation regarding the salary equity issue only addressed the faculty hired from this point forward of if the UCCSN was contemplating making all existing faculty salaries equal. Dr. Anderes indicated that the recommendation would address the new hires from this point forward.
Additionally, Senator Titus said it was her understanding that the new proposal would hire all new positions at the same salary. However, she asked how the new formula would handle a situation where two people retired (someone from the Political Science Department at UNLV and someone from UNR) and a new person was hired, not be a new position, just a new person, would the replacement new person at UNR be hired at the old, higher salary then the replacement person at UNLV?
Dr. Anderes replied that the re-hiring of a vacant position would not be tied to recommendations in the formula at all. In other words, the vacant position would have a value ($70,000), but it was in the discretion of the institution to fill that position at $70,000 or fill it at $45,000 and use the other dollars for temporaries or Graduate Assistants. The decision could also be made to hire that position in at $85,000 and then $15,000 would have to be identified elsewhere. Dr. Anderes reiterated that the recommendation under the formula only applied to new faculty and only in terms of funding. He stressed that the institution was not tied to hire someone at $60,388 but funding would be at that amount.
Senator Titus recollected that Dr. Anderes mentioned that the system would have to establish some sort of policy whereby both of the universities were following the same pattern. If both UNR and UNLV opted to hire someone at the Assistant Professor level when a full professor was retiring so they could use the money in some other fashion, would there be a policy in place so that the Assistant Professor hired at both universities would be hired at the same level?
Dr. Anderes replied that ultimately the system would have to develop a policy, without monitoring every single position, that enables the system to obtain a sense on how the extra dollars were being used while still making it clear what the implication was for average salaries. He concurred with Senator Titus that UNR could hire all new hires at the Assistant Professor rate, which was lower than the $60,000 level and then UNLV could hire new hires at the Associate Professor level and that would automatically create disparities in the average salaries. The UCCSN will have to create a system to monitor and make adjustments so that both institutions were aware of what was being done with the new positions.
Chairman Raggio stressed that Senator Titus brought up a very good point. He reminded the Committee that the recommendations delineated by the Working Group were simply formulas for funding and the arguments for salary inequity were made based on the actual salary, not the money that was funded. The Legislature has funded salaries equitably yet the salaries were not the same because of the flexibility instilled on campus.
Dr. Richardson said he was supportive of the “pooling” concept that has been proposed in order to equalize salaries between the two universities. He expressed concern that there should be flexibility on the use of that pool of money as he has seen this “compression” problem on other campuses throughout the country. That is, if there was a pool of money that could only be used for new hires, then that leaves out the folks that have been loyal to the institution for years in terms of salary levels. He hoped that how the pool of money was administered would be investigated further and that since it involved mostly UNLV, that faculty from UNLV be involved in the discussion of how that pool of money was constructed and used.
Secondly, Dr. Richardson said he had a topic of concern that he has not yet heard addressed and that dealt with levels of funding. He noted that the recommendations of the Working Group showed two different areas that appeared to be a denigration of graduate education in Nevada. He stressed that he did not believe that was intended but he would welcome conversation on that subject. He directed the Committee to page one of the comparison document (Exhibit H) where student credit hours were calculated and the proposal was to change the driver from 16 to 24 for a master’s level and 18 for doctoral level. Dr. Richardson said that proposal came with an implication that it did not cost as much for graduate education.
Dr. Anderes said the Working Group looked at a variety of formula funding states when devising these recommendations. However, not one state in the country was at 16:1 so they decided to create the division between the masters and doctoral programs while still being in conjunction with what the rest of the nation was doing. He concluded that the 16:1 ratio that currently exists was really quite rich.
Dr. Richardson pointed out that on the last page of the comparison document (Exhibit H), the change of the driver under the Graduate Assistant formula from 1-5 to 1-7 at the master’s level was also a concern. He explained that assistantships were not funded anywhere near 100 percent, but those assistantships helped the citizens of Nevada and others get support for graduate education and certainly contributed to the development of the larger pool of graduate educated people in the state.
Dr. Anderes reminded Dr. Richardson that the formulas were designed for the purposes of funding and was simply driving numbers based on what other states were doing and the realism of existing formulas. The recommendations were not designed to indicate support or nonsupport for a particular category.
Dr. Richardson asked whether his interpretation of the funding “pool” of money could lead to compression with the existing faculty members. Dr. Anderes agreed that could happen and he believed that UNLV and UNR would need to look at their systems of using vacancy savings dollars and new dollars and come up with a process that was relatively the same. In the process, there would always be some compression problems because that was inevitable. However, it was within the vacancy savings dollars, not the equity pool, that the compression problems could be solved.
Regent Seastrand mentioned that the Board of Regents recently completed a space equity study and he wondered whether that study was considered when making recommendations for the O & M Plant funding formula. Dr. Anderes replied that it was his understanding that the primary emphasis of the space equity study was along the terms of a space inventory and attempted to bring about consistent definitions to be used by the institutions so that numbers relating to space would be equitable. That study was primarily for the purposes of looking at funding for space gaps and identifying gaps in classroom and laboratory space or other types of space, as opposed to the operating budget, and that was a capital budget model. He opined that there would not be a direct link with the space equity study and the formula funding study.
Regent Seastrand asked whether the UCCSN was planning to use the same space inventories as established in the space equity study. Dr. Anderes indicated that was correct. As a matter of interest, Dr. Anderes informed the Committee that the space equity study has provided the UCCSN with a very accurate and understandable space inventory that was “second to none” in the country.
Mr. Snyder said he liked the work that was done by the Working Group in that it was thoughtful and helpful and he liked the “blinders-off” thinking that went into the recommendations. To a certain extent, before restraints were placed on the proposals, it was helpful to understand the issues and “cherry-picking” the best ideas from other states was useful. He opined that constraints should be addressed by the Committee not the Working Group and the Working Group should not be pressured to bring back recommendations that were “too sanitized.”
Mr. Snyder acknowledged that from the very beginning the Chairman has made the Committee aware that there was only so much money to go around, but part of the charge of the Committee was to be cognizant of and mindful of shortfalls in funding of higher education, particularly if there was access to funding available through local communities or some other fashion.
Mr. Snyder said he was encouraged by the recommendations of the Working Group in terms of creating a mechanism for balancing and equalizing salaries between the institutions. He was also encouraged by how technology was being brought into the funding formulas since that was an area that has changed substantially over the past few years since the initial 1986 formulas came into place. He opined that the process should be as “pure” as possible before too many constraints were implemented on the system.
Chairman Raggio extended appreciation for Mr. Snyder’s comments and clarified that it was the Chairman’s position that the Committee could not responsibly place any constraints on any changes the Committee may wish to make until the UCCSN informed the Committee what the costs were in relationship to the recommendations. Until that information was received, it would be difficult for the Committee to limit what could conceivably be recommended. Secondly, Chairman Raggio stated that rather than the Committee doing the eliminating of any proposed changes, he would like to hear the priorities and suggestions from the UCCSN on what they believe would be manageable. Chairman Raggio emphasized again that the Committee was charged with determining how available money was allocated. If new money became available for this purpose or other state purposes, then additions could be revisited.
Mr. Snyder said he understood the comments made by Chairman Raggio but it was his thought that the Committee had the benefit of the Working Group and to hear the thoughtful analysis of the areas that should be considered regarding changes to the formula. He agreed that those changes and/or suggestions should be accompanied with information on costs and if those costs exceeded the amount of available funding, then constraints should be applied, but not until then.
Chairman Raggio concluded that Mr. Snyder’s comments mirrored the Chairman’s concerns.
Dr. Harter asked for clarification on the salary equity issue. It was her first impression that with the salary “pool” for new positions, there would be a potential for compression with existing faculty, and that led to the recognition that they would probably have to take from that equity pool the dollars that were necessary to ensure equity was maintained within existing faculty. Even so, that was a better circumstance than having each new position already creating a $5,000 new equity problem. Therefore, she would prefer to have the salary pool to assist the institutions with the new positions, and let the institutions find ways to help make equitable the continuing positions if compression occurs.
Speaker Dini stated that regarding the Equipment Maintenance and Equipment Replacement formulas that were being proposed for elimination from the formula, it was his recollection from the 1986 funding study that there was a problem on the university campuses that they were not maintaining their equipment or replacing their equipment in that they were receiving funds for that purpose but using it for other things within the system. He would like to see a guarantee that the maintenance of equipment was taken care of and the same situation that occurred in the late 1980’s early 1990’s was not repeated.
Dr. Anderes concurred with Speaker Dini. He pointed out that in the last biennium, the UCCSN had approximately $4.5 million overall for equipment and it was his impression that there was a much greater emphasis on equipment needs over the past several years due to technology and growth. The growth in the system has been such that equipment needs were a higher priority and he would agree that equipment maintenance and replacement should be a priority.
Speaker Dini said there was a lot of money invested in capital improvements and maintenance of the equipment was important for all the institutions.
F. Working Group Report – Dr. Ashok Dhingra
Dr. Dhingra provided the Committee with a handout relating to Library Comparative Data (Exhibit I) and reminded that the Committee had asked the Working Group to come up with information regarding comparative library data for the peer groups. He explained that he and his staff prepared charts from the IPEDS data for the two universities in the system, which was the same source used by Dr. Leslie in the development of peers. The information provided (Exhibit I) dealt with the listing of the peers, including the cities and states in which they are located, the numbers of degree granted by institutions, whether the institutions had medical schools, the highest degree offered by the institutions, and the number of baccalaureate, masters and doctorate degrees offered by the institutions.
Dr. Dhingra pointed out to the Committee that the next three pages of his report (Exhibit I) consisted of a listing of various types of library documents reported in the IPEDS data, including books, periodicals, maps, manuscripts, microforms, graph materials, film & video, computer files. He indicated that the information was provided in two columns with the first column reflecting the number of units added in that particular year. The data was from Fiscal Year 1996 and the information was provided for both UNR and UNLV and the peers as identified by Dr. Leslie. The chart also provided a column for the total spending by the institutions for Library Acquisitions.
Dr. Dhingra concluded that the information he provided was what was requested by the Committee but he was interested in knowing whether the Committee needed additional information or wished the same information be provided for the community colleges within the UCCSN and those peers.
Chairman Raggio asked whether there were any questions from the Committee.
Regent Derby asked whether information was available for the community colleges or whether a parallel was to be assumed based on the information from the universities.
Dr. Dhingra said the report (Exhibit I) was due by March 31, 2000, and since the Committee had not decided to include information on the community colleges, he simply provided what was requested. Based upon the actions of the Committee at this meeting, perhaps the Working Group would be directed to perform more work in obtaining the information for the community colleges. He stated he would be happy to move forward in obtaining that information if that was the wish of the Committee.
Chairman Raggio asked whether, knowing the timeframe of the Committee, the Working Group would be able to collect a major part of the information that might be available for the community colleges. Dr. Dhingra said he would talk to his colleagues but he thought the information would be easily obtained.
Chairman Raggio asked Dr. Dhingra to proceed accordingly and further indicated he would accept the report at the time the final report was presented.
G. Working Group Report – Brian Burke
Brian Burke, Legislative Counsel Bureau, Fiscal Analysis Division, stated that upon direction by the Committee, the Working Group wrote to the State Higher Education Executive Officers (SHEEO) and the National Conference of State Legislatures (NCSL) to solicit information on states that offered incentive plans to their public universities and colleges.
Mr. Burke said the Working Group requested information regarding how other states approached the “use or lose” funding philosophy. SHEEO and NCSL’s responses to the Working Group queries were provided under Tab G, beginning on page 201 of the meeting packet (Exhibit C).
Mr. Burke said that 20 states responded to the requests of the Working Group. Of those states, 11 allow a general balance forward with no special requirements: Alaska, Arkansas, Arizona, Delaware, Indiana, Kentucky, Minnesota, New Jersey, Pennsylvania, Texas and Washington state. Continuing, Mr. Burke related that 7 states allowed carry forwards with special provisions or incentives: Florida, Georgia, Louisiana, Mississippi, Montana, Ohio and Wyoming. Two of the states polled have no carry forward or incentive plans: Hawaii and Massachusetts.
Mr. Burke advised the Committee that the Working Group simply gathered data to provide the information to the Committee and were making no recommendations.
Mr. Snyder asked what Nevada’s position was on savings incentive plans. Regent Derby replied that Nevada did not carry forward year-end funding.
Chairman Raggio asked if there were any further questions on the issue of savings incentive plans from other states or if there was any public testimony on any of the issues covered thus far.
Chairman Raggio acknowledged Dr. Jane Nichols, Vice-Chancellor of Student and Academic Affairs, UCCSN, present in the audience and announced that Dr. Nichols had recently been named as Interim Chancellor of the UCCSN effective July 1, 2000. Chairman Raggio asked whether Dr. Anderes, current Interim Chancellor for the UCCSN, would be sitting with the Committee until Dr. Nichols took over. Dr. Anderes indicated he would be in attendance until that time.
Addressing an issue from the March 2, 2000, Committee meeting, Chairman Raggio asked Dr. Crowley to comment and explain 24 percent differential between its peers as identified by Dr. Leslie’s peer analysis.
Dr. Crowley explained that such a comparability problem existed when using IPEDS data because such data included everything and it was difficult to determine from looking at institution’s figures what was actually included. For instance for UNR, the data included the University Inn, Lawlor Events Center, the Fire & Science Academy and various other types of facilities and the costs of operating those facilities and peer institutions in the report may not have or may have an entirely different group of operating costs unlike UNR. Dr. Crowley said it was a basic problem with IPEDS data because what was being compared was not always clearly identified. However, the IPEDS data was all that was available.
In addition, comparing an institution that had 9,000 FTE (the approximate number for UNR) when the average of the peers for UNR was approximately 15,000 FTE, brought economies of scale into the picture. Dr. Crowley recollected that Dr. Leslie attempted to clarify in his presentation of the peer analysis report, that economies of scale must be appropriated and then the data included in the peer institutional summaries, including the high expenditure figures, should be looked at further.
During the discussion on peer comparisons, Dr. Crowley said he attempted to make the point that the 24 percent listed for UNR could not be viewed in isolation.
Mr. Snyder commented that Dr. Crowley’s comments directly reflect why many members of the Committee had concerns over the peer analysis, the recommendations that were made regarding peers, and why the motion was challenged earlier. He opined that there was a fundamental weakness in applying the peer analysis data to important decisions that have not yet been made. He clarified that he understood the way the peer report was accepted and the motion that was finally accepted.
Chairman Raggio indicated that it was his belief that the Committee was in accordance regarding the acceptance of the peer analysis information and the motion reflected that position.
I. Schedule for Next Meeting
Chairman Raggio stated that staff polled the members as to availability of future meeting dates in order to ensure that a quorum of the Committee would be present. From that poll, two dates were identified: June 8, 2000 and June 21, 2000.
Chairman Raggio informed the Committee that the activities of the Committee must be concluded by the end of June 2000 so two meetings may be necessary to make final determinations. There will be a meeting on June 8, 2000, at which time the requested information will be forthcoming from the Working Group. The Committee may need to meet again on June 21, 2000. Chairman Raggio said there was no choice because those dates were the only dates solicited that would provide for a quorum of the Committee.
Dr. Richardson said he was unable to be present on June 8, 2000, because he was chairing the National Meeting of the American Association of University Professors to which he was President. With that in mind, he would strongly lobby for a second meeting on June 21, 2000.
Chairman Raggio concluded that the next meeting would be on June 8, 2000, and there very likely would be another meeting on June 21, 2000. He asked the Committee, if at all possible, to arrange their schedules accordingly.
There being no further business to come before the Committee, the meeting adjourned at 3:15 p.m.
Joi Davis, Committee Secretary
William J. Raggio, Chairman
Date: ______________________, 2000.