Category Archives: Higher Ed

Salary Cuts at NSHE Actually Hikes

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One of the most piercing of all sounds emitted by government is the collective shriek of the workforce at the Nevada System of Higher Education. They claim they’re actually having to take pay cuts as a result of Nevada’s shrinking population (and tax revenue).

While someday it might be true, it doesn’t appear to be true heading into the spring of 2010.

Most everyone agrees that the professors and teaching staff are enjoying a healthy increase in their income this year. It’s the “classified” staff that’s gaining sympathy through doe-eyed looks and cooked books. As it turns out, they generally get an automatic annual pay hike that exceeds any proposed cost of furlough.

Classified Salary Schedules and furlough information:

Teaching Faculty:

The Classified Salary step increases (the pay increase for being there an extra year, excluding increases for promotions and CPI increases) range from a low of 3.3% to a high of 4.6% per annual step. For some reason the highest paid get the biggest percentage step increases. The furlough plan reduced pay by 2.3% per year and the schedule reflects a very small pay decrease (about 0.5%).

The good news for the employees, then, is that they don’t have to work as much and their base pay is not affected; after the furlough is over pay pops right back where it was. The employees can elect to take the furlough at 2.3% a year for FY 10 and FY 11 or get full pay in FY 10 and take 4.6% furlough in FY11. So the furlough offsets most of the classified step pay increases. If someone was at the top of the salary scale, then they wouldn’t get a step increase so for those few employees there would be a small pay reduction (2.3%) to compensate for the fewer hours worked.

Secondly, as previously stated none of the tenured professors were required to take any furlough and thus saw zero pay reduction. The employee’s benefits are also not reduced, just their hours of work.

For an example, picking someone in the middle of the schedule (step 40-1) where the employer pays the full retirement: They were making $51,364.80 in 7/1/08. In 7/1/09 their salary would be $53,452.80 (having moved a step by being there another year). As a result of the furlough, they get approx. an extra hour off a week (taken as a periodic day off without pay). This would reduce the employee’s $53,453 salary by 2.3% to compensate for the time off, reducing her pay to $52,223.

The bottom line for this employee? She is making about $858 a year more than he was the previous year and had to work 2.3% less. This is not ideal, but I find it hard to see how it is some kind of tragedy – certainly not by private industry standards. The tenured profs naturally fair much better than this.

Note that this example is before the special session so it is possible (but not certain) the changes implemented by the Board of Regents following the session will result in a small pay decrease for this employee.

So while a few NSHE employees will see a very slight drop in pay in direct relation to not having to work as much, most will see an increase in pay for not having to work as much.

This is in direct contrast to the biased pablum served to us each day by our TV stations and newspapers. They see the taxpaying private companies as under-taxed and believe increases are needed to pay the public employees what they believe they are due, so they present their viewpoint as fact.

In defense of NSHE classified employees, they correctly point out that their increases over the past decade have trailed those of other government workers. Does that make them poorly treated, or their richer employees of other branches and agencies shameless pillagers of the public trough?

Delay of Game

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UNLV officials strutted their stuff about town tonight. They were smug since they succeeded in hushing down plans to invest $14-million into a new “practice” facility for the basketball team until the Legislature finished its special session on how to deal with tax revenue falling short of targets.

The UNLV student government members who spent University dollars driving to and shacking up in Carson City to plead poverty at the Legislature must be terribly embarrassed.

UNR Budget Cut Prompts Reno Newspaper’s Wild Exaggeration

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The Reno Gazette Journal’s headline shouts: “UNR Eliminates 279 Jobs” but of course they are lying. If you read deep within Lenita Powers’ article, you’ll find the truth:

  • UNR paid 37 people extra to retire who wanted to retire anyway (1% of the workforce)
  • UNR didn’t extend the contracts of 37 employees (1.2% of the workforce) for whom there was no obligation to extend the contracts
  • The other 211 “employees”, were either not actually employees (just new people UNR hoped it might be able to hire) or are employees that will remain as employees but will be “paid out of a different account” (6.7% of the workforce)

Prior to these “drastic” cuts, UNR counted 3,145 positions (not all actually filled) according to this spreadsheet:

http://www.unr.edu/vpaf/pba/budget/historical/09state&selfFTE.xls

Recent University System Spending

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University Chancellor Jim Rogers’ grandstanding aside, the one-third reduction of taxpayer funding for Nevada’s system of higher education proposes to roll the clock back five or six years on spending.

Here’s the 2001 Appropriations Report, and the 2007 Appropriations Report. Together, they show student enrollment increase in the last six years was about 13.4% at UNR, and about 20.1% at UNLV.

They also show In 2002-03 the budget for UNLV, for example, was $140,300,576 (Ed Sect. web page 30). Six years later the legislatively approved budget was $270,250,842 (Ed Sect. web page 44), a whopping 92.6% increase.

The Gibbons proposal to prioritize government services and reduce NSHE tax proceeds by one third actually only reduces spending to around the same rate as enrollment growth.

“I would blow my brains out if I thought this was going through,” said Jim Rogers, apparently aching to take the place of Samuel Clemens in Nevada’s storied history.

Below is the University system spending since FY02:

Year Total Spending General Fund Spending
2001-02 $495,831,297 $346,845,022 (p.31)
2002-03 $530,804,136 $370,593,608 (p.31)
2003-04 $623,544,443 $482,655,305
2004-05 $660,235,771 $506,746,590
2005-06 $734,687,365 $557,374,664
2006-07 $792,195,555 $591,813,068
2007-08 $837,905,664 $639,293,540 (p.45)
2008-09 $912,423,319 $677,091,932 (p. 45)

Now, the Governor is proposing to reduce total spending down to a level that’s still higher than 2003/2004.

Bad Day To Be Jim Rogers

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An immense amount of planning and forethought has been invested by Jim Rogers in convincing Nevadans that our government has been already cut to the bone. No, beyond! Any more will destroy the state!

It’s gotta hurt, then, to wake up and read the Nevada Controller’s legally-mandated report on actual taxing and spending. Last fiscal year, state government spending increased 4.5% (although revenue “plummeted” by 2%).

We start with a media account of the critical 2008 CAFR. The actual CAFR will follow in a few days.

Nevada Government Economist Tells Half Truths

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This morning’s Las Vegas Sun featured a guest column from state government economist Elliot Parker. In his column, Parker lays out his case for more tax hikes, which will be required to hire more government employees and give them higher wages. You can read his column here.

Parker’s column essentially says Nevada’s people have been terribly chinzy when it comes to funding government, particularly as compared to other states. It would be a mistake, he implies, to not raise taxes and further expand government.

As an economist, government or not, Parker should be embarrassed by his intellectual dishonesty.

He writes:

According to the most recent version of the Statistical Abstract of the United States, only 5.5 percent of Nevadans work for the state or local governments, the lowest share in the 50 states by far.

This is probably a true statement, although the Statistical Abstract of the United States is very large, and Parker should offer a more detailed attribution. However, it presents only one half of what’s wrong with Nevada’s structure of government.

The very same authority (the Statistical Abstract of the United States) also says our government employees are paid the six highest of all states. Here is the Statistical Abstract of the United States. Table 448 – here is a direct link – column M details average earnings in 2006, the most recent year reported. [Subsequent correction: column M details local government only. Column J details state government, where Nevada ranks sixteenth, still above the national average.]

These wage numbers – in which Nevada ranks the sixth highest state – do not reflect Nevada’s exceptionally generous benefits package.

All of Nevada’s government employees participate in perhaps the only “defined benefit” retirement plan found in the entire state, public or private sector. And for local government and school employees in Clark and Washoe County  – well over half of all state and local government employees in Nevada – taxpayers foot the entire bill.

To put it in terms that most taxpayers can understand, where we lose 6.2% of our paycheck to fund social security, our government employees do not. So, for a given wage, they take home a bigger paycheck. (The rest of Nevada government employees, by the way, fund half of their own retirement plans out of their paychecks but it’s over 10% rather than 6.2% – on the other hand, they get alot more retirement income and retire much younger than the rest of us.)

If you factor in how government retirement works in Nevada compared to the five states that outrank us in average government pay, we’d likely rank higher than sixth.

Nevada’s “structural deficit” lies in giving government unions too much power, which has resulted in our having the fewest government employees per thousand residents (dutifully reported by Parker) who are paid at or near the top of America’s government pay scale (incredibly omitted by Parker).

Parker next rambles down the taxes-per-capita path without attributing his statistics. For example:

Adding in spending by local governments, Nevada ranks 48th in government spending as a share of income.

Since the Statistical Abstract of the United States does not explicitly calculate this, he owes us a peek at the bar napkin he scratched his out on.

Here’s mine:

Statistical Abstract of the United States, Table 424, column B has total revenue by state for 2005. Table 12, column AK, has 2005 population estimates, which appear to be overstated for Nevada. Nevertheless, you can put the two of those tables together to calculate tax revenue per person. Nevada ranks 29th, at $7,868 per person.

Since this clearly does not support the “chintzy Nevadans” refrain, and since Nevada’s historically modest government has not surprisingly produced a society with a robust economy, low poverty and high incomes, Parker had to track down average income levels. They’re here, in table 684, column M (unfortunately, this lists family median income by state for 2006, which is not quite average income for 2005, but it’s close).

And Nevada ranks 42nd, ahead of 8 states. Not 48th.

Parker finishes up with the now almost-legendary deception that:

The Tax Foundation reports that Nevada has the next-to-lowest tax burden in the nation, just slightly above Alaska. That ranking is roughly where we have been since the 1970s.

The Tax Foundation actually found that while we rank low on the taxes we assess on ourselves, we rank high on the taxes we assess from non-residents (tourists), and at the national median for total spending per capita. Once again, Parker selects a deceptively small subset of the available information to lead readers to an incorrect conclusion.

In case his subtle sins of omission are not enough, Parker finishes with a couple of whopping lies:

…there are also many things the private sector cannot efficiently provide. Like national defense, affordable and available public education is one of these.

and

Unlike most other states, Nevada has no private universities, so this is an important responsibility.

These are really the heart of the matter for Parker. As a government economist in Nevada, he’s been enjoying doubled cost-of-living raises for years (once for inflation and again from the NSHE “merit” program under which almost all professors get an extra COLA bump). And if we don’t raise taxes, he may not get either next year.

Of course the private sector can efficiently provide education. In Las Vegas, for example, Faith Lutheran‘s middle school tuition was $7,260 in 2006 including capital costs and debt service; that same year, Nevada public school funding was $7,345 not including capital costs and debt service.

And there are a growing number of private colleges in Nevada, including: Touro College, Sierra Nevada College, DeVry University, National University, ITT Technical Institute, University of Phoenix, Morrison University, University of Southern Nevada, with my apologies to the many more I don’t have time to list.

UNLV vs. Rutgers

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Here is an excellent article by the chair of UNLV’s Faculty Senate. Dr. Nasser Daneshvary responds to a social work professor who wrote a series of Sunday opinion articles portraying a dismal state of affairs and even darker future – unless Chancellor Jim Rogers gets his way and raises taxes.

Dr. Daneshvary agrees that UNLV is severely underfunded, but nevertheless has some shining areas of excellence.

  • Enrollment appears to be increasing in key areas.
  • Entrance standards were raised to a 3.0 high school GPA this fall.
  • UNLV was the 4th fastest growing university in America in research output, during a time when the top-200 universities were flat or declining.
  • UNLV is top-ranked in advertising research.

Mostly, he correctly notes, UNLV is only 50 years old – compared with Rutgers, which is pushing 250 years old. Rutgers was the comparison institution in the dark portrait painted by the social work professor.

I believe UNLV will continue to be underfunded as long it depends so heavily on state taxpayers. Rutgers, for example, only gets 25% of its funding from New Jersey state taxpayers where UNLV gets 44% of its funding (including capital) from Nevada state taxpayers.

Of course, for some, Nevada families will never pay enough taxes. Some people will always think UNLV underfunded, just as some people today say Rutgers is underfunded.

Dental School Roots Betrayed

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UNLV’s Dental School was created on a promise – now proven false – that it would not cost Nevada taxpayers anything. Rebecca Ward from Dayton, NV, emailed legislators in 2005…

I am writing this e-mail to express my thoughts regarding the Dental School.  I am a retired State employee.  When the Dental School was first introduced to the legislators, I was the budget analyst in the Department of Administration who prepared the Executive Branch budget for the Division of Health Care Financing and Policy.

I will never forget how Senator Rawson pushed through his plans for the Dental School.  It was at a time when all budgets were severely restricted from introducing new programs due to State fiscal problems.  All new programs were to be justified through an extensive “business plan” process.  Senator Rawson used his considerable power to push this program through without the normal “business plan” checks and balances.  Instead, he convinced his colleagues that this program could be funded primarily through Medicaid funds, Intergovernmental Transfer Account funds, and other miscellaneous funding.  He also claimed that there was a severe shortage of dentists in Nevada and that the school would alleviate this shortage.

It is my opinion that the Dental School was not properly justified and that it was pushed through at the final legislative hours for purely political purposes.

A Review Journal editorial reported the same information…

The sponsors’ initial promise was that Nevada’s dental school would cost the state nothing — Medicaid funds that foot dental care for poor children would simply be channeled to the new school, covering its entire budget in exchange for the instructors’ willingness to perform the needed charity work “out the back door,” as it were.

When that turned out to be illegal, a new pair of schemes was hatched. The state contracted with Sierra Health to handle the Medicaid contract — paying that firm a percentage of the take for this legal “cover” — and meantime the state bought out three private Southern Nevada dental practices, the intention being to take over those patient rosters, have dental school faculty tend to those patients’ dental needs, and use the resulting profits to fund the dental school.

But, “The patients more or less found other service providers,” recalls state Sen. Bob Beers, R-Las Vegas, who replaced Mr. Rawson in Carson City.

The bottom line? In the fiscal year ending June 30, 2004, the dental school collected only $2.35 million of registration fees. The rest of its $26 million budget comes from taxes of one form or another, no matter how they’re routed. That budget is slated to go up next year and every year thereafter.

The problem with closing it down is there are students there who believe they are entitled to their degree – and a number of legislators agree and are willing to raise taxes to fund their belief. However, with many US dental schools now private, perhaps we can find one that would agree to “take over” UNLV’s school, with a state subsidy for existing students until they graduate.

UNLV Diversity Office Very Expensive

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So, folks, here’s the bone.

UNLV’s Vice President of Diversity and Inclusion is paid $163,000 per year. Tack on 30% in benefits, and you’re over $200,000. And that probably doesn’t include her government car. And she’s got a staff of three or four and a travel budget. To do what?

The Las Vegas Sun’s search engine offers several thoughts, but the first story that comes up suggests that “diversity” means applicants who don’t meet academic admission standards should be admitted anyway, if Dr. Clark approves of their race:

…taking race into account in admissions would be an appropriate way to increase diversity — if only Nevadans were ready for that.

“I would like for us to consider race, but I do not think there is support for that in Nevada at the moment,” said Christine Clark, vice president for diversity and inclusion at UNLV.

The second story makes it clear that the wasteful effort is Chancellor Jim Rogers’ idea:

University system Chancellor Jim Rogers in December 2005 mandated the position, which had been a matter of contention with then-President Carol Harter. They quarreled about the need for the position and the job description.

Another newspaper story starts out:

UNLV and UNR administrators are flummoxed, trying to improve their campuses’ reputations by raising academic standards without undermining campus diversity.

Campus diversity, at the expense of raising academic standards, is costing students and taxpayers a quarter-million dollars per year.