UNR Budget: Misplaced Priorities and Diverted Resources
Part 1. Overview

This is the first of a series of analyses of the budget situation at the University of Nevada, Reno. UNR is facing serious budget difficulties in the 2023-2025 biennium despite an increase in total state appropriations of $26 million (20%) from FY2023 to FY2024 for the main UNR instructional budget [1]. 

The UNR administration has blamed legislative underfunding of COLAs for the current budget shortfalls in the state-supported instructional budget. However, the entire ongoing underfunding of COLAs for professional and classified staff of $21.7 million per year could have been covered if the UNR Administration had not chosen to fund non-academic budget priorities instead of the core instructional mission.

UNR’s core educational mission is largely accomplished by the work of rank-and-file faculty and staff serving students. It is funded through the main UNR instructional account in the State-Supported Operating Budget, the budget for most instructional and support personnel who directly serve students as well as basic operations. This series will document how the budget deficits at UNR are caused in significant part by the diversion of resources away from the core educational mission into other priorities of UNR’s administration, specifically:

• About $10 million per year in increased direct university support of Athletics. [Details in Part 2]

• New administrator positions and increases in their base salaries beyond COLAs and merit. From Fall 2020 to Fall 2023, the number of executive-level personnel at UNR (Executives and Range E Administrative Faculty) increased by 13 from 79 to 92 (16% increase). The estimated cost of new executive positions and executive raises between Fall 2020 and Fall 2023 over and above COLAs and merit pay is $4.5 million annually. That is an ongoing cost for these positions in future budget years. [Details in Part 3]

• About $3.7 million per year in inflation-indexed increases in student registration fees has been diverted from the State Operating Budget to the Capital Improvement fee and the General Improvement fee. [Details in Part 4]

• Up to $10.25 million per year committed to the new Business Building. Of that, $5.1 million per year is from student registration fees funded largely by diverting the inflation increases to registration fees from the State Operating Budget into the Capital Improvement student fee. Approximately $2.3 million per year is unrestricted revenue from $50M in Marigold Mine royalties transferred from the university to the UNR Foundation as a quasi-endowment. The remainder is to come from fundraising for the quasi-endowment (only $15M of $50M raised so far) and hotel project revenue yet to be realized. [Details in Part 5]

• About $3.5 million per year for the Digital Wolf Pack Initiative, which supports Apple Distinguished School status for UNR. [Discussed elsewhere.]

Each $1 million diverted from the core instructional budget is equivalent to about 10 new academic faculty hires [2].

UNR’s budget officers have counted on unrealistic increases in future student enrollment during a multiyear period of declining or flat enrollment, resulting in budget shortfalls of $8.5 million and  $10 million in FY2024 and FY2025, respectively. [Details in Part 6]

On December 1, 2023, the Board of Regents approved Option A for funding COLAs, which delayed 11% COLAs for faculty until October 1, 2024, and increased student fees and tuition by 5% to help cover the cost of COLAs for both professional and classified staff. In the budgets for Option A presented to the Regents, UNR projected that 108 positions would be eliminated or held vacant. This high number of vacant positions accounts for 76% of all vacant positions to be held vacant at all NSHE institutions. (UNR’s closest counterpart, UNLV, projected no positions to be eliminated or held vacant.) The UNR administration has imposed 5% budget cuts for FY2024 across all university units, while recent additions of personnel were concentrated in the administrative and executive ranks. UNR’s academic mission will be seriously compromised by these cuts to personnel and operations. [Details in Part 7]

These budget issues will be documented in subsequent posts in this series over the next few weeks, followed by suggested solutions [Part 8]. 

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The information in this series of analyses of the UNR budget is based on public reports and records, interpreted as accurately as possible given uncertainties in the assumptions used for various reports. Corrections from authoritative sources are welcome. Contact: kent.ervin@nevadafacultyalliance.org.

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[1] FY2024 NSHE State-Supported Operating Budget Report, University of Nevada, Reno (p. 29). Includes COLA appropriations. State-allocated American Rescue Plan Act funds were added to the FY2023 state appropriation for comparison with FY2024.

[2]  A UNR Assistant Professor hired at Q1 on the current salary schedule would earn $69,383. Adding the 33.8% fringe rate gives $92,834, or 10.8 positions per million dollars. By the Board of Regents action on December 1, 2023,  the salary schedules will be augmented by 10% as of July 1, 2024, giving 9.8 positions per million dollars for future new hires.

Articles in this series:

• Part 1. Overview
• Part 2. Increased University Support for Athletics
• Part 3. Growth of Executive Positions and Salaries 
• Part 4. Diverted Student Registration Fees
• Part 5. Business Building PPP
• Part 6. Inflated Enrollments
• Part 7. Underfunded COLAs
• Part 8. Summary and Solutions

Updated: on 1/3/2024 to clarify that the quasi-endowment for the Business Building is held at the UNR Foundation and was created with Marigold Mine funds transferred from the University.

Updated on 1/4/2024 to clarify that the $5.8 million increase in base salaries for executive-level administrators is for the entire group, not just for the 13 additional positions.

Updated on 1/8/2024 to report the cost of new executive positions and increased executive salaries net of regular COLA and merit increase and including fringe rate, per calculation in part 3.

The officers of the State Board of the Nevada Faculty Alliance are devastated by the horrific events at the University of Nevada, Las Vegas yesterday. There are no words that convey the bewilderment and sorrow we feel for our colleagues, friends, students, and all their families who are suffering. Platitudes, thoughts, and prayers cannot make this right.

Violence is never an acceptable solution. For now, kindness and understanding are essential. But in an uncertain environment that has stirred so many emotions and passions, this event reminds us that respect and compassion must guide our interactions with one another, especially in our institutions of higher learning.

We urge everyone in the NSHE community and our NFA family to be there for one another. Lend an ear to someone who just needs to talk, give them a shoulder to lean on, and gently reassure them that there is still good in the world. 

We encourage all NSHE employees to practice self care every day, but especially at times like this. Please remember there are resources to help those of you who are suffering from the trauma of this event including the NSHE Employee Assistance Program.

NFA members have additional benefits through our affiliation with the American Federation of Teachers (AFT), including trauma counseling and secondary trauma stress counseling. Each service requires an AFT member number. Individuals who are having trouble finding their member number can reach out to Tish Olshefski at tish.olshefski@aft.org for assistance.

Over the past decade, the Nevada System of Higher Education (“NSHE”) has implemented a series of small policy changes that, in the aggregate, have significantly eroded shared governance when it comes to the process of selecting campus presidents and the system chancellor. This became apparent when the agenda for the November 30 - December 1, 2023, Board of Regents quarterly meeting was posted and included proposals for the appointment of interim presidents at Great Basin College and College of Southern Nevada. Since both GBC President Joyce Helens and CSN President Federico Zaragoza had each given more than a year’s notice of their departures, it was surprising that the Board did not launch a national search for their successors. 

As it turns out, the policy that once mandated national searches for institutional leadership positions has quietly undergone multiple small changes since 2012, and now gives Regents the authority to appoint individuals in an interim capacity, potentially avoiding a search process altogether. This shift in policy effectively diminishes the scope and opportunity for meaningful faculty engagement in the crucial task of selecting their campus leaders.  

Following national presidential searches between 2007 and 2012, which resulted in the appointment of four internal candidates to permanent positions - Mike Richards, CSN; Neal Smatresk, UNLV; Marc Johnson, UNR; and  Bart Patterson, NSC - Regents initiated a discussion about the necessity of investing substantial time and resources on a search if the ideal candidate might already be at the institution. Consequently, they directed staff to research “best practices” governing presidential vacancies, which resulted in a presentation at a special meeting in October 2012. Ironically, during this presentation, the Board’s Chief of Staff reported that despite researching the Association of Governing Boards’ (AGB) publication “Presidential Searches” and contacting the  association directly, “such a model was not available.” The meeting minutes reveal a discussion that sometimes veered into the absurd. For example, while acknowledging that university provosts were the most likely individuals to ascend to a  presidential appointment, the Regents seriously discussed raising the selection standards for provosts as an answer to lowering the standards for selecting presidents.

Nevertheless, the Board crafted a policy proposal that was presented for discussion at an April 2013 special meeting. It defined the role of an “Officer in Charge” for the temporary absence or vacancy in the office of president, but also made the requirement for a national search optional. It allowed the Board to appoint an acting president and either initiate a search immediately or appoint an interim president and decide on a search based on the interim president’s performance. Following the April discussion, the finalized policy was adopted as an item on the consent agenda at the June 2013 quarterly meeting.

Under Board policy, an acting president temporarily holds the office during the process to select a permanent replacement and is not eligible to apply for the permanent position. An acting president is not required to meet the minimum requirements for the permanent position. An interim president, however, can be appointed for a period of one to three years and may submit an application to a subsequent search, assuming their appointment is not terminated by the Board. The Board also has the option, however, to forego a search and unilaterally appoint the interim to the permanent position. 

Other small, but significant changes were adopted at the March 2018 quarterly meeting. The main objective of that proposal was to align the procedures for selecting a chancellor with those already in place for presidents, but revisions to the presidential process gave the Regents greater latitude to immediately appoint an interim president, and the options to conduct either “a national, regional, in-state or other search for a permanent President” if the Regents ultimately chose to conduct a search.

Individually each change, as it was being adopted, appeared relatively benign, but the cumulative effect is a system where comprehensive searches to fill the top spots at our institutions may be the rare exception rather than the rule. 

To be fair, the policy still requires the Board chair and Chancellor to meet with campus constituencies, including faculty and staff leaders, administrators, students, and community stakeholders before making an interim appointment. But it does not define guidelines for the topics to be discussed, the information to be gathered, or the information to be shared. A superficial discussion about the preferred qualities of a new president would suffice. The Board is not required to seek input from constituents about individual candidates or share information about the process. There is no obligation for transparency.

Searches are imperfect, costly, and time-consuming. And if we’re honest, NSHE’s recent history reveals a less-than-stellar track record when it comes to conducting successful searches. However, searches conducted with integrity can and do attract a diversity of qualified applicants who meet broad-based criteria established by a variety of campus stakeholders. They seek to identify the best possible individual for a job, who may very well be an internal candidate. Sometimes it works, and sometimes it doesn’t, but it is the minimum standard for hiring tenure-track faculty. Why should the standard be lower for the chief executive officer of the institution?

The benefits of a well-planned search process are evident, but introducing an interim into the mix dilutes any advantages. To identify just a few:

• A search conducted while the departing incumbent still holds the position generates the strongest pool of applicants. 
  
• An individual selected through a robust search process will always hold more legitimacy in the eyes of their colleagues and constituents than someone who is unilaterally appointed. 
  
• Conducting a search for an interim won’t result in a diverse pool because individuals outside the institution will not apply for a position that may be temporary.
  
• Allowing an interim to compete in a subsequent search to fill the position permanently will depress the candidate pool since the interim has the inside track.
  
• Continually drawing on candidates from within the system runs the risk of developing institutional myopia by denying others from outside the system to bring their varied experiences to the table.
  
• Appointing an interim or permanent without a search eliminates the public process that can raise red flags about a candidate prior to appointment.
  

There are times when it makes sense to appoint rather than search. For example, when former WNC President Vincent Solis announced his resignation in November 2021, he gave the Board little more than a month to fill the vacancy. The three remaining community college presidents have all announced their departures well in advance giving the Regents more than enough time to organize and conduct comprehensive searches.

GBC President Joyce Helens, CSN President Federico Zaragoza, and TMCC President Karin Hilgersom

President Zaragoza announced in June 2023 that he would be leaving at the end of June 2024. A few weeks later, President Helens announced her plans to retire at the end of June 2024. And TMCC President Karin Hilgersom justified her request for a waiver of the periodic evaluation and one-year extension of her contract to the end of June 2025 by announcing to the Board last July that she would retire at the end of the extension.

On November 30, the Board made an interim appointment for the GBC position and was poised to make one for CSN before pulling the item from agenda. 

UPDATE, 12/6/23: An article in the Nevada Current reveals that at least one Regent, Laura Perkins, has concerns about the proposal for the interim president at CSN. A faculty leader also says the proposal bucks input gathered in a November campus meeting with the Board Chairman and Interim Chancellor where the consensus was for an acting president and national search.

While both individuals selected for these appointments have stellar qualifications and broad support from campus stakeholders, they also would have made strong candidates in a search. They will be odds-on-favorites for permanent appointments to the positions without a search. It’s unlikely the faculty, students, staff, or community played any role in crafting minimum qualifications and desired characteristics (if any were even developed), nor did they participate in screening candidates or submitting recommendations. In other words, the process excluded shared governance.

With 18 months to go before the next known presidential vacancy, there really is no good justification for not planning a national search to replace President Hilgersom. It should begin no later than October 2024. 

Advocating for, promoting, and protecting shared governance are prime objectives of the Nevada Faculty Alliance. This responsibility touches virtually all aspects of the operation of a system of higher education including participation in the hiring process for campus and system administrators. It is now clear that the existing policy governing vacancies in the offices of president or chancellor violates this well-established tenet. 

NFA strongly urges the Board of Regents to modify Title 2, Chapter 1, Sections 1.5.5. to require a national search if they become aware of a pending vacancy more than nine months before it occurs. Anything less is a betrayal of the critical partnership between faculty, students, and administrators that is necessary to maintain an effective system of higher education. 

On December 1, the Regents unanimously approved an 11% cost-of-living adjustment (COLA) for NSHE faculty, matching those for all other state employees. The Nevada Faculty Alliance passionately advocated during the 2023 legislative session for full funding of the COLAs. After the legislature deferred the decision on faculty COLAs to the Board of Regents with “not to exceed” language in SB522, we worked with NSHE and the regents toward full funding. That effort paid off with their approval of a 12% COLA for FY2024 and now 11% for FY2025, delayed to 10/1/2024 but applied to base salaries for the future.

We thank the Regents for recognizing faculty efforts across campus and helping us contribute to student success. However, the unanimous vote was the result of the voices of student leaders, who expressed their appreciation for faculty, and their willingness to increase their own fees. We are humbled and honored by their support. We also thank the 130+ members of the NSHE community who submitted written public comments and 35+ who gave oral public comments in support of the full 11%, as well as the faculty senates of the colleges and universities who unequivocally supported it. Finally, we thank our classified colleagues for their support–at a time when they are doing more with less. These shows of unity ultimately persuaded the presidents of CSN, GBC, NSU, TMCC, UNLV, UNR, and WNC to support the 11% option. 

Unfortunately, the COLA increase does not address many of the cuts coming our way. Since the State of Nevada is only funding 65% of COLAs for professional and classified staff, the rest will come from delaying the faculty COLA by three months, suspending faculty merit raises for FY2025, increasing student registration fees by 5%, eliminating positions and keeping vacant positions open, and other budget cuts and transfers. CSN and UNR are projecting the most position eliminations, 20 and 108, respectively, with UNR accounting for roughly 75% of the proposed position cuts across the whole system.

Despite narratives that faculty COLAs are responsible for student fee increases, the COLAs for professional and classified staff are not the main reason for budget challenges. Major shortfalls at some institutions are due to declining enrollments, new executive positions and raises for executive staff, and diversions of resources from core academic programs to priorities such as athletics and capital projects. Stay tuned for more details from the NFA about budget issues.

The NFA’s immediate focus is to shift budget priorities back toward our core academic mission for the benefit of students and to prevent or rescind cuts to faculty and staff positions. Advocacy with the NSHE Committee on Higher Education Funding is essential for a new formula mechanism that fully funds higher education and fairly apportions state and student funding. Then faculty, students, presidents, the chancellor, and Regents need to form a united front at the 2025 legislature to implement and fully fund the new formula. We will also be organizing through collective bargaining as a tool for working with management to advance NFA’s mission to empower faculty to be fully engaged in our mission to help students succeed.

For further information, here are some NFA posts that were recognized by Regents as influential:

• NSHE Fees Low Compared to Other Western Institutions
• NSHE Student Fees Are Third-From-Bottom Among 50 States
• NSHE Faculty Salaries Remain Low
• 2023 NSHE Employment and Salary Trends

Related Coverage:

• Las Vegas Review Journal: Nevada college faculty to get pay boost; students face fee hike
• Nevada Current: Regents to consider higher ed student fee and tuition increase to pay for raises
• Nevada Current: Regents vote to hike higher ed tuition, increase salaries by 11%
• Nevada Independent: Regents hike student fees 5 percent to fund 11 percent faculty pay raise
• Elsewhere:  CSU faculty to begin a week of strikes, demanding 12% pay raise this year 

Confirming previous reporting by NFA, an analysis of student fees and tuition at public higher education institutions in the Western United States illustrates that NSHE Institutions are among the most affordable. In considering the FY25 COLA proposal, members of the Board of Regents asked NFA officers for comparison of fees.

The task was challenging because different agencies use various methodologies for calculating student costs. Ultimately, we chose to compile the data from IPEDS to ensure accuracy and consistency. Here are some of the conclusions we can draw from this data. 

Fees and tuition at Nevada's universities fall within the lower one-third among similar institutions. They are 15% lower, or about $1,500 less per year than the average for all tier 1 universities in the region.

Nevada State College/University is the second lowest among its peers in regional four-year institutions. Its fees are 29% lower, or about $2,500 less than the average of comparable institutions in the region.

Nevada's community colleges are equally affordable. All four institutions fall within the lower third of their peer group. On average, it is about $480 cheaper per year to attend a Nevada community college than the average two-year institution in the region, not counting California community colleges where government funding enables atypically low tuition.

2023 NSHE Employment and Salary Report

The NFA annually obtains public employee data for NSHE faculty and classified staff through public records requests.  New employment and salary data as of November 2023 are compared here with the prior year.

Previous NFA news items discuss the Compensation Gap between Administrators and rank-and-file faculty at NSHE.  This past year continued the trend of higher raises for executives.

Highlights:

• Systemwide, the number of academic faculty increased by 52 to 3169 (1.7%), the number of administrative faculty increased by 282 to 3963 (10.1%), and the number of classified staff increased by 365 to 2901 (14.3%). These represent filled positions as of 10/31/2023 versus 10/31/2022.
• Continuing employees benefited from the 12% COLA as of 7/1/2023. Academic and administrative faculty were also eligible for a merit raise on 7/1/2023 from the internally funded 1% performance pay pool. Classified staff are eligible for up to nine annual 3%-5% step increases within a compensation grade.
• For continuing employees with no change in position title, the average individual salary increase (including merit, COLAs, and ad hoc adjustments) between 10/31/2022 and 10/31/2023 was 13.7% for academic faculty, 14.3% for administrative faculty, and 15.5% for classified staff. 
• For continuing employees with a change in position (e.g., promotion in rank, job change, or new title), the average individual salary increase was 20.4% for academic faculty, 30.3% for administrative faculty, and 25.5% for classified staff.  These percentages include individuals who switched to a different employee category.
• The number of executives (Executive and Administrative Faculty Range E) employed rose from 294 to 307, a 4.4% increase. UNLV added five executives and UNR added eleven, representing net new positions and filled vacancies.  
• New or changed executive position titles include, for example, “Special Assistant to the Vice President of Philanthropy and Alumni Engagement,” “Senior Vice Provost, University Projects and Strategic Initiatives,“ and “Vice President, Legal Affairs and General Counsel” (changed from “General Counsel” with a salary boost).
• Despite the recommendation in June 2023 by former Interim Chancellor Erquiaga that Executives voluntarily forgo the 12% COLA, none did.  Individual salary increases for 50 continuing NSHE, University, and Community College Executives ranged from $20,500 to $108,000. The total cost was $1.9 million.

Source: NSHE Public Records Requests.  Analysis by NFA 11/2023

Student Fees and Tuition at NSHE

Where are they and where are they going?

The NSHE Chancellor’s Committee To Recommend Board Action On FY 2025 Salary Increases is reportedly considering student fee increases to cover a portion of budget shortfalls for the 2024-2025 year. To put any such proposals into context, here we compare student fees and tuition at NSHE with other public state institutions.  We also discuss where fees are headed under the NSHE Predictable Pricing Program, which was established in 2019 and indexes student registration fees to the Higher Education Price Index.

There are various ways to measure and compare student fees and tuition among states. The National Center for Education Statistics compiles averages for the 50 states.  The chart below shows average in-state undergraduate tuition and required fees for full-time students for public four-year institutions for 2020-2021 (the most recent available data). The cost for Nevada’s students ranks third-lowest among the fifty states and the District of Columbia and only above Wyoming among western states. NSHE offers incredible value for students—average tuition and fees are $6434/year31% below the national average of $9375/year.  

Another measure is the net revenue from tuition and fees, which subtracts state-level financial aid and grants from the gross tuition and fee revenue, compiled by the State Higher Education Executive Officers Association (SHEEO). The chart below shows 2021-2022 state averages (adjusted for the mix of 2-year and 4-year institutions) per FTE.  The state rankings are scrambled after state financial aid is taken into account, but Nevada also ranks third-lowest in net revenue from students, at $2,793 compared with the national average of $7,244.  Not only are our tuition and fees relatively low in the first place, but Nevada is quite generous with our state financial aid programs including the Guinn Millennium Scholarships, Silver State Opportunity Grants, and Nevada Promise Scholarships. 

Does Nevada’s low student costs arise from high state funding of higher education? Not so much!  The SHEEO chart below shows state funding per FTE for FY2022 including both direct appropriations and student financial aid. At $8,022, Nevada's higher education appropriations per FTE including financial aid are 22% below the national average of $10,237 and ranks 34^th.

In 2019, the Board of Regents established the Predictable Pricing Program (PPP), which indexes future registration fees and tuition to the Higher Education Price Index (HEPI) published by the CommonFund. The NFA chart and table below compare the annual percentage changes in UNR/UNLV registration fees (the percentages are nearly identical for all institutions and for lower- and upper-level and graduate courses) with HEPI and the Consumer Price Index (Urban/West) from 2013 to present, along with future increases under the PPP.  Under predictable pricing, registration fee increases are set for four years ahead based on the most recent HEPI year. Since the HEPI numbers come out with about a 9-month delay after a fiscal year, that results in a five-year lag in adjusting for current inflation. So students won’t start paying for the high inflation of the past two years until 2026-2028. In fact, the annual percentage increases in student fees went down in 2021-2024 just as inflation spiked to historically high levels.  After inflation, per-credit registration fees have lost purchasing power by 8.5% just from FY2021 to FY2024. Since student fees have to cover about 35% of the NSHE instructional budgets, the ability of the institutions to provide services and pay its staff is diminished as costs go up rapidly. 

	Annual Change
Fiscal Year	Higher Education Price Index*	Consumer Price Index (Urban West)	NSHE Student Registration Fees**
2013-2014	3.0%	1.6%	0.0%
2014-2015	2.0%	1.5%	0.0%
2015-2016	1.5%	1.6%	4.1%
2016-2017	3.0%	2.4%	4.0%
2017-2018	2.6%	3.1%	4.0%
2018-2019	3.0%	3.0%	4.0%
2019-2020	1.9%	2.3%	4.0%
2020-2021	2.7%	2.4%	4.0%
2021-2022	5.2%	7.1%	2.8%
2022-2023	4.4%	6.3%	2.8%
2023-2024			2.5%
2024-2025			1.9%
2025-2026			2.7%
2026-2027			5.2%
2027-2028			4.4%
*FY2023 HEPI August Forecast. **UNR/UNLV Undergrad.  Predictable Pricing Program established 2019.

Analysis by the Nevada Faculty Alliance 10/2023.

Update 2/11/2024:  The final Higher Education Price Index for FY2023 published in December 2023 shows an increase of 4.0% over FY2022 (vs 4.4% from the August 2023 forecast).

NSHE Faculty Salaries

Where they've been and where they're going

The history since 2008 of NSHE faculty cost-of-living and other salary adjustments—including furloughs, salary reductions, average merit, and retirement contribution changes—is shown in the chart below. Even if the Board of Regents approves the full 11% COLA for FY2025 (pink hatched bar), take-home pay will only return to FY2015 levels in constant dollars and will reach only 89% of the salaries in FY2009.

This chart includes average merit raises (performance pay) but applies to faculty members who have not received a promotion or ad hoc raise.

Based on the 2022-2023 AAUP Faculty Compensation Survey, academic faculty salaries at UNLV and UNR were 16% below the average for faculty at doctoral universities nationwide and 23% below the average for public R1 research universities in the Western states.  Although the 12% COLA for 7/1/2023 approved by the Board of Regents will partially close that gap, other states have also implemented COLAs in the past year so it remains to be seen how much more we still need just to catch up to average.

(The AAUP survey has very limited data for community colleges.  The only other NSHE institution that participated in the survey besides UNLV and UNR was CSN, and there are few valid comparison colleges.)