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Developing a Funding Model for Higher Education

Nevada’s policymakers engaged in a heated debate last week as they tried to develop a new formula for funding higher education.

State Senate Majority Leader Steven Horsford was critical of the specifics of a proposed funding formula laid out by higher education Chancellor Dan Klaich.

“I think this is tinkering, not fundamental reform,” Horsford said. “This is why the public hates government. This is unacceptable.”

The new funding model, which was introduced in January, is aimed at development a transparent and comprehendible formula for distributing state funding to Nevada’s public universities and colleges every two years. Klaich’s proposal would have allowed institutions to keep their own tuition and fee dollars while being supplemented with approximately $362 million in state funding. Funding would also be distributed through a discipline matrix, which assigns weight to each degree program based on its expenses for the state.

As such, degrees in science, engineering and medicine—which are highly dependent on resources—would have more funding than liberal arts programs. Moreover, institutions would only get funding for courses successfully completed by students. Any failing grades and drop-outs would not be counted in the funding formula.

While the concept of this funding model was agreeable to lawmakers and higher education officials, the course weighting has been the point of divergence.

Horsford was critical of Klaich’s decision to hire the National Center for Higher Education Management Systems to develop a course weighting system, pointing out their lack of transparency in calculations.

“NCHEMS overvalues some degrees and undervalues others,” Horsford said. “I don’t think it works for Nevada.”

“They know more about higher education funding than any other entity in the country,” Klaich said, defending his choice. “I didn’t second-guess them.”

Horsford suggested Nevada take the approach of Texas in undertaking its own cost analysis to determine the weighting of courses. However, Klaich pointed out that the costs of conducting such an analysis were unreasonable during tough economic times.

“We don’t have that money (to undertake a cost analysis). We don’t have any money to educate our students,” Klaich said.

On that point, though, Horsford was unsatisfied.

“So we’re just supposed to rubber-stamp this?” Horsford asked. “I’m not comfortable just to apply [NCHEMS’ analysis] without looking into it.”

The committee has until late September to finalize its new funding proposal before the governor approves the state’s higher education budget request. The committee has tabled this debate until late August.