Subcommittee approves $1.26 billion university budget

Lawmakers on Tuesday gave tentative approval to a $1.26 billion university system budget, up 23 percent from current spending.

The spending plan follows the recommendations of Gov. Kenny Guinn with one key change. Under the governor's plan, the university system would have had to absorb any shortfall in estate tax revenues.

Under the plan approved Tuesday, the state general fund will guarantee $90 million in hoped-for estate tax revenues over the next two years.

The proposed budget is $238.1 million more than the current two-year budget -- an increase of 23.2 percent.

It still falls short, however, of the amount formulas say are needed for instruction and support of the students enrolled at the state's colleges and universities.

Legislative analyst Brian Burke told the Senate Finance, Assembly Ways and Means subcommittee that enrollments are 1,661 students above projections used to build the budget for 2004, and 2,294 more than projected for 2005.

Lawmakers would have to add $20.9 million to the budget to reach 86 percent of full funding, the target Guinn had set.

Senate Majority Leader Bill Raggio, R-Reno, pointing to the state's tight budget, recommended the formula be changed.

"That would still be more than the 80.29 percent we funded them at two years ago," said Raggio. "That's still a significant increase."

Ways and Means Chairman Morse Arberry, D-Las Vegas, moved to keep the state funding the same and lower the formula percentage from 86 to 84 for the coming biennium. Because of their differing growth rates, that change will cost the University of Nevada, Reno $3 million and the University of Nevada, Las Vegas $211,920 over the next two years. Western Nevada Community College will lose a total of $1 million in 2004 and 2005, while Truckee Meadows Community College gains $2.1 million and Community College of Southern Nevada benefits by $2.6 million.

The increase in enrollments, however, will generate about $6.7 million in extra fees and tuition. Lawmakers voted to use that money to take care of a $4.5 million increase in costs because of errors discovered during hearings on the budget -- primarily a miscalculation in the amount needed to cover employee group insurance assessments within the university system.

The university won one other battle as well: permission from lawmakers to use any fees in excess of what was budgeted on instructional costs without coming back to the Interim Finance Committee for permission. They had complained waiting as much as 45 days for the next IFC meeting doesn't let them react quickly enough as more students sign up for classes.

Chancellor Jane Nichols described it as a "very good budget" in view of the state's fiscal woes. But she pointed out that lawmakers have made expanding the number of Nevadans taking university classes a priority for several years and the system's growth reflects the success of those programs -- especially the Millennium Scholarship program.

"This demonstrates a real commitment to higher education," she said. "It gives us an adequate level of funding to offer enough classes and ensures that, as estate taxes phase out, the state support will be there for us."

Before the committee adjourned, however, Raggio reminded everyone that the budget numbers aren't etched in stone.

"We can't guarantee anything outside of this session," he said. "In fact, we can't guarantee any of this in this session, so I wouldn't go to the bank until we make the final decision on revenues."