February 2, 2010

Greetings!

Chancellor Dan Klaich addressed the Board of Regents today on how dire the upcoming budget cuts are likely to be. After the economic forum met in January this year, it became apparent that for the state to balance its budget with a potential shortfall for FY10 and FY11, the budget cuts would be significantly higher than originally thought. Under the direction of the Chancellor, the NSHE presidents built plans for up to a 22 percent reduction in state funds for both of these fiscal years. This reduction would be in addition to a more than $2.1 million or a 21 percent reduction in state funding that DRI has already taken over the past two years. While we have continued to protect our core operations, for DRI, the $2.1 million reduction has translated to a loss of critical state funding for components of our operations and maintenance, the entire state weather modification program, several key administrative and other staff positions, reduced state funded operating dollars, and rental space at our research facility on the Sierra Nevada College campus at Lake Tahoe. If the 22 percent reduction holds as the final reduction level, DRI stands to lose a significant amount of the gains we've made over the past decade.

Chancellor Klaich said that the magnitude of such potential cuts would be unlike anything higher education in Nevada has ever faced. These reductions would roll back higher education funding to 2002 levels, when the system had 20,843 fewer students. He also presented various scenarios to illustrate the profound magnitude of a 22 percent reduction on Nevada's system of higher education. Those included the closure of various combinations of campuses and associated institutional schools/programs, including DRI. In another illustrative scenario, to address the $110 million NSHE shortfall, Chancellor Klaich said that this reduction would also equate to a 50 percent tuition hike on top of the 39 percent that the students have already incurred during the past five years. In yet another possible scenario, he indicated that any significant level of pay reductions, furloughs and layoffs could require the Board of Regents to declare financial exigency. While emphasizing he wasn't actually advocating such drastic action, he used the scenarios to demonstrate the drastic impact of the cuts.

According to Chancellor Klaich, a consequence of this level of budget reduction would result in access being denied to students, the quality and integrity of the faculty being impacted, and threats to externally funded research and its infrastructure. The latter would directly impact not only the research dollars that flow into our state economy but the missions of our research institutions. In the end he said that Nevada could well be faced with some of the worst higher education funding in the country, a powerful disincentive to any company wanting to relocate to Nevada.

While I am holding out hope that our elected officials will realize the gravity of such a level of reduction to NSHE's funding and work creatively to soften a certain reduction, we at DRI have been working diligently to address this potential cut to our state support while doing all we can to protect our core mission and functions. This process, however, becomes increasingly challenging with an ever-increasing deficit in our state budget. Several more important steps will take place before we will know how these potential budget reductions will affect DRI. The Governor will address the state on Monday, February 8 when it is almost certain that he will call for a special session. That special session of the legislature will guide the actions that the Board of Regents will take at their March meeting or at any special Board meetings that they might convene.

As I gain more information and actions are taken at the State and Regent level, I will communicate with you on how we are addressing the upcoming reductions as well as give you an opportunity to voice your concerns and comments.

Dr. Stephen Wells
DRI