Sunday, August 7, 2011

Education Spending

In a recent letter to the Chancellor of Nevada System of Higher Education, Ron Knecht the HSHE Regent for District 9, seemed to ask the question: just how many lobbyists does it take to attend to the legislative affairs of the Nevada System of Higher Education. Apparently at least one more at the expense of the taxpayers. Read Regent Knecht's letter to Chancellor Klaich and decide for yourself and take any action you deem necessary.


Hon. Dan Klaich, Chancellor
Nevada System of Higher Education

Dear Dan,

I received your e-mail and attachments saying you plan to hire a chief lobbyist (NSHE Director of Government Relations), and I oppose that plan. It would be a bad idea at any time, but especially so now. Please defer the matter pending Board review.

Just a few weeks ago, the Regents and your Administration were considering closure, break-up, merger and consolidation of our access institutions, the community colleges and Nevada State College, as well as the Desert Research Institute. It was apparent in early March, when the institutions presented to the Regents contingency plans to meet the worst budget cuts we contemplated, that there was no need to further consider those options and that doing so would damage our overall mission. So, on my motion, the Board removed them from consideration. Later, bowing to unseemly political pressure from tax-and-spend legislators, the Board reversed itself, with a few dissents.

In doing so, the majority declared that NSHE’s educational missions – instruction, research and public service – are secondary to agendas of some members and their political allies to raise taxes, even though Nevada is not a low-tax state (as they falsely claim it is). They ignored the option that other parts of the state budget – parts that have grown long-term at twice the rate of our economy – could be made at last to shoulder some cuts. Instead of promoting academic excellence, intellectual rigor and achievement, and overall integrity; and instead of sticking to our educational knitting and keeping a prudent distance from the prerogatives and machinations of the Legislature, some folks thought such actions would make them political players.

As leader of the effort to save our community colleges, NSC and DRI, I was gratified that, as matters worked out (and as they would have worked out whether NSHE played those political games or not), the final budget signed by the Governor preserved our access institutions and DRI. Nonetheless, due to the spending cuts required by the state’s fiscal condition as a consequence of Nevada’s Depression, we are now closing access sites from Lovelock to Caliente and reducing faculty, programs, classes, sections, services and student access across the System. I much regret having to make such cuts, but I understand their necessity because, even with those cuts, Nevada private-sector families and businesses have still suffered more from an economic debacle caused mainly by government over-reach than have NSHE and the rest of the state’s public sector, both of which have long grown faster than our economy. So, the burden on our students, faculty, staff and communities and the pain of Nevada taxpayers opposes any spending to entangle NSHE further in politicking and to hire another bureaucrat who does not directly contribute to our educational missions.

Similarly, as leader of the successful effort to fully fund Cooperative Extension for the coming fiscal year, I am acutely aware that it faces serious funding challenges for the second year of the biennium. And yet, you propose to add a highly paid political operative – plus, of course, significant support, travel, etc. costs – to System spending.

Sixteen days ago, UNR President Marc Johnson sent out to his campus a four-page letter, including a one-page list of position reductions, discussing the cuts and burdens they face as a consequence of the hard times and the spending cuts that the hard times require. He listed 122 position cuts (67 of them involving actual employees, not vacancies), plus 70 Cooperative Extension employee reductions, many of which were subsequently delayed or rescinded. He also pointed out that students face fee and tuition increases up to 13% and perhaps more, even as programs and services are being cut, while faculty must absorb pay cuts and furloughs. Yesterday, UNLV President Neal Smatresk sent to his campus an e-mail referencing similar measures there.

While we are making real cuts throughout higher education to the professionals and staff who actually deliver the instructional, research and public-service goods, you announce a plan to fatten our contingent among the political and chattering classes. Ergo, your timing is really bad, even if the idea were a good one (which it isn’t – See infra). And although you make a point of the fact that you’re trying to economize by not making this position a Vice-Chancellor, your text suggests it’s just a matter of time until the pressure is off and we can migrate the position to that status, too (no doubt with more staff). Clearly, adding this position is an extension of the political game-playing that used our colleges and DRI as pawns in a legislative political chess match.

In a 40-year working career, half in public service and half in entrepreneurial small business, I have observed in government the continuing proliferation of such non- essential positions and of administrators in general, relative to the number of people who actually do the primary work of their agencies. These folks spend a lot of time talking to each other and crafting regulations, hoops and make-work that burden the folks doing the real work and especially burden taxpayers, our society and economy. Particularly at the margin, given the long-term accretion of such governmental affairs and administrative folks, their costs to society are high and the social benefits from their work are low and, in some cases, even negative. The main function of many of them is to get paid by taxpayer dollars to schmooze and devise new ways to raise taxes, spending and regulation and to increase their own numbers. This despite the fact that their numbers have increased relative to the numbers of worker bees and taxpayers, and their economic take has risen relative to the overall economy. That is, they consume an ever larger share of the pie, as well as causing, via taxes, an ever-increasing dead-weight loss on society – major reasons that economic growth in U.S. and Nevada is slowing and thus that human well-being is lower than it would be if this social cancer were arrested. That’s why this proposal would be a bad idea any time.

You note that you have mentioned the matter before. However, it has never been subjected to scrutiny by the Board – certainly not publicly, the statutory standard in our state. Just for starters, I question whether the proposed activities – lobbying and politicking – are fully consistent with state and federal statutes and with the terms of our many research grants and contracts with federal agencies. Even if the position is funded by state general-fund dollars, the comingling of the overhead (indirect cost recovery) dollars from those grants and contracts may raise federal income-tax issues for NSHE. I’m sure that any real thought about the proposal would raise a number of other legal issues.

Further, with the legislative session over, it is difficult to imagine there is any urgency about getting this political effort going. Therefore, I respectfully request that:

1) You immediately suspend creation, solicitations of interest and recommendations, and all other activities related to this position;

2) The Chairman of the Board, who is being copied on the e-mail transmitting this letter, agendize consideration and possible action on this matter at the Regents’ regular meeting scheduled for 8-9 September; and

3) NSHE General Counsel Bart Patterson be charged to produce a thorough and definitive opinion of counsel before that meeting concerning any legal issues raised by this proposal.

With a $165,000 minimum starting salary for the position, and including benefits, overhead, travel and support, I expect that filling this political plumb position will cost NSHE more than $300,000 annually. As you will recall, I testified orally and filed supplemental written testimony in support of NSHE’s four-point plan and against the level of cuts that had been proposed (contrary to accounts of some folks about my testimony). I further contacted legislators in support of that plan, and I was happy it passed and was signed by the Governor. I did not take these positions and expend these efforts to support the growth of the bureaucracy and politicking on the taxpayer dime. I did so for the benefit of our three educational missions; also, to promote academic excellence, intellectual rigor and achievement, and integrity in Nevada higher education; and in the belief that we would spend all our money in ways that clearly benefit the broad public interest and give the taxpayers and the students and families that pay us fees and tuition full value for their money.

Because you proposed this position, I expect you would argue that creating, funding and hiring to fill it is part of an overall mosaic that is the best way to achieve those goals, which I believe you share. I don’t buy that argument, and I doubt that many informed folks will buy it. We already send legions from throughout the System to the Legislature and to most political events. If anything, we need fewer people engaged in those activities and more people engaged in the real work of higher education.

Finally, as you will also recall, at the 17 June Board meeting, as Chairman of the Board’s Business and Finance Committee, I presented a summary comparison of the cuts by institution. As I noted at the time, it showed that Western Nevada College had sustained the deepest cuts of any institution, after adjusting for prior one-time special benefits to NSC. The excess by which WNC was cut, relative to other institutions and to NSHE as a whole, was approximately 3% of WNC’s prior general-fund spending of roughly $19-million per year – or nearly twice the $300,000 minimum this position is likely to cost. When I raised the point that WNC was shorted by the NSHE budget process, I stated that there appeared to be no good reason for that outcome, and I asked for an explanation. When no good explanation was forthcoming, I asked you and the System budget and finance staff to provide one by the next Regents meeting.

As you also know, I have been working with faculty, administration and the WNC community to buffer the effects of cuts at WNC and to raise additional money to offset some of them. In view of all the foregoing, clearly there is a much better use for the funds you propose to devote to this position – namely, to transfer them to WNC to partially fill the unwarranted gap in its budget already presented to the Board. Such a transfer would require legislative support, for which the case would be overwhelming. Please join me in making such an alternative proposal.

Very truly yours,
Ron Knecht, MS, JD & PE(CA)
Nevada System of Higher Education Regent, District 9


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