EDITORIAL: UNLV’s budget cuts preceded by massive spending hikes
Significant government spending increases today often lead to budget problems tomorrow. Just look at UNLV.
Late last month, UNLV announced a two-month hiring freeze and 25 percent reductions in operating budgets. It made the moves in response to a $9.6 million budget shortfall this fiscal year. The budget adjustments will affect things such as maintenance, supplies and groundskeeping. Reducing maintenance spending often leads to costlier repairs in the future.
On the surface, spending cuts are the result of a lack of money. But dig a little deeper and you’ll see these cuts came about because the higher education system had an unusual bounty of resources.
UNLV received $68 million from the American Rescue Plan. In 2020, the school received $11.8 million from the CARES Act. It even got $5 million from the feds to plant 3,000 trees in the Las Vegas area. Last year, the Legislature also showered money on the Nevada System of Higher Education as part of its record-setting spending spree.
But the federal largess from COVID legislation was never meant to be permanent. State appropriations can change every two years. But this didn’t keep the Board of Regents, which governs Nevada higher education, from approving a 12 percent cost-of-living adjustment for employees last summer. At the time, the board’s number crunchers warned the spending would have a significant fiscal impact. But regents prioritized the move’s “impact on morale,” as meeting documents described it.
That created a shortfall of around $30 million across all colleges and universities. UNLV had the largest chunk of that, a $13.5 million hole.
The resulting fiscal problems didn’t stop UNLV President Keith Whitfield from defending the lavish pay hikes. “I was a staunch advocate for the full 12 percent COLA increase from the beginning of this discussion, and I firmly believe this was the right decision for our university,” he wrote in a letter to UNLV staff.
Nor did the spending spree end there. Last December, regents approved a 11 percent pay hike for employees for fiscal 2025, which started this month. It also raised student registration fees and tuition for nonresidents and distance learning by 5 percent.
It wasn’t enough to balance the books at UNLV. A temporary hiring freeze is unlikely to fix the hole caused by permanent pay increases. But it will allow UNLV and other institutions to cry poverty at the Legislature next year. Expect to hear much bellowing about how more money is needed to stave off devastating spending cuts.
Don’t buy it. More funding won’t balance the books when there’s no restraints on new spending. As UNLV officials are discovering, directing temporary financial windfalls into baseline budgets is a recipe for fiscal disaster.