Funding formula

There are problems with the way tuition money from Nevada's state colleges and universities is divvied up.

As it stands, money raised through tuition is essentially subtracted from each institution's state subsidy. That creates no incentive to improve the quality of programs, since any investment designed to allow an institution to charge higher tuitions does little good: higher tuitions produce no net gain.

In fact, the current formula -- which distributes money based on enrollment -- doesn't even provide an incentive to produce graduates, since warm bodies who will never graduate get funded "per chair" the same as the most promising research assistants.

"The old formula is clearly no longer sustainable," says UNLV President Neal Smatresk, who complains UNLV gets shortchanged because it takes in far more out-of-state tuition than any other Nevada institution but does not get to keep that money. He estimates the university loses $12 million to $17 million each year.

The three Southern Nevada institutions also complain that -- while Clark County is home to more than two-thirds of the state's population and generates more than two-thirds of its general fund revenue -- just half the state money spent on higher ed is allocated to UNLV, Nevada State College and the College of Southern Nevada.

Last week, higher education Chancellor Dan Klaich told regents he wants to fix the funding formula. Mr. Klaich's plan would base allocation on a few criteria: the cost of each credit hour at a particular institution; research missions for universities; the size of the institution; and performance -- generally measured by the number of graduates.

None of the details has been hammered out, but Mr. Klaich says a key part of the plan would be to allow the colleges and universities to keep the tuition generated on campus. And that would be a step in the right direction.