(Phillip Moyer/Nevada News Bureau) – A proposal by Regent Mark Alden for cutting the pay of university employees to deal with the education budget cuts mandated by the legislature will be discussed during the April 16 meeting of the Board of Regents.
The proposal would cut the salaries of non-classified employees — faculty, administrators, and deans — on a sliding scale based on their current salaries. The plan would cut the first $75,000 of each employee’s salary by two percent. The next $25,000 would receive a four percent cut, the next $50,000 would be subject to a six percent cut, and an eight percent cut would be placed on any income above that. According to Alden, the plan’s cuts would last for two years, then salaries would be restored.
Alden said the sliding scale should keep such pay cuts from being too damaging. For instance, an employee making $150,000 would receive a $5,500 pay cut, an amount he considers relatively minor.
“If a guy’s making $400,000 a year, and he gets his salary cut by $24,000, he won’t be a pauper,” he said.
A memo released by Nevada System of Higher Education Chancellor Dan Klaich estimates that such pay cuts would save the system $12 million. Klaich could not be reached for comment.
Regent Jack Schofield said he agreed with the idea of spreading out the cost of budget cuts, though he did not want to commit to supporting the proposal before he did more research into its effects.
“We need to make a team effort to make the 6.9 percent cut in what we’re faced with,” he said. “I think the effort should be made by the whole system.
Cutting the pay of all faculty would require the NHSE to declare a financial exigency, an action similar to filing bankruptcy. Regent Kevin Paige says such an action might have adverse affects on the educational system after the state recovers from the economic crisis.
“When the economy does come back and you start building buildings again, who’s going to want to buy bonds if you file bankruptcy?” he said. “Not that I’m saying you couldn’t do it, but the cost of capital would go up dramatically.”
Paige also said that declaring exigency now would not be timely. Nevada still has to deal with a projected $3 billion shortfall next year, making even larger education cuts likely. Such a drastic action he says, should wait until then.
“You can’t do the equivalent to bankruptcy, and then do it again. So that has to be a last resort,” he said.
Paige says he’s willing to listen to an argument for the salary cuts during the April 16 meeting, though he currently doesn’t think that course of action makes sense.
Alden said he wants to cut pay because the Board of Regents is supposed to do what is best for the education of Nevada’s citizens, not what’s best for the administrators. Cutting programs, Alden said, would hurt Nevada’s ability to educate its students.
“Preserving the programs is important. Once you cut these programs vertically, you never get them back,” Alden said. “We’ll be cutting some very significant programs, and I’m very worried about that.”
However, Alden believes that his proposal won’t gain support, saying that many members of the Board of Regents are “afraid” to make cuts to administrators’ pay.
NSHE Chairman James Dean Leavitt said he agrees that cutting programs would be harmful but thinks it’s a better option than pay cuts, which he said would have an effect on the entire educational system. When added to the system-wide furloughs that were enacted due to last year’s budget cuts, Leavitt worried that universities might have difficulty retaining their faculty if Alden’s proposition were enacted.
“You can’t just keep cutting people’s benefits and salaries and expect them to stay, and so that’s the danger of going that route,” he said.
When asked about Leavitt’s concerns, Alden responded that the resignation of faculty would be “impossible” in the current economic crisis. With hiring freezes and budget cuts taking place in publicly-funded institutions across the nation, Alden says the temporary pay cuts would not cause university employees to leave and consider facing the significant risk of unemployment.
“People aren’t going to quit. That’s just fright tactics. We’re in hard times, and if [the employees] don’t want to share some of the pain that everybody else is suffering, then let them go find a job,” he said. “I’m not concerned about that. That’s not a good enough reason.”
Alden also added that pay cuts would prevent the layoffs that the elimination of programs would require, so from that perspective it’s a better plan in terms of retaining current staff.
Most of the state’s colleges will discuss which programs they plan to cut during the April 16 meeting at the Desert Research Institute.
UNLV and UNR will describe their process for deciding which programs to cut at the meeting and will bring forward their recommendations for cuts in June.