Nevada System of Higher Education asks Legislature to phase in new funding formula, fund COLA shortfall and nursing expansion

Nevada System of Higher Education leaders told the Legislative Commission's budget subcommittee that a multi-year, carefully phased approach is needed to implement changes recommended by the NSHE funding-formula study and that additional state support is required to make previously authorized cost-of-living adjustments permanent for system employees.

"We recommend a balanced approach'that allocates state funds not only on weighted student credit hours but also on student attributes and outcomes," Chancellor Patricia Charlton said, summarizing the funding-study committee's work to better align per-student allocations with institutional missions. The study's external consultant and the committee proposed a model that distributes 75 percent of a formula allocation by weighted student credit hours (WSCH), 10 percent by student attributes (for example low-income or part-time status) and 15 percent by performance outcomes.

What the change would do

NSHE officials said the new approach would redirect more funds to Nevada State University and the community colleges (institutions that serve more part-time and low-income students) while preserving key set-asides: a small-institution factor for Great Basin and Western Nevada College and an O&M carve-out for research facilities at UNR and UNLV.

Because the result of a direct reallocation would have reduced university operating budgets by about $20'$22 million, the governor's recommended budget proposes phasing in the formula: roughly 20 percent of the calculated redistribution in Year 1 and 40 percent in Year 2, with the system asking for roughly $12.9 million for the biennium to support that partial shift.

Cost-of-living adjustments and student fees

NSHE also asked the legislature to fund the system's ongoing portion of the cost-of-living adjustments (COLAs) that the 2023 legislature authorized. Chancellor Charlton and Chief Financial Officer Chris Vittone explained how the regents covered part of the fiscal-year 2025 COLA through a mix of timing (delaying a portion of implementation), a 5 percent student fee increase and campus budget adjustments. The governor's recommended budget includes amounts to replace the portion campus budgets covered, which NSHE says is needed to avoid continued position freezes and to preserve recruitment and retention gains.

One-shot and targeted requests

The governor's recommendation included smaller one-shot appropriations that NSHE supports: $11 million in one-time funds for campus safety and security upgrades (NSHE noted the December 2023 UNLV campus shooting as a driver of urgency) and $10 million per year to continue nursing expansion funds begun in the prior biennium.

Questions from the committee and next steps

Legislators pressed for more detail on how the formula's outputs would translate to per-FTE funding and how student fees and other local revenues fit into the adequacy calculations. The chancellor said the funding-study committee recommended an adequacy study to determine the funding necessary to fulfill NSHE's mission and requested that study begin immediately; the RFP was underway and NSHE expects a spring 2025 completion. Chief Financial Officer Vittone said the new formula and small-institution factor were calculated using the Higher Education Price Index to bring the small-institution per-credit factor from $30 to $40 and to apply inflation going forward.

Public comment earlier in the hearing reinforced the priority NSHE stakeholders placed on preserving COLAs and campus safety; faculty and student leaders asked the legislature to restore full COLAs, increase campus safety and continue nursing expansions so institutions can retain staff without raising fees further.

Ending note

NSHE told the committee it will return with more granular numbers as the Economic Forum and fiscal-year closing numbers are finalized and as the adequacy study produces an evidence-based funding target. Legislators asked for that detail early in session to evaluate how partial phasing of the formula and the COLA replacement request fit into statewide budget constraints.