Joint subcommittee approves NSHE closing actions, declines new funding formula this biennium

Senator Marilyn Dondero Loop, chair of the joint subcommittee on K‑12, Higher Education and Capital Improvements, presided as the panel voted through closing recommendations for the Nevada System of Higher Education on May 20, 2025, approving budget and policy items—including small institution funding changes, research O&M allocations, and several technical adjustments—while rejecting full implementation of a proposed new funding‑formula distribution methodology for the 2025–27 biennium.

The decision matters because the proposal would have redistributed existing general fund appropriations across NSHE's seven instructional institutions. Fiscal staff told the committee the governor's recommended distribution would shift funds away from the state's two R1 research universities (UNR and UNLV) toward Nevada State University and the community colleges, and that hold‑harmless or one‑time appropriations would be required to limit immediate cuts to UNR and UNLV.

Fiscal analyst Jay Marie Mangoba (Fiscal Analysis Division) led the staff presentation and walked the subcommittee through the packet, describing five major closing issues covering credit‑hour caseload adjustments, an adjustment to the weighted student credit‑hour value, small‑institution funding, research space O&M, and the proposed new distribution methodology. Mangoba summarized the governor's recommendations and noted technical adjustments where NSHE documentation or subsequent governor's office amendments required corrections.

On the funding formula, several legislators said they were reluctant to implement the new distribution this biennium. Senator Cannizzaro told the committee: "I am still of the opinion that it would be more prudent for this body to, go with, I believe it is option 1, and not approve the new funding formula and allow us some time to revisit that and come back with something that actually makes a little bit more sense and is workable in future biennias." Speaker Yeager added, "I just wanted to say I concur with my, colleagues' comments... the bottom line on that proposal is it's going to require additional funding. And we don't have to state that we're not in a place right now where we can put forth additional funding."

Following those remarks the subcommittee voted to approve option 1: budget using the traditional base maintenance and enhancement methodology and not implement the new funding‑formula distribution methodology (decision 1 in the packet). The motion carried.

Other approved items include: - WICHE (Western Interstate Commission for Higher Education) professional student exchange and health professional education slots: the subcommittee approved the governor's recommended general fund appropriation of $2,100,000 (total across accounts described in the packet) and related fee and loan‑repayment revenue authority to support WICHE programs and reissue a letter of intent allowing WICHE to reallocate student slots and balance forward certain fee revenues. - WICHE administration budget: fiscal staff recommended closing the account as the governor proposed; the subcommittee approved that recommendation. - Weighted student credit hour caseload adjustment: the committee approved additional general fund appropriations of $22,800,000 in each year of the 2025–27 biennium to reflect systemwide growth in weighted student credit hours, with technical corrections for Nevada State University (NSU) and Western Nevada College (WNC) as noted by fiscal staff. - Decision unit M204 (increase in weighted student credit‑hour value): the governor had proposed an increase funded at $4,700,000 per year; subsequent governor's amendments proposed removing that decision unit and funding the change with one‑time appropriations. The subcommittee approved the staff recommendation to adopt the governor's amendments eliminating M204 (as amended by the governor). The motion carried. - Small‑institution factor: the governor recommended enhancements to the small‑institution factor (raising the threshold from 100,000 to 125,000 weighted student credit hours and increasing the per‑credit value). The subcommittee approved the governor's phased approach at $1,400,000 over the biennium (phase‑in at 20% in FY26 and 40% in FY27) rather than a larger phased approach proposed in later amendments. - Research space O&M funding: the committee approved $11,200,000 in each year for dedicated research‑space operations and maintenance for UNR and UNLV, and approved a technical reduction for newly identified UNR space—approving $1,000,000 in each year (reduced from the governor's original request based on NSHE supporting documentation). - Elimination of the performance funding pool set‑aside: the subcommittee approved removing the 20% performance funding set‑aside; the ad hoc committee had recommended instead using outcomes within a future allocation methodology. - Decision unit E685 (reallocation for COLA/salary funding): the governor originally recommended $28,700,000 in each year to address cost‑of‑living salary increases; the governor's office submitted amendments eliminating E685 and indicating intent to pursue one‑time general fund appropriations. The subcommittee approved the recommended budget amendments removing E685 and will consider one‑time funding through separate legislation or amendments. - Student‑derived non‑general fund revenue authority: the committee approved continuation of existing authorizations and reporting requirements that allow NSHE institutions to increase nonresident tuition, registration fees and miscellaneous student fees without interim finance committee approval but require biannual reporting to the Interim Finance Committee; staff recommended retaining language adopted in earlier authorizations acts. - Compensation and position technical adjustments: the subcommittee authorized fiscal staff to make technical adjustments for generic personal‑cost line items and manual salary/grade overrides (reductions of approximately $1.1 million in FY26 and $881,707 in FY27 to correct M300 fringe calculations) and reissued a letter of intent directing NSHE to report new positions, eliminated positions and vacancies compared to the 2023 legislature's budget.

Public comment was limited. Patty Charlton, Chancellor of the Nevada System of Higher Education, thanked the committee "for the time today and the difficult decisions" and said NSHE looks forward to continuing work with the Legislature. Doug Unger, UNLV chapter president of the Nevada Faculty Alliance, urged attention to campus safety and thanked members for their consideration.

The subcommittee approved the remaining technical closing items and directed fiscal staff to make additional technical adjustments as necessary before final appropriation language is prepared. Chair Dondero Loop adjourned the meeting after the public‑comment period.

Votes at a glance (formal motions recorded in the transcript): - Approve WICHE loans and stipends funding and letter of intent — motion moved; seconded; outcome: approved (voice vote). - Close WICHE administration account as recommended — motion moved; seconded; outcome: approved (voice vote). - Approve systemwide weighted student credit‑hour caseload adjustment (additional $22,800,000 per year) with technical corrections — motion moved; seconded; outcome: approved (voice vote). - Approve elimination of decision unit M204 (as amended by governor) — motion moved; seconded; outcome: approved (voice vote). - Approve elimination of small‑institution funding for WNC and approve $649,110 per year for Great Basin College under current policy — motion moved; seconded; outcome: approved (voice vote). - Approve enhanced small‑institution factor phase‑in at $1,400,000 over biennium (20% FY26, 40% FY27) — motion moved; seconded; outcome: approved (voice vote). - Approve research space O&M funding for UNR/UNLV ($11,200,000 per year) — motion moved; seconded; outcome: approved (voice vote). - Approve technical adjustment reducing UNR additional research space O&M to $1,000,000 per year — motion moved; seconded; outcome: approved (voice vote). - Approve elimination of the performance funding pool set‑aside (20%) — motion moved; seconded; outcome: approved (voice vote). - Approve elimination of decision unit E685 (as amended by governor) — motion moved; seconded; outcome: approved (voice vote). - Approve Option 1 (budget using base maintenance and enhancement; do not implement new funding formula E146) — motion moved by Assembly member Backus; seconded by Senator Cannizzaro; outcome: approved (voice vote). - Approve student‑derived revenue authorities and reporting requirements per current policy — motion moved; seconded; outcome: approved (voice vote). - Approve technical adjustments to personnel/fringe M300 and authority for fiscal staff to make technical corrections; reissue letter of intent regarding positions — motion moved; seconded; outcome: approved (voice vote). - Approve remaining nine other closing items and related technical adjustments — motion moved; seconded; outcome: approved (voice vote).

The committee recorded no roll‑call tallies in the transcript; votes were taken by voice and each motion was announced as passing by the chair.

Ending: The subcommittee completed its NSHE closing packet and adjourned; Chair Dondero Loop noted a short Senate Finance meeting would follow in Room 2135.