NSHE says historic COLAs created recurring shortfall; asks state for recurring support

Nevada System of Higher Education officials told the joint subcommittee that the substantial cost‑of‑living adjustments (COLAs) enacted in the prior session left the system with a recurring funding gap and asked the Legislature to provide recurring general fund support to reduce that shortfall.

CFO Chris Fatone and Chancellor Patty Charlton said the system’s annual operating budget totals about $2.4 billion and that compensation and benefits are the largest expense (about 65% of total). Fatone said the total annual portion of the COLA not covered by existing revenues amounts to an estimated $46.5 million; the system requested roughly $28.7 million per year in the governor’s recommended budget, leaving campuses to absorb the remaining roughly $17.8 million per year.

“Those cost‑of‑living adjustments were unprecedented,” Charlton said, thanking the Legislature for prior support but noting the system had to defer a COLA implementation for three months in FY25 and the Board of Regents approved a 5% registration fee increase to help offset costs.

Fatone explained the technical issue that generated the M204 maintenance request: the prior caseload/weighted credit‑hour calculations did not fully capture separately appropriated salary adjustment funds when deriving the per‑weighted‑credit‑hour value. That led to an ask to adjust the weighted‑student‑credit‑hour value; the governor amended that item to a one‑time (nonrecurring) allocation during negotiations, although NSHE said it prefers recurring treatment.

NSHE said it had taken mitigation steps — delaying part of the COLA and using a fee increase the Board approved — but that campuses still had to make budget adjustments, including delaying or freezing some hires. Faculty and staff testifiers told the subcommittee that vacant searches have been frozen and that classroom staffing has been affected at some campuses.

Why it matters: Without additional recurring funding, NSHE said campuses would need to absorb remaining salary costs through reductions to other campus budgets, potentially affecting hiring, course offerings and student services.

What the subcommittee heard: Representatives of the Nevada Faculty Alliance urged lawmakers to fund the system’s request so institutions could restore positions and avoid higher student fees. NSHE leaders said the system is not seeking a change in fee policy; rather, the request would cover the recurring cost share of the authorized COLAs.

Next steps: NSHE asked the subcommittee to consider recurring general fund support to cover the salary shortfall and to work with the chancellor’s office on technical adjustments to caseload and weighted‑credit‑hour calculations.