Inside the numbers

"Lies, damned lies and statistics," was the rejoinder by University of Nevada, Las Vegas President Neal Smastrek on KUNV-FM when confronted with unflattering data regarding UNLV spotlighted in a recent study by researchers from the University of Arkansas Department of Education Reform.

The report, titled "Administrative Bloat at American Universities: The Real Reason for High Costs in Higher Education" found that between 1993 and 2007 UNLV increased its contingent of administrators and bureaucratic personnel per 100 students by 90 percent, while cutting the number of instructors by 6.6 percent.

Growing administrative bloat and misplaced priorities is a nationwide trend. "Universities employ more people and spend more money to educate each student even as those universities increase their enrollment," write the authors, led by University of Arkansas Department of Education Reform Chairman Jay P. Greene.

But the misspending of scarce resources on administrative bloat isn't the only problem. New spending priorities, like transportation and health care, now threaten revenues dedicated to education.

According to the National Association of State Budget Officers, higher education spending as a percentage of state budgets is stagnant or falling nationwide. In Nevada, Medicaid has already become the second biggest expenditure item in the state's budget (12.1 percent) and will likely continue to grow thanks to the passage of ObamaCare earlier this year. Higher education places third (10.1 percent).

Given the recession, universities across the nation face declining revenues. However, claims by Nevada higher education of 30 to 50 percent budget cuts overstate the magnitude of the economies. Indeed, this is where Mark Twain's phrase of "lies, damned lies and statistics" is more appropriate.

One way to mislead the public is to cite general-fund appropriations while ignoring other sources of revenue — including tuition, fees and federal funds (such as the American Recovery and Reinvestment Act). Or to calculate from a baseline budget which includes imaginary spending increases never actually realized. Or to add up multiple years of cuts as a percentage of one budgetary year.

In a public meeting earlier this month, Smastrek rolled all three techniques into one calculation. He claimed UNLV lost "$50 million and about 27 percent of [the] budget since 2007." However, the "$50 million" and "27 percent" figures were generated, UNLV acknowledged when asked, by adding up multiple years of budget cuts and then taking that as a percentage of the state general-fund appropriations of just one year (2007).

Isn't this like rolling three years of personal deductions into one on your income tax return and then seeking to apply them against one year's salary? Wouldn't that kind of math get the IRS coming come down on you with interest and penalty charges? 

University Regent Ron Knecht argues that public officials in higher education and elsewhere need to be more candid with their numbers. "If we aren't accurate, if we over-claim, or if we inflate the magnitude of actual cuts by referencing past ‘budget' numbers instead of actual expenditures, as some have been known to do," he said, "then our claims will be debunked and we will lose credibility."

Moreover, given the public-record, available-upon-request status of budget information, loss of credibility from such antics is assured.

According to figures from the Nevada Legislative Counsel Bureau, less FY09 and special-session budget cuts, the state's university system saw an inflation-adjusted expenditure decline of 10.2 percent following the 07-09 biennium. UNR's legislatively approved expenditures declined 11.9 percent, while UNLV's declined 7.1 percent.

These budget cuts are much smaller than often advertised. They are smaller still in proportion, considering the record-high appropriations they were made against. Between 1993 and 2007, UNLV's inflation-adjusted spending increased 140 percent while spending at UNR increased 69 percent. Additionally, figures from the National Association of State Budget Officers show another 31 percent increase in higher-ed spending between 2007 and 2008.

After decades of increasing revenue, Nevada's universities are facing a tougher time than they're used to. But this new reality doesn't justify them overstating the magnitude of the budget cuts. Nor does it automatically entitle them to other Nevadans' hard-earned money.

With abundant information and new technologies available, and in the midst of a severe and ongoing recession, Nevada's universities can no longer conduct business as usual. They must learn to live within their means and address the administrative bloat, the mission creep and the luxurious student amenities that have created unsustainably large budgets.

This means streamlining their budgets and focusing the attention back on their primary mission: education and research — not simply jobs for adults or resort-style living for students.

Patrick R. Gibbons is an education policy analyst at the Nevada Policy Research Institute. For more information visit http://npri.org/.