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February 12, 2010 4:26 PM Nevada’s Higher Education Crisis

By Daniel Luzer

Carson_City_NV.jpg

As the College Guide has pointed out before, Nevada higher education is kinda of screwed. The state now has a budget gap of 20 percent and the state university system needs to cut about $110 million in order to operate next year.

This makes it incredibly difficult for Nevada Higher Education Chancellor Dan Klaich to do his job effectively. He doesn’t think he’s getting enough support. Well on Monday this week Klaich fired back, with a memo displaying a level of candor and fury rarely seen in official communications:

Since too many of our elected leaders seem to be so focused on the bottom line, allow me to summarize… Nevada public higher education will no longer be competitive with any state in the U.S., let alone the Western states. Our main competition for students, faculty, and businesses needed to diversify our economy will be with Third World countries.[Italics original.]
If you want to continue to live in a state that consistently ranks in the bottom of every education and quality of life measure, then by all means, sit back and watch your state burn.

The trouble is the taxes. Due to reduced property and sales tax revenue last year Nevada government is short on cash, very short on cash. But, like Monaco, the Isle of Man, the United Arab Emirates, and other places with no real industry, Nevada doesn’t have a personal or corporate income tax. Nevada Governor Jim Gibbons has vowed not to change that. According to Klaich, this is wrong:

If we raised our sales tax by one quarter of one percent we would raise about $88 million. For the average Nevadan earning $50,000 and spending 10 percent of his or her earnings on taxable sales… the additional taxes would amount to $12.50 PER YEAR! That is a couple of Happy Meals or a lunch for two at Panda Express once a year.
If we raised the upper rate on the modified business tax from 1.17 to 1.27 percent… we would raise about $24 million in additional revenues. A business with a payroll of $1 million would pay additional taxes of $750 per year or a little more than $2 per day. If that is the margin of a profit in a business that size, then it has much greater problems than Nevada’s tax structure.

Nevada is confronting a huge higher education funding gap. This is not a matter of laying off a few professors or even eliminating academic majors. If Nevada can’t find a way to cut higher education costs by closing schools it’s going to have to raise tuition across the system by 48 percent. According to Klaich, this is an emergency: raise taxes.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

Comments

  • kidcharles on February 12, 2010 6:06 PM:

    Good for Klaich. Usually these bureaucrats do nothing but raise tuition and never question the ever dwindling public financial support of state schools. More of this please!

  • Anonymous on November 20, 2012 11:55 AM:

    I like this.