Nevada officials have called on state agencies to reduce their current fiscal-year budgets and plan for reductions in the upcoming biennium in response to the pandemic-driven downturn of the state economy.
This month, the governor’s finance office asked agencies to plan to reduce their budgets by 12% for fiscal years 2022 and 2023. Each fiscal year, that represents roughly $32 million of UNLV’s $268.7 million state allocation. State officials could adjust the reduction amount with changing economic forecasts.
The request came just months after the Nevada Legislature cut 19.7% from the current fiscal year allocation to address the sharp drop in state revenues. For UNLV, that amounted to a $50.5 million reduction to its $257 million fiscal year 2021 state allocation.
Though daunting, UNLV officials say the university is well-positioned to deal with the challenge, keeping its mission and core values at the forefront of an innovative and strategic approach to budget and resource planning.
“We are projecting more fiscal challenges in the next few years,” said Jean Vock, senior vice president of Business Affairs and chief financial officer. “But I want to emphasize that UNLV has a strong financial position and is not in an immediate crisis. We have the benefit of time to prepare, to be creative, and to be flexible.”
UNLV met the initial round of cuts over the summer by leveraging one-time funds from the federal CARES Act and NSHE investment pool earnings. The university instituted a hiring freeze and operating budget cuts that deans and vice presidents identified. UNLV implemented a temporary per-credit-hour surcharge for the 2020-21 academic year ($6 for undergraduate students, $8 for graduate students). The state cuts require six furlough days for state employees between Jan. 1 and June 30, 2021.
Anticipating ongoing financial uncertainty, university finance officials in October convened a budget and resource planning forum with more than 100 institution leaders, including deans, directors, and budget officers.
The forum was designed to generate ideas for finding or creating efficiencies and for generating revenue, while keeping UNLV’s core values and the long-term horizon in sight. Led by Vock and Executive Vice President and Provost Chris Heavey, the Resources Oversight Committee will evaluate ideas proposed during the forum.
“The forum was an open, great sharing of ideas, and nothing was off the table,” said forum participant Rondel Frank, assistant dean of finance and administration in the School of Dental Medicine. He added that UNLV is using its greatest strength to confront the budget challenge.
“We are using the intelligent individuals that we have right here at UNLV to find, plan, and understand the approach needed for us to make it through this hardship,” he said.
Working in interdisciplinary groups, forum participants generated 753 ideas, with 416 revenue and 337 efficiency ideas.
Revenue-generating ideas included developing or increasing community and corporate partnerships, sponsored programs and grants, and enrollment.
“Having survived the devastating effects of the Great Recession, the institution is now applying its lessons learned, very intentionally, to the pandemic,” said Brandy Smith, executive director of finance and administration in the Academic Success Center. “Identifying new, sustainable revenue sources will be important, making us less reliant upon state funding for this and future declines. Corporate partnerships have proven to be beneficial for revenue generation, but we could take this a step further and identify industry partnerships.”
Smith, who participated in the forum, noted the success so far of the MGM College Opportunity Program, which is boosting UNLV enrollment among MGM employees. “We have a model that can potentially be applied across the hotel industry, and expand into other industries, such as airlines and retail.”
Ideas for efficiency included implementing or conducting automation and workflow, shared or centralized services, and space utilization studies to reconceptualize how and where employees work. Participants also proposed ideas related to how the university could take advantage of economies of scale.
“We saw how that worked well with purchasing masks and cleaning supplies for the campus (to operate during the pandemic),” Smith said. “The cost savings from one large order of supplies, as opposed to many small orders, can really add up over the long term.”