MINUTES OF THE JOINT SUBCOMMITTEE MEETING OF SENATE COMMITTEE ON FINANCE AND ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session May 23, 1995 The joint subcommittee meeting on Capital Improvements/Higher Education of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman William J. Raggio, at 5:45 p.m., on Tuesday, May 23, 1995, in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. SENATE COMMITTEE MEMBERS PRESENT: Senator William J. Raggio, Chairman Senator Bob Coffin Senator Dean A. Rhoads ASSEMBLY COMMITTEE MEMBERS PRESENT: Mr. Morse Arberry, Jr., Chairman Mr. John W. Marvel, Chairman Mrs. Vonne Chowning Mr. Joseph E. Dini, Jr. Mr. Thomas A. Fettic Mr. Lynn Hettrick STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Mark Stevens, Fiscal Analyst Judy Jacobs, Committee Secretary OTHERS PRESENT: Dr. Tom Anderes, Vice Chancellor, Finance and Administration, University and Community College System of Nevada Dr. Robert B. Daugherty, Dean, School of Medicine, University and Community College System of Nevada Dr. Richard S. Jarvis, Chancellor, University and Community College System of Nevada Dr. Joseph Crowley, President, University of Nevada, Reno, University and Community College System of Nevada Don Hataway, Chief Assistant Budget Administrator, Administrative Services Division, Department of Administration Dr. Tony Calabro, President, Western Nevada Community College, University and Community College System of Nevada Senator Raggio called attention to the corrections to potential closing actions as portrayed on Exhibit C. Mark Stevens, Fiscal Analyst, noted adjustments were made to items in which sums were omitted from the closing action proposals. The first, he said, involves a reduction of retirement adjustments in the M-300 category with the addition of approximately $7,000 in the first year of the biennium and $9,000 in the second year of the biennium. Each budget account required some type of adjustment, he said. Mr. Stevens indicated adjustments were made to two or three investment income accounts in which figures were re-projected by the university system and compared to agency requests. He stated approximately $50,000 will be added to University of Nevada, Las Vegas (UNLV) investment income which will be used to offset appropriations from the General Fund. Senator Raggio requested comments on the adjustments. Dr. Tom Anderes, Vice Chancellor, Finance and Administration, University and Community College System of Nevada (UCCSN), signaled his approval of the adjustments. Senator Raggio stated a motion to amend previous actions in Exhibit D by the adjustments would be in order. He pointed out the actions taken previously on items on the first half of page 2 of Exhibit D ended at the line stating "GENERAL FUND IMPACT - BEFORE REQUESTS FOR ADDITIONAL FUNDS." MR. MARVEL MOVED TO RESCIND THE PREVIOUS ACTION. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * MR. MARVEL MOVED TO APPROVE THE POTENTIAL CLOSING ACTION WITH ADJUSTMENTS RECOMMENDED BY STAFF AS NOTED. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * To clarify the action, Senator Raggio reiterated the committee approved all the items indicated under "General Fund Impact - Potential Closing Actions" through "GENERAL FUND IMPACT - BEFORE REQUESTS FOR ADDITIONAL FUNDS" set forth in Exhibit C, page 2. The committee confirmed his understanding. Medical School - Residents Medical School - Salary Savings Senator Raggio invited Dr. Robert B. Daugherty, Dean, School of Medicine, University and Community College System of Nevada, to come forward. Referring to previous discussions on the matter, Senator Raggio indicated action will be deferred on the issue raised during the previous meeting regarding the request for additional funding for the residency program in view of new proposals for Managed Care/Medicaid funding. He stated other issues must first be resolved regarding Medicaid budgets. Neither Dr. Daugherty nor the committee voiced any concern over the delay. Senator Raggio noted a request was made for $224,416 for the medical school residents in each year, and for $134,622 each year for salary savings. Dr. Daugherty commented the residents have been in the program for a number of years in family practice. He said there are 24 residents in the program, but due to changes in codes indicated earlier he fears the program will be underfunded by $224,416. He explained if salary savings are used to pay for the residents it will be only for one time, whereas the residents are in a 3-year program, thus preventing the school from making any commitment to those residents. MR. MARVEL MOVED TO APPROVE THE $224,416 APPROPRIATION FOR EACH YEAR FOR THE MEDICAL SCHOOL RESIDENTS. MR. FETTIC SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * MR. MARVEL MOVED TO DENY THE REQUEST FOR SALARY SAVINGS. SENATOR RHOADS SECONDED THE MOTION. Senator Raggio stated the committee understands there was some error from the medical school's perspective. THE MOTION CARRIED UNANIMOUSLY. * * * * * Calling attention to the items at the bottom of Exhibit C, page 2, Senator Raggio offered the opinion those items are moot in view of the action taken with reference to the enrollments at Truckee Meadows Community College (TMCC) and Northern Nevada Community College (NNCC). Senator Raggio said there is an option to be considered by the committee that the present merit pool funding is at 2 percent, while the Executive Budget recommended an increase of merit pool funding at 2.5 percent. He pointed out the funding is set forth on the proposed closing action sheet. He noted the committee has concerns regarding the overall budget, and favors all potential action that will relieve the final budget from any deficit. Dr. Richard S. Jarvis, Chancellor, University and Community College System of Nevada, voiced support for retaining the 2 percent increase. He said to lose it would deal a serious blow to staff morale since staff has not had merit pool increases in a number of years. Dr. Joseph Crowley, President, University of Nevada, Reno (UNR), University and Community College System of Nevada, offered hope the increase will be the culmination of a long struggle, perhaps more than 10 years. He asserted there has been a historical inequity that was addressed successfully with the Governor in 1985, which included a merit pool in the budget that put the UCCSN into a situation closer to equity with other public employees, not only classified employees, but also education employees in grades kindergarten through grade 12. Dr. Crowley said, although the other state employees had step programs and longevity programs, the UCCSN employees had neither, only the cost of living adjustments (COLAs). He acknowledged the teaching faculty received a 2.5 percent merit adjustment in 1985, but other faculty did not. According to Dr. Crowley, the 1989 budget added another 2.5 percent for all faculty with the exception of deans, vice presidents and presidents. After that session, he explained, the increase was removed. He declared since then the system has worked to restore that raise. If there is a disposition to remove the .5 percent, he said, after several years without COLAs, those in administration will be greatly disappointed. Mr. Marvel inquired what criteria is used to mete out merit pay. Dr. Crowley responded the two universities have an elaborate merit system. He explained UNR has four ranges of merit which are adjusted as salary levels change due to action of the Legislature by way of cost of living increases. He said the highest level is reserved for the rarest of cases, while the lowest level receives the bulk of the increases. He noted UNR has a long record of awarding different merit increases to faculty based upon performance, as has UNLV. Dr. Crowley recalled a 1991 interim committee made an extensive study of the issue and made an agreement to allow community colleges to use the 2 percent increase in different ways. Mr. Marvel asked if classroom teaching is considered as one of the criteria. Dr. Crowley confirmed the query and said teaching, research and public service are the three essential criteria for consideration for merit raises. Senator Raggio asked what level of instructional personnel will be funded by the 2.5 percent increase in the Executive Budget. Don Hataway, Chief Assistant Budget Administrator, Administrative Services Division, Department of Administration, responded it applies to the same people to whom the 2 percent applies, which does not include deans or vice presidents. Dr. Tony Calabro, President, Western Nevada Community College (WNCC), University and Community College System of Nevada, endorsed the 2.5 percent merit increase. He explained the merit system he utilizes is elaborate and involves evaluations by students, peers and supervisors. If they do not meet the standard, they do not receive the merit increase, he said. Dr. Calabro declared during the period of time cited by Dr. Crowley, instructors at WNCC have been held to stricter measures of accountability than previously, not only in terms of accountability within the institution, but also in terms of accreditation, demands by the community, public service, and use of new teaching methods and technology. He offered the opinion those were, at one time, part of the plan for compensating employees, and should be maintained as a priority. MR. DINI MOVED TO APPROVE CLOSURE OF THE BUDGET ACCORDING TO THE GOVERNOR'S RECOMMENDATION WITH A 2.5 PERCENT MERIT INCREASE. MR. MARVEL SECONDED THE MOTION. Senator Coffin disclosed his wife works for the university system. However, he declared, he has learned that selection or eligibility for merit pay is not a decision made by the Legislature. He said he does not feel there is a conflict of interest and voiced his intention to vote on the matter. THE MOTION CARRIED UNANIMOUSLY. * * * * * Mr. Hataway commented the Budget Division has attempted to fine- tune enrollments during each legislative session. Calling attention to the bottom of page 2, Exhibit C, he said: If I understand these two last lines, it would ... continue the funding at the Governor's rec [recommendation] for enrollment. If that's the case, we would not support that. In other words, we supported the way you closed the budget so far with adjusting the enrollment to [be] more realistic. Senator Raggio pointed out he already noted "those were moot." Mr. Hataway acknowledged he had missed that statement. Senator Raggio said he had indicated those two items will not be considered in view of other actions. Senator Raggio announced he had been requested to defer any further action on requests for Distance Education/Network. He declared that does not mean the matter will not be considered, but it will be deferred until further budget closings in order to determine the status of the budget. In the absence of further business, Senator Raggio closed the hearing at 6:10 p.m. RESPECTFULLY SUBMITTED: Judy Jacobs, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Assemblyman Morse Arberry, Jr., Chairman DATE: Assemblyman John W. Marvel, Chairman DATE: Senate Committee on Finance Assembly Committee on Ways and Means Joint Subcommittee on CIP/Higher Education May 23, 1995