Another round of pocketbook woes hit the University of Nevada-Reno on Friday, this time knocking $400,000 a month from the budget due to the crumbling stock market, officials said.
Almost $40 million worth of investments went sour for the Nevada System of Higher Education during the past several weeks. As a result, the Board of Regents suspended tapping into any unspecified money in the operating account.
Mike Wixom, chairman of the Board of Regents, likened the operating account to a checking account that earns interest. NSHE sets aside enough money to cover the system operating expenses and then invests the rest.
The suspension will likely continue until the stock market bounces back another five or 10 percent, Mike Wixom, chairman of the Board of Regents, said Monday. The length of the suspension will determine how much of a hurt UNR feels, President Milton Glick said.
Glick was hopeful that the 11-percent bounce on Wall Street would make the suspension a temporary one.
This is a very difficult economic time, and it is true for the private sector, it is true for individuals portfolios and it is true for this university, Glick said. We just hope that as the numbers continue to get worse that the leadership can come to another solution other than cut, cut, cut.
UNR is lopping about $30 million from its current budget to meet requirements laid out by Gov. Jim Gibbons. Gibbons called for a 14 percent cut to higher education in 2009-2010 budget because of lower-than-expected tax revenues.
The stumbling stock market added another and unexpected trip up to the university and to NSHE.
Wixom said the investments are normally quite safe and
have allowed NSHE to earn tens of millions in investment returns over the years. UNR even weaves the anticipated earnings into their yearly budgets.
Up until this time weve been able to anticipate earnings, Wixom said. But now over the past couple weeks the stock market has been so nuts that we havent been able to anticipate the earning as well as we usually do.
This is the largest loss NSHE has seen from its investments, Wixom said.
Losing the extra $4.8 million a year will impact many programs at UNR, though most only take a few thousand dollars a year from the fund. The largest portions, at $1 million each, go to pay NSHE operating costs and for instructors at UNR, said Bruce Shively, the assistant vice president of planning, budget and analysis. Many of the instructors are temporary faculty, he said.
Residential Life, Housing, and Food Services also took more than $400,000 from the investment fund last year, Shively said. Because the decision wasnt made until Friday, Shively said he doesnt have information on specific cuts that will be made.
Weve just begun to assess what the size of this problem is, Shively said. It may not be any academic program. We may make reductions in other areas.
Rod Aeschlimann, director of ResLife, couldnt be reached for comment on Monday.
Glick said any impact from the cuts will take several months to reach the students. But with the state budget cuts looming, the concern becomes all the greater, he said.
If we didnt have other budget cuts then it would be manageable without draconian results, Glick said. But you cant keep cutting and not feel an impact.
Nick Coltrain can be reached at firstname.lastname@example.org.