NSHE Budget Update and Explanation

The NSHE budget closings at the Legislature were held on May 5, 2025. The money committees made changes to the Governor’s recommended Executive Budget (GovRec) and set the NSHE operating budgets for the coming year, although there are some decisions still to be made. The difficult overall state budget situation is discussed in a separate article.

Bottom lines: NSHE budgets are largely static after considering inflation and enrollment growth and remain lower than before the Great Recession. No cost-of-living adjustments are in the budgets, but could be added later. The new instructional funding distribution formula recommended by the interim committee is not being implemented, which means that the needs identified for per-student funding for wrap-around services are not being addressed—more changes may be coming in the next session. There are still decisions to be made, including cost-of-living adjustments and appropriations for campus safety. NFA will continue advocating on behalf of our members through the end of the session.

Highlights of the NSHE Budget 

Overall, NSHE state operating budgets are increasing in dollar amounts as shown in Table 1. As explained in more detail below, however, resources are flat or declining after considering inflation and enrollment growth. 

Table 1. NSHE Total State Appropriations
Fiscal Year	State Appropriations	Year/Year Change
FY2024 (actual)	$816,736,844
FY2025 (budget)	$898,940,295	10.1%
FY2026 (May 5 budget closing)	$939,784,293	4.5%
FY2027 (May 5 budget closing)	$927,881,926	-1.3%
Sources: FY2024 NSHE Budget-to-Actual Report and FY2025 NSHE Operating Budget, including all state appropriations and state-funded COLAs. FY2026 and FY2027, NSHE budget closing on May 5 before any additional one-shot appropriations.

For the main instructional budgets of the seven colleges and universities, Figure 1 below shows state funding and student fee and tuition revenue per full-time-equivalent student, adjusted for inflation, from FY2007 through FY2027. Although state funding per student has recovered from the pandemic budget crisis, it is still significantly lower than before the Great Recession. Student registration fees have made up some but not all of the difference. Non-resident tuition revenue has suffered from decreasing out-of-state student enrollment recently.

The overall appropriation increase of 3.2% by FY2027 over FY2025 will partially cover inflation (before potential one-shot appropriations and statewide COLAs), but provide no extra relief.  

Figure 1. State appropriations and student revenue per student FTE for the combined instructional budgets of the seven NSHE colleges and universities, FY2007 to FY2027.

The legislature is funding the Small Institution Funding for GBC and WNC, augmented as recommended by the interim formula funding committee but phased in at 20% in FY2026 and 40% in FY2027. 

In other funding related to NSHE, the Knowledge Fund, which provides research grants for NSHE, was continued at $2.5 million/year, rejecting an increase to $14.6 million/year in the Governor’s budget. A budget of $50 million/year for Graduate Medical Education largely from Medicaid funding was also rejected, but could be reconsidered later.

Items Still to be Decided

The NFA continues to advocate for members on remaining budget issues.

Campus safety, one of NFA’s top budget priorities, has a $11 million one-shot appropriation in GovRec that is still to be considered. NSHE requested $38 million plus continuing funding of $7 million.

Governor Lombardo’s budget has zero cost-of-living adjustments (COLAs) for FY2026 and FY2027. COLAs could still be approved near the end of the session, but the budget outlook is dim. There is a possibility that the Legislature could address the 1.75% increase in employee retirement contributions, which, if left unaddressed, will result in a decrease in take-home pay for active employees on 7/1/2025, as described in a previous article on the history of COLA funding. NFA advocates for COLAs for state employees to cover inflation and the increased retirement contributions. 

Budget enhancements to fund NSHE for the historic but underfunded 12%+11% COLAs in 2023-2025 up to 80% per budget can still be considered as one-shot appropriations per the Governor’s amended budget. However, legislative leadership has expressed skepticism about funding these continuing costs as one-shot appropriations. NFA will continue to push for action to address the budget cuts created by underfunded COLAs. For the instructional operating budgets, student fee and tuition increases of 2.7% in FY2026 and 5.2% in FY2027 are slated and will help fill the gap from the large COLA increases in FY2024 and FY2025 that were funded only for the portion of the budgets from the state general fund appropriations. (Institutional breakdowns are discussed below.) 

The expansion of nursing instruction funded at $10 million/year in 2023 would need a renewed one-shot appropriation to continue. 

There is No Funding Formula

The “old” resident Weighted Student Credit Hour (WSCH) distribution formula was suspended in 2023. The new funding formula recommended by the interim Ad Hoc Committee on Higher Education Funding was rejected by the Legislature, with or without hold-harmless funding for UNLV and UNR. Legislators found decreases to UNLV and UNR to add funds for community colleges unpalatable, but also were unwilling to provide new funding to hold them harmless. The last time instructional funding was redistributed based on enrollment data was in the 2021 session using the 2019-2020 count year. WSCHs are still used for enrollment caseload adjustments and the Small Institution Funding, remnants of the old formula. Figure 2 shows the history of the dollar value per WSCH adjusted for inflation. The real value per WSCH has declined, meaning lower resources per course taught.\

Figure 2. Dollar value of appropriations per Weighted Student Credit Hour (WSCH) from FY2024 to FY2027.

B+M+E Funding Mechanism

So how are budgets determined? With no funding formula for redistribution among the seven educational institutions, all NSHE budgets including the professional schools and other traditionally non-formula programs are funded through a Base + Maintenance + Enhancement process.

The Base budget is the current-year (FY2025) legislatively approved appropriations with adjustments for (the state-funded portion of) COLAs but excluding one-time appropriations.

Then there are “Maintenance” adjustments, including changes in WSCHs at each institution between the count year (2023-2024 this time) and the prior count year (2021-2022) totaling $22.8 million per year, the WSCH component of the Small Institution Factor, and changes in research space square footage at UNLV and UNR. Those are remnants of the old formula. There are also statewide Maintenance  accitems, for changes in fringe benefit rates including PEBP and retirement contributions ($55.2 million for the biennium), for example, which are still funded at 100% from the General Fund.

Finally, there are proposed budget “Enhancements”. GovRec initially included Enhancements for (1) increased costs of utilities at $11.9 million per year statewide; (2) phased-in implementation of the new funding formula at 20% in FY2026 ($4.1 million ) and 40% in FY2027 ($8.8 million) including hold-harmless funding for UNLV and UNR; (3) funding the 12%+11% COLAs from 2023-25 up to 80% per budget account ($28.7 million/year); and (4) increasing the enrollment caseload adjustment per WSCH from $173.29 to $208.99 to account for the state-funded portion of COLAs for FY2025 ($4.7 million). Because Governor Lombardo’s initial budget had a structural deficit, against state law, the Governor’s Finance Office submitted amendments to shift the COLA funding, (3) and (4), from continuing appropriations to one-shot funding.

At the 5/5/2025 NSHE budget closing, the only Enhancement approved was the utilities funding, which will release program funding that had to be diverted to pay increased energy costs. There will be no implementation of the new formula, with or without hold-harmless provisions. The funding of past COLAs up to 80% could still be considered as one-shot appropriations. 

Table 2 compares state appropriations for the seven main instructional operating budgets. Note that the FY2024 & FY2025 values include various one-time appropriations, such as pandemic enrollment recovery funds and the Nursing expansion, while any one-shots that might be approved this session are not yet included for FY2026 & FY2027.

Table 2. State Appropriations for Instructional Operating Budgets
	FY2024 (actual)	FY2025 (budget)	FY2026  (May 5 budget closing)	FY2026 /FY2025	FY2027 (May 5 budget closing)	FY2027 /FY2026
UNLV	$233,991,397	$253,973,037	$278,254,217	9.6%	$274,141,016	-1.5%
UNR	$160,582,630	$173,121,548	$181,186,466	4.7%	$180,025,789	-0.6%
NSU	$32,863,186	$38,814,685	$37,363,532	-3.7%	$36,095,000	-3.4%
CSN	$117,591,040	$125,133,833	$128,147,482	2.4%	$125,168,672	-2.3%
GBC	$17,101,283	$18,105,687	$18,469,845	2.0%	$18,423,338	-0.3%
TMCC	$39,918,718	$42,777,073	$49,388,135	15.5%	$48,512,158	-1.8%
WNC	$16,053,002	$19,333,255	$21,279,852	10.1%	$21,272,354	0.0%
Total	$618,101,256	$671,259,118	$714,089,529	6.4%	$703,638,327	-1.5%
Sources: FY2025 NSHE Budget-to-Actual Report and FY2025 NSHE Operating Budget, including all state appropriations.  FY2026 and FY2027, NSHE budget closings on May 5 before any additional one-shot appropriations.

An expanded version of Table 2 including student fees, tuition, and other non-state revenue, along with data on the allocation of registration fees by institution, is available.

Ramifications of No Formula

Because no enrollment-based formula is being applied to the main instructional budgets for the seven NSHE colleges and universities, funding per student or per credit hours will diverge as enrollments change over time. Figure 3 shows the state operating budgets per full-time-equivalent student for each of  the institutions from FY2007 through FY2027. The resident WSCH formula was implemented in FY2014 and continued through FY2022. It was successful in bringing per-student funding in alignment for like institutions (the comprehensive universities, UNR & UNLV; the community colleges, CSN, GBC, TMCC & WNC; and the single “state college”, NSU). Unfortunately, that was accomplished by bringing per-student funding down to a lower common denominator. But since the WSCH formula was abandoned in 2023, the funding per student for similar institutions has started to diverge again. 

Figure 3. State appropriation per average annual full-time-equivalent (FTE) enrollment for the seven main instructional budgets from FY2007 to FY2027.

The Final Days

Starting May 12, the budget committees are expected to start considering bills that implement budget decisions and one-shot appropriations in GovRec. Other bills that have fiscal notes will be last in line, if heard at all before the regular session ends on June 2l. The further erosion of the state budget by federal policies, including cuts to Medicaid funding, may require a special session later in the year. Drastic changes in federal funding of state-administered programs could endanger funding for higher education.

Updated 5/9/2025 with dollar amounts for Maintenance and Enhancement budget items, and to correct the purpose of the WSCH dollar-amount increase to account for FY2025 state-funded COLAs (not up to 80%). Updated 5/12/2025 with link to expanded Table 2 and additional information on student registration fee allocations to operating budgets.