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Political update: Governor's budget, and PEBP

23 Jan 2017 10:21 AM | Deleted user

NFA political update, by Kent Ervin, NFA Legislative Liaison

Governor’s Sandoval’s executive budget has good news for NSHE, but less good news for faculty compensation and benefits. Thanks to the improved economy and revenue estimates, the 5% cuts requested last spring were cancelled and NSHE is slated for additional funds. Enrollment caseload growth will be funded through the Weighted Student Credit Hour (WSCH) formula; the next phase of the UNLV Medical School will be funded with a $13M increase; rural community colleges will lose the one-time bridge funding from the last biennium but the community colleges will gain with a higher WSCH formula for Career and Technical Education; $10M is provided for new programs related to economic development goals; the Engineering Building at UNR receives a $41.5M state match through a lease-purchase arrangement; and the Hotel College building at UNLV will be finished and furnished. For further details see “NSHE praises Gov. Sandoval's Executive Budget recommendation” and NSHE’s presentation to the legislature.

Faculty compensation

The Governor’s State of the State address also emphasized compensation for state employees: “From 2010 through 2015, state employees endured furloughs, pay cuts, benefit reductions and loss of merit and longevity pay. For some, these reductions have been the equivalent of a 30 percent loss of wages and benefits. Tonight, I want to recognize the enormous contributions our state employees have made to help get the state back on track and acknowledge the dedicated work they have performed for the people of Nevada during this demanding economic period. Last session we were able to eliminate furloughs, restore merit pay, and provide a modest cost of living adjustment. This session, my budget includes a four percent cost of living adjustment and increased funding for health benefits to recognize the shared sacrifice and dedication of our state employees.”

The NSHE Chancellor and Board of Regents have stated: “In order to recruit and retain the highest quality faculty and staff necessary to fulfill our mission and best serve the State of Nevada, all fulltime employees of the Nevada System of Higher Education should be treated in the same fashion as all other state and major employee groups with respect to cost of living and merit increases appropriated by the state. Improving faculty and staff compensation is the Board of Regents’ highest priority.

In the Governor’s proposed budget, there is a 2% cost-of-living adjustment (COLA) in both years of the biennium for both classified staff and faculty. Classified employees will be eligible for annual merit step increases (3.5%–4.8%) if they have not reached the maximum of their range (after 9 steps). COLAs will keep faculty salaries from further losses in purchasing power (about 10% on average between 2009 and 2017, see attached charts). However, the Board of Regent’s request for a 2.5% merit pool for performance-based raises for faculty was not funded. Thus, despite the strong support for NSHE programs in the Governor’s budget and his mention of restoring merit pay, as well as it being NSHE’s “highest priority”, NSHE faculty members were again singled out as the only rank-and-file state employees not receiving funding for merit pay. From the mid-1980s through 2015, faculty merit was always funded whenever classified steps were funded by the legislative. It is particularly disappointing that NSHE officials are “delighted” with the executive budget even though it does not treat faculty compensation the same as other state employees, their stated highest priority.

Healthcare benefits

The executive budget’s “increased funding for health benefits” covers expected inflation only for PEBP’s “base” plan—the horribly reduced benefits level back in 2011. Per PEBP staff that is insufficient to maintain current 2016-2017 plan benefits. The changes in benefits approved by the PEBP Board as of 1/19/2017, mostly one-time funding from “excess reserves”, are shown in the table below.

In addition, the employee premiums for the PEBP HMO plans will increase by 7-9% for the preferred plans with HHP (north) and HPN (south), which have broader provide networks and do not require referrals to see a specialist. As a new option, PEBP will offer cheaper alternative HMO plans, with increased premiums of 1-2%. The alternative HMO plans have narrower provider networks and are not available in many of the rural counties.

At this juncture, NFA will need to pursue restoration of performance-based merit pay and retention of health benefits through the legislature and the Board of Regents. You may contact Governor Sandoval to ask about his budget priorities at, or find your legislator at and Regents contacts at

Benefit (high-deductible PPO plan only)

Current 2016-2017 plan year

Approved by PEBP Board for 2017-2018 only (as of 1/19/2017)

After July 1, 2018, unless changed by PEBP (“base plan”)


$1500 single/ $3000 family

$1600 single / $3200 family

$1900 single / $3800 family


Participants pays 20% after satisfying deductible

Participant pays 20% after satisfying deductible

Participant pays 25% after satisfying deductible


$1500/yr maximum

$1500/yr maximum

$1000/yr maximum

Annual vision exam

Up to $120, no co-pay

Up to $120, $25 co-pay


Life insurance

$25K active / $10K retiree

$20K active / $10K retiree

$10K active / $5K retiree

HSA/HRA employer contributions

$1100 +  $300 per dependent (up to 3)

$700 + $200 per dependent (up to 3) + $200 incentive after annual physical exam, blood lab tests, dental exam, and dental cleaning

$700 + $200 per dependent (up to 3)

HRA cap (does not apply to HSA)


HRA balances above $5000 to be taken back by PEBP


Preventive drugs

Participant pays 100% up to  deductible

20% co-insurance for select preventive drugs via mailorder or from preferred pharmacy network, 100% for other drugs


Note: Dr. Ervin’s legislative updates represent his own interpretations. Official positions by the NFA state board will be identified as such. Individual questions about compensation or benefits should be addressed to your institutional HR/benefits office or to PEBP. To receive regular updates, join the Nevada Faculty Alliance

You can see charts depicting NSHE salary trends prepared by Dr. Ervin here: NSHE_salary_trend_charts_20170105b.png

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