Task force will recommend new model for allocating state funds to universities
A task force asked to review how the state's General University appropriation is allocated each year to the three regent universities began its work last week and hopes to present recommendations to the state Board of Regents in June. It's unlikely that the recommendations would be applied to next summer's state appropriation.
Art Hauptman, a Virginia-based public policy consultant who specializes in the financing of higher education, led the task force's first discussion. Hauptman told the group that "it's very important to have a formula, some mechanism, for taking a politically derived number and allocating it. A formula sends messages to the institutions on where/how to spend the money.
"In Iowa, you've been sort of on auto pilot in that sense," he said.
About half of state legislatures reward their public universities for good performance, most commonly based on graduation rates, Hauptman said. Noting that graduation rates can be manipulated with selective admission practices, he encouraged the task force to consider graduation numbers as a better marker. Within that might be sub groups, such as low-income graduates, minority graduates or graduates with specific skills.
"Use retrospective numbers, not prospective numbers," he urged. "You get the dollars based on what you did last year."
Board of regents staff member Patrice Sayre showed task force members that little has changed in how state funds are allocated since 1946, the earliest year for which she could find records. Since post-World War II, the three regent universities have received general instructional funding in roughly a 40-40-20 split (University of Iowa-Iowa State University-University of Northern Iowa).
Sayre said there aren't guidelines in either the Iowa Code or the board's policy manual on allocating state appropriations among the three schools.
In the 1960s and 1970s, some states began basing at least part of their appropriations on student enrollment, but Iowa has never done that, she said.
For example, basing state funding, at least in part, on undergraduate resident enrollment would benefit Iowa State, which historically enrolls more of this student population than the two other schools. Current board of regents members have demonstrated an interest in making college more affordable and accessible for the state's resident undergraduate students. Sayre's data indicated that if one took last year's (2012-13) General University allocations and factored in only Iowa undergraduates enrolled, the allocation would amount to about $20,000 per resident undergraduate at Iowa, $10,000 per resident undergraduate at Iowa State, and $9,000 per resident undergraduate at Northern Iowa. The regents have never used enrollment data to allocate state funds.
Task force members
Former regent David Miles chairs the five-member task force. He's joined by current regent Katie Mulholland and an appointee from each of the schools:
- Iowa State: Cara Heiden, Urbandale, retired co-president of Wells Fargo Home Mortgage
- University of Iowa: Len Hadley, Cedar Rapids, retired CEO of Maytag Corp.
- University of Northern Iowa: Mark Oman, West Des Moines, retired senior executive vice president of Wells Fargo and member of the UNI Foundation's board of trustees
When former board of regents president Craig Lang announced the task force last April, he asked it to look at the current formula for distributing General University appropriations and find "an agreed-upon set of measurements that may help rebalance the equation and link dollars more directly to priorities."
The task force's work this winter will include discussions with the three university presidents, a higher education leader from a state that uses performance-based funding and staff with the Education Advisory Board, a provider of research outcomes and practical advice in higher education. During April and May, the group hopes to focus on a metrics set and develop its recommendations.
At Iowa State this fiscal year, the General University allocation is about $174 million, or roughly 28 percent of the operating budget. It does not include about $55 million in state funds appropriated directly to ISU units such as the Ag Experiment Station, Cooperative Extension, Veterinary Diagnostic Laboratory and the ISU Research Park.
The University of Iowa received about $222 million in its General University allocation this year; the University of Northern Iowa about $83 million.