A state Board of Regents task force wrapped up discussion this week on a proposal that would link 60 percent of the state's general university appropriation for the three regent universities to their enrollment of in-state students at all levels. The rest of the proposed formula ties state dollars to measurable outcomes such as providing access to targeted Iowa populations and students completing degrees.
The task force, which recommends subjecting the entire general university appropriation – about $480 million this year – to the funding formula, approved the model on a 4-1 vote. Len Hadley, retired CEO of the Maytag Corp. and the University of Iowa's representative on the task force, favored a model that counts all students in the enrollment portion of the model and weights graduate and professional students to recognize higher program costs.
Task force chairman and former regent David Miles will present the group's recommendations to the regents at the June 4-5 meeting in Ames. It's likely that Hadley will submit a minority opinion report to the board, either orally or written.
Miles said the model would be a "tremendous step forward in connecting state dollars to regents' priorities." He also noted that the model is intended to strengthen all three schools for the long run, "not speak to short-term funding problems."
Meeting since October, the task force was asked to investigate a funding model that's based on performance measures, not simply tradition plus inflation, as is the case now. Dating back to the 1940s, the current model divides the state appropriation on a perceived 40 percent/40 percent/20 percent (Iowa State/Iowa/Northern Iowa) split. But this year's general university appropriation is divided on approximately a 36 percent/46 percent/18 percent split, mirroring at least the last decade.
Recommendations for implementation
The task force will recommend an implementation period of two to four years, starting with the fiscal year that begins July 1, 2015.
As the schools' enrollments stand now, the proposed formula could shift tens of millions of dollars from the University of Iowa to Iowa State and the University of Northern Iowa. With the intent of not negatively affecting the quality at any school, the task force also will recommend capping the reallocation each year at 2 percent of a university's FY13 general education revenue.
Miles and Hadley both expressed concern about the proposed model's effect on the University of Iowa.
Retired co-president of Wells Fargo Home Mortgage Cara Heiden, Iowa State's representative on the task force, reminded the group that "two universities are at risk now.
"There's a sense of urgency to get this reallocated and help two institutions that have had pain," Heiden said.
Restored state funds could cover funding shifts
Recognizing that the cap would slow down full implementation of the new model, Miles said it's even more important that the board convinces the Legislature to continue to restore regents funding – still about $98 million below FY09 levels -- cut during the lean fiscal years 2010-12. Additional appropriations should be channeled first to Iowa State and UNI, he said.
"We hope the cap is a worst-case scenario. For the Legislature to fund this transition would be a tremendous step forward," Miles said. "The greater the appropriation, the faster the transition [to the new model] will go."
The rest of the proposed formula
In the task force's proposed funding model, another 30 percent would be linked to these performance measures:
- 10 percent: College access provided to targeted resident student populations (to be set by the regents but could include low income, ethnic minority, veteran or Iowa community college transfer students)
- 5 percent: Progress to degree by resident students (counted as credit hours completed)
- 10 percent: Degrees completed by resident students
- 5 percent: Placement of all graduating students in jobs or further education in Iowa (the method for tracking this hasn't been determined)
The final 10 percent would be linked to board-directed, university-specific outcomes that reflect each school's mission. Task force members suggested possibilities such as sponsored research success or recognition of high-quality academic programs.