Regents’ performance-based funding plan panned by privates, community colleges

DES MOINES - Shortsighted.

Not well thought out.

A threat to private colleges and community colleges.

Ill-fated.

Politically unacceptable.

That's the assessment of representatives from Iowa community colleges and private colleges of the Iowa Board of Regents' performance-based funding plan that will reward the state's three regent universities - Iowa State University, University of Iowa and University of Northern Iowa - for recruiting in-state students.

Retired Maytag CEO Len Hadley of Cedar Rapids led the 90-minute barrage Tuesday, telling the Education Appropriations Subcommittee the plan should be scrapped because there is no benefit to students or Iowa taxpayers.

Although more than two dozen states have tried performance-based funding, about half have dropped it, Hadley said, and positive outcomes are not clearly established.

The regents' plan to base 60 percent of university funding on in-state enrollment is out of line with other states' 'toe in the water approach” to performance-based funding, he said.

Rewarding the regent universities for recruiting Iowa residents will lead to an 'arms race” for Iowa high school graduates, according to, Gary Steinke, executive director of the Iowa Private Independent College Association, told the committee. He's hearing anecdotal evidence it's already underway.

The performance-based funding formula would treat students as numbers and provides no benefit to students who attend the regent universities, he added.

Performance-based funding 'threatens to disrupt the relationship between community colleges, private colleges and the universities,” North Iowa Area Community College President Steve Schulz said.

The biggest threat is that regent universities will siphon off liberal arts students from the community colleges. The drop in enrollment will make it more difficult for the community colleges to offer the technical skills courses employers say are needed.

Dubuque City Manager Mike Van Milligan and Sarah Harris of the Greater Dubuque Development Corporation warned lawmakers not to accept the plan because, in Van Milligan's words, 'it's the exact opposite of what needs to happen.”

'We need to be in a fight for people to come to our universities from outside the states,” Van Milligan said. According to the regents, 40 percent of out-of-state students remain in Iowa after graduating from one of the three universities.

'We need to bring in more people so we have a greater workforce so our economy can grow. It won't grow without workers,” he said.

He cited the Battelle Study commissioned by the Iowa Economic Development Authority that found Iowa's population is not growing enough to meet future workforce needs.

Lawmakers aren't scheduled to take an up-or-down vote on performance-based funding, but how they structure their budget for the regent universities may determine whether the Board of Regents can proceed with the plan.

The regents are scheduled to talk to the committee Feb. 26.