Proposal could make ISU top-funded university

Iowa's approach to funding its three public universities 'creates an incentive to overlook Iowa resident students in favor of out-of-state students that pay higher tuition,' according to a detailed report made public Friday.

That's why a Board of Regents-commissioned task force has recommended implementing a new funding approach that would tie 60 percent of state funding to resident enrollment at the University of Iowa, Iowa State University and the University of Northern Iowa.

If the new funding model were applied in a single year using the current budget year's appropriations, Iowa State would become the highest funded regent university, and the UI would see a $58.9 million hit to its appropriations.

The task force is recommending — in hopes of minimizing the effect on the UI — that any funding changes be phased in over a two- to four-year period and that no more than 1 percent to 2 percent of the UI's 2013 total general education revenues be reallocated in any one year.

That could translate to an annual loss in allocations to the UI of $6.5 million to $13 million, according to the task force report. Task force members have said a change in the funding approach would warrant additional state support — specifically to ease the effect on the UI.

'We believe that the value to the State of Iowa of this new funding approach warrants additional state funding to pay for the transition to the new funding model,' the report said.

Under the proposed funding model, the remaining 40 percent of state appropriations would be distributed as follows: 15 percent for progress and attainment, such as percent of degrees earned; 10 percent for access, including enrollment of minority and low-income students; 5 percent for job placement; and the remaining 10 percent would be left to the regents to decide.

Iowa for decades has been funding its universities using a 'base plus' method that gives the most money to the UI and the least to UNI.

'By relying for so long on a base-plus budgeting approach, the board has failed to adequately leverage the most powerful tool of any governing body for influencing the behaviors of its executives and institutions — the institution's budget,' according to the task force.

The task force said funding should be based on regent priorities and logic. It outlined the need to align state funds with resident enrollment based on the cost to provide an education.

'Let us not forget that resident tuition does not cover the full cost of an Iowa student's education at any of our universities,' the report said.

For example, according to the report, a university that admits 1,000 residents but sees no increase in state funding experiences a deficit while a university that adds 1,000 non-resident students in place of 1,000 residents 'benefits doubly' by retaining state funding and collecting higher non-resident tuition revenues.

Board of Regents President Bruce Rastetter this week spoke at a UI Staff Council meeting about the proposed funding change and criticized the UI for not working as hard as the other universities to recruit residents.

He cited resident enrollment statistics of 48 percent for the UI, 68 percent for ISU and 92.5 percent for UNI. A Gazette check of those statistics, which the board said were in reference to 'new freshmen enrollment,' showed the numbers to be slightly off — 58 percent of ISU's freshmen in fall 2013 were residents and 91.1 percent of UNI's freshmen were residents.

For total enrollment, Iowa residents make up 54.5 percent of the UI student body, 60.2 percent of Iowa State's student body and 89.2 percent of UNI's student body, according to the university registrar's offices.

Regents Report (PDF) Regents Report (Text)