State lawmakers debate university funding model

CORALVILLE -- The intended and unintended consequences of a new proposal for funding Iowa's public universities came under review by lawmakers this week during a legislative fiscal committee meeting.

Some lawmakers praised the Board of Regents for reviewing and remodeling an antiquated funding system by tying state dollars to enrollment and performance metrics. Others expressed concern about creating 'hyper competition' among the institutions and said an emphasis on in-state recruiting could affect prospective out-of-state students.

Rep. Dave Jacoby, D-Coralville, said several non-resident students considering Iowa for college have told him the new funding model — which ties 60 percent of state dollars to resident enrollment — makes it seem like Iowa isn't interested in non-Iowans. He likened it to putting up billboards on the major interstates connecting Iowa to neighboring states saying their students are not wanted.

'I'm asking you to make sure we take those signs down that say we don't want those young people moving to Iowa,' Jacoby said.

David Miles, a former regent who chaired the task force charged with developing new 'performance-based' funding metrics, presented details of the model to legislators this week and said that couldn't be further from the truth.

'Enrolling non-resident students is not a bad thing — not at all,' he said.

But, Miles said, those students pay tuition rates that cover the cost of their education. Resident students do not. Miles said the new funding model aims to cover the cost of educating Iowans while also rewarding universities for recruiting and enrolling them.    As recommended, the Board of Regents new funding proposal would tie 60 percent of state support to enrollment, 15 percent to student progress and degree attainment, 10 percent to access, 5 percent to sponsored research, and 5 percent to graduate and professional student enrollment. The remaining 5 percent would be left for the regents to decide.

Because Iowa State University and University of Northern Iowa have a greater portion of in-state students than University of Iowa, the model increases their state allocations while decreasing funding to UI. If rolled out over one year, based on current enrollment numbers, UI would lose $46.5 million.

To avoid that kind of a hit to UI, the Board of Regents recommended a 2 percent cap on the amount of money that could move from one university to another for the first three years. That means UI could lose $12.9 million in the 2016 budget year unless state lawmakers provide that amount — as requested — to help roll out the new funding metrics.

Questions recently emerged around details of each metric — including how enrollment will be reported for undergraduate, graduate, and professional students. The first proposed definition for tallying full-time equivalent students would have taken less money from UI than originally projected. But, after presenting that definition to officials at the three universities, ISU and UNI representatives expressed concern and asked for a change in how professional students are counted.

Board staff members made that change, returning the potential financial impact to UI near where it started — at nearly $47 million.

Sen. Joe Bolkcom, D-Iowa City, during this week's presentation told Miles and Board of Regents President Bruce Rastetter that the behind-the-scenes debate around definitions and dollars indicates competition is already ramping up and he believes it will be detrimental to the institutions.

'I'm concerned about the proposal before us, and I hope for more discussion,' Bolkcom said.

Meanwhile Sen. Jeff Danielson, D-Waterloo, said UNI — which sits in his district — has taken a 'punch to the gut' recently in state support. He said something needs to change in how the regents reallocate dollars, and he supports the steps that have been taken.

Sen. Robert Dvorsky, D-Coralville, co-chairs the legislative fiscal committee and said the Board of Regents' model is only a recommendation. He said the legislature will decide how to dole out funds.