Proposed bill would require efficiency savings go toward tuition reduction

DES MOINES — A Board of Regents efficiency study underway at Iowa's public universities is expected to net tens of millions in savings annually, and now lawmakers are getting involved, proposing a bill requiring those dollars go toward student tuition and fee reduction.

The bill appears to contradict promises the Board of Regents made at the study's outset a year ago that resulting savings would be invested back into the universities.

Regent Larry McKibben has said the tens of millions in savings he expects to come from the efficiency review should be reinvested into the institutions' programs, campuses, and students. And University of Iowa President Sally Mason on Tuesday told the Faculty Senate she expects efficiency review savings will enable the campus to add housing and hire more faculty members to accommodate plans for a larger student body.

'I think the (efficiency) study will provide us savings,' Mason said. 'And I'm hoping everyone will hold feet to the fire and make sure the savings come back. That's the way to increase faculty numbers.'

But Rep. Pat Grassley, R-New Hartford, on Wednesday introduced the bill that instead would require efficiency review savings go toward student tuition and fee reduction beginning in the 2016 budget year and in every year after. The bill, sponsored by 18 other lawmakers, has not yet been scheduled for a subcommittee discussion.

'I've heard that the universities could see savings of up to $90 million,' Grassley said. 'I think that if we do a study and we do find savings, then we ought to put it into lowering the cost of tuition.'

The bill directs the state auditor to certify annual efficiency savings and corresponding reductions in tuition and fees.

'If we can make college more affordable for middle class students and families, we should,' as opposed to spending the savings on other things, Grassley said Wednesday morning, adding that he hasn't spoken with regents about his proposal.

'I expect I'll get some phone calls,' he said.

The Board of Regents launched the efficiency review of Iowa's public universities last February, pitching it as the largest of its kind in a generation, and it hired Deloitte Consulting LLP to conduct the study. Following months of campus meetings, interviews, and data analysis, Deloitte proposed 17 possible efficiency opportunities related to administrative and academic operations.

The board has approved implementing the 12 administrative opportunities, and it's moving forward with further review of the five academic opportunities. It paid Deloitte $3.1 million for its services but is using different firms to help implement the efficiencies and conduct the academic reviews.

Deloitte projected savings at $30 to $80 million a year, although much of that isn't expected to materialize right away. Still, Regent McKibben — who is leading the efficiency review for the board — said he's hopeful some savings will come sooner than later, and he cited that potential in his proposal for a third-straight tuition freeze for resident undergraduate students in the coming year.

McKibben on Wednesday told The Gazette he obviously supports tuition reduction and efforts to keep down the cost of education.

'And I have great respect for the legislative process,' he said. 'My only concern would be that we told the universities that we would allow them to repurpose those savings toward their missions.'

Even though McKibben has forecast significant savings and said he's hopeful some will materialize in the next budget year, on Wednesday he said it's too soon to start speculating on possible uses.

'We are quite a ways away from being able to say, 'Here's a pot of money and here's where it's going to be repurposed,'' McKibben said. 'Any speculation is a bit early.'

Representatives from UI, Iowa State University, and University of Northern Iowa declined to comment on the proposal Wednesday.

Sen. Bob Dvorsky, D-Coralville, said he thinks decisions on how to repurpose savings should remain with the Board of Regents.

'That's their job, and I don't know that the Legislature should be micromanaging,' Dvorsky said. 'The regents have to deal with tuition and the money they get from the state, and they should have the freedom to do that.'

Sen. Joe Bolkcom, D-Iowa City, said he supports anything that reduces student tuition.

'That said, I think the universities and the presidents of the universities are best able to decide how any savings might be reinvested into their institutions,' he said.

Mandating efficiency savings be used toward tuition rather than programming, faculty, or facilities might affect each of the three campuses differently, according to Bolkcom.

'I'm not sure the legislators are knowledgeable enough to know what each of the three campuses' specific needs are,' he said. 'I'm inclined to leave it up to them — the experts.'