Iowa lawmakers propose tying appropriations to in-demand students

Lawmakers in an Iowa House education subcommittee Tuesday advanced a proposed new method for funding Iowa’s public universities that would have them competing for state dollars by enrolling students into high-demand majors to fill needed jobs.

Instead of granting the Board of Regents’ request for $15 million more in general education appropriations for the 2023 budget year — bringing the regents’ total higher-ed allocation to $501 million — the lawmakers suggested keeping that flat while putting $12 million instead into a new “Iowa Workforce Grant and Incentive Program.”

Iowa College Aid would distribute the money through two-year scholarships. Qualifying students would have to already be on a path toward a high-demand career, as defined by Iowa Workforce Development, like teaching, engineering, nursing, information technology, accounting and auditing.

“We wanted to wait till they got involved in the programs and really were on that career path” before the students would qualify during their final two years in school, said House Speaker Pat Grassley, R-New Hartford. The program also aims to keep students in Iowa after graduation. It provides up to $5,000 their first year in the program, up to $2,500 their second year and then the balance “if they stay in Iowa and work for a year” for a total of $10,000.

Rep. David Kerr, R-Morning Sun, chair of the House Education Appropriations Subcommittee, said the proposed new scholarship dollars will serve as a “great recruiting tool.”

“And they need students because the enrollments are decreasing,” he said. “I think this is a great plan that they'll jump on board with.”

When pressed Tuesday why he didn’t propose both new money for regent programming and for scholarship funds for high-need careers, Kerr said he made a decision last year that he wanted to focus state support on students.

“If we took this $12 million … and we divide it up, I think that would dilute both programs,” he said. "So we put the money toward this.“

Democrats on the subcommittee pressed their Republican counterparts to reconsider some funding for the universities themselves. But the bill moved forward without amendment.

“Having these regent institutions not only partner with us but compete for students, I think, is really a different approach than the state has always taken,” Grassley said.

“... What are we getting for those dollars?” he asked. “We look at this as a way that, hey, the Legislature is going to step up, invest in our regent institutions and more importantly invest in our students across the state.”

This, Grassley said, creates more collaboration between the Legislature and Iowa’s public universities. The program would be housed and funded through Iowa College Aid, created by lawmakers in 1963 as the state’s student financial aid agency.

Conceding that “new ideas are always met with a little bit of caution, especially as Iowans,” Grassley said, "I think if we really sit down and think about this, this has some great potential to really pay dividends on that workforce situation.”

Funding asks

The regents in September submitted a state appropriations request of $15 million more in general education funds — to be split $4 million each for University of Iowa and the University of Northern Iowa and $7 million for Iowa State University.

The House bill proposes status quo funding, and also denies UI-sought increases for its Oakdale campus and State Hygienic Lab of $1 million each. The only request the proposal incorporates is a $500,000 bump for UI’s “family practice program,” a legislative initiative based at the UI to support community-based family medicine residency programs across Iowa.

The Iowa Senate has yet to release an education appropriations proposal. Once it does, the Senate and the House must compromise on a bill to send to the governor.

Grassley, when asked whether he’s heard Senate support for the House proposal, said, “We're hopeful that this will be one more thing on our plate to address that workforce shortage. That's been the mission of all three — the governor, Senate, and the House — since we started,” he said.

By rejecting much of the board’s funding requests, the House budget proposal keeps the UI’s total general education appropriations at $215.6 million; ISU’s at $172.1 million; and UNI’s at $98.3 million for the upcoming budget year.

To UNI’s $1.6 million ask for a new community college degree attainment program, the House proposed appropriating $300,000.

Including all general education, special purpose, special schools, economic development, agriculture and other regent allocations for the current year, state appropriations total $616.6 million. Total revenues for the regent enterprise in the 2021 budget year were $6.26 billion.

In its latest appropriations request, regents noted the pandemic’s impact on its universities, which lost enrollment and, as a result, tuition revenue. “Students left campus, many faculty and staff transitioned to working remotely, residence hall and dining services were significantly reduced, and sports seasons were canceled or severely impacted,” a November regents report said.

Regent response

When asked what conversations lawmakers have had with the regents, Grassley said board representatives and university presidents have engaged legislators in “productive conversations about what does funding look like from the state's perspective and what are those partnerships that we need to build.”

“Some of these ideas that are reflected here in this budget come from some of those conversations addressing the workforce and our members asking questions, what are you doing to help with addressing the workforce shortage?” Grassley said.

When asked about the novel approach to funding the regents, board spokesman Josh Lehman told The Gazette: “The board is very appreciative of the legislative proposal to provide additional financial aid to regent students, and we look forward to continuing to work with the General Assembly to support Iowa’s public universities.”

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