UI faculty ask Board of Regents to delay Wednesday funding decision

With the Board of Regents poised Wednesday to act on a proposal that would significantly alter the way state dollars are allocated to Iowa's three public universities, University of Iowa faculty members are urging the board to postpone its decision and do more research.

The new funding model, proposed by a regent-charged task force last month, ties 60 percent of state-allocated higher education funds to resident enrollment. If approved, the change would make Iowa State University the top funded university in the state, and it could decrease UI appropriations by nearly $60 million.

Board of Regents President Bruce Rastetter has said any changes in the state's higher education funding model will be rolled out over a two- to four-year period beginning in the 2016 budget year. And the proposal aims to mitigate the impact to any one university by capping the amount of money that could move annually from one campus to another at 1 to 2 percent of the 2013 budget

But, in a letter to the Board of Regents, UI Faculty Senate leaders expressed 'serious concerns” with the proposal, which they say not only ties 60 percent of state funding to resident enrollment but 25 percent to access, progress and degree attainment of in-state students.

'UI is a tier 1 research university that attracts many students from around the world as well as from within the State of Iowa,” according to the Faculty Senate letter. 'It is also a large and complex institution with high fixed costs that do not vary with fluctuations in enrollment.

'Such a huge loss of funding - even if phased in over time as suggested - would damage UI and its ability to compete with other research universities,” according to the letter. 'Moreover, such a drastic change would likely have negative consequences for ISU, UNI, and the state as a whole.”

Regents launched a review of how it allocates state dollars because the current 'base-plus” funding model hasn't changed in decades while other factors have - like enrollment, tuition and state funding levels. Right now, UI gets 46 percent of the state's general education funding, ISU gets 36 percent and UNI gets 18 percent, while UI freshmen resident enrollment is the lowest among the three schools at 48 percent.

Members of the regents' 'performance-based revenue model task force” said they think the majority of state funds should follow resident enrollment because 'it is resident tuition that is being subsidized.”

'By state law, non-resident tuition must cover no less than 100 percent of the cost of instruction,” according to the task force's recommendation. 'In practice, non-resident tuition typically pays for well more than the direct cost of instruction.”

But UI faculty members in their letter laid out four primary concerns with the funding proposal. First, they argue, the model appears to ignore research and experience from other states that have found universities should be subject to different metrics reflecting individual missions.

Some states already trying some form of performance-based funding also have found that enrollment 'is not the best method for achieving the goal of increasing the number of state residents who have completed a college degree,” according to faculty.

'Nevertheless, it proposed a single model for all three institutions,” according to the letter, which is signed by Faculty Senate President Alexandra Thomas, Vice President Christina Bohannan, Past President Erika Lawrence, and Secretary Tom Vaughn.

Secondly, UI Faculty Senate leaders said the proposed funding model undervalues graduate and professional programs by failing to account for the higher cost of educating those students. A shortfall in funding for those programs could lead to a drop in overall graduate and professional enrollment, a decrease in enrolled Iowa residents relative to non-residents, or an increase in tuition and fees, according to the UI faculty.

'None of these options would be good for Iowa,” according to the letter.

Thirdly, faculty members argued, the funding proposal undervalues UI research and its contributions to the university and the state. UI research boosts the state's innovation and economy and spurs advances in health care while also providing jobs, according to the letter.

'Yet, only 5 percent of funding in the proposed model relates directly to research,” faculty members wrote in the letter. 'The task force report provides no data on the economic impact this model would have on UI research or on the state.”

Lastly, UI faculty members argue that performance-based funding - as proposed - would counteract an efficiency review also underway at the three regent universities. That review challenges university heads to consolidate and cut so that Iowa doesn't have three 'like” campuses.

In a meeting with a consulting representative for that review, UI faculty members said the university was praised for its diverse student body and discouraged from emphasizing enrollment of resident students.

'More broadly, (the consultant) has been charged to find ways to reduce redundancies and promote collaboration among the three universities,” according to the letter. 'The proposed funding model runs contrary to those goals by incentivizing UI, ISU and UNI to pursue identical strategies and to compete against each other.”

Faculty members cited a statistic provided in the performance-based funding report indicating the number of college-aged Iowans is expected to fall 17 percent by 2030.

'The model gives financial incentives to the institutions to engage in a three-way bidding war for the same shrinking pool of students,” according to the letter.

The UI Faculty Senate asked the Board of Regents to postpone consideration of a new funding model until it can conduct a more in-depth economic impact study and until results of its efficiency review are in.

'We do not see how the proposed model - even if slightly modified or phased in over time - balances the needs of the three universities and other Iowa constituencies,” according to the letter.

Board President Rastetter told The Gazette last month that the board 'will make a decision” at its meeting Wednesday.

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