IOWA LEGISLATURE

Bill would bar Iowa universities from spending nonstate money without state government approval

'Do we trust our regents?'

The House of Representatives chambers are seen at the Iowa Capitol in Des Moines on Thursday, Dec. 19, 2019. (Andy Abeyt
The House of Representatives chambers are seen at the Iowa Capitol in Des Moines on Thursday, Dec. 19, 2019. (Andy Abeyta/The Gazette)

The state’s public universities could not spend millions of dollars in federal grants, private gifts and other sources unless state lawmakers give their permission each year, according to a measure advancing in the Iowa Legislature.

House Study Bill 66 cleared an education subcommittee Thursday. The measure would bar the state’s public universities from spending any nonstate money “unless the expenditure is approved by an act of the general assembly.”

It would apply to the University of Iowa, including its health care system, Iowa State University, the University of Northern Iowa and the regents’ special schools beginning in July 2022.

Lobbyists from all three of the campuses oppose the proposal, but Rep. Phil Thompson, R-Jefferson, during the subcommittee meeting, said he supports discussing it further — saying he’s aware of lawmakers who want more input on campus spending.

“In the interest of continuing to drive conversation about the budget, I’m willing to sign on to this bill,” Thompson said. “Again, I just want to increase conversations. … I’m concerned that there’s no recourse for the Legislature on the backside, as opposed to just responding to what spending has happened.”

Under the proposed bill, the universities — via the Board of Regents — annually by Jan. 15 would have to submit to the General Assembly and governor a report detailing the “nature and amount of nonstate moneys received or expected to be received for expenditure in the following fiscal year.”

The report would have to spell out detail “each proposed expenditure of nonstate moneys in the following fiscal year by the board and each institution governed by the board,” according to HSB66.

ARTICLE CONTINUES BELOW ADVERTISEMENT

The proposal comes a year after the UI entered a groundbreaking partnership allowing for private operation of its massive utilities system. The $1.165 billion deal — aimed at carving out a new revenue source for a campus facing enrollment declines, state funding cuts and rising costs — enabled the UI to invest $999 million in an endowment it hopes will generate interest annually in support campus strategic initiatives.

Republican Gov. Kim Reynolds praised the deal, saying it could be a “road map” for similar ventures in the future.

The UI created a three-member board to decide how much money to withdraw annually and how to allocate it. Administrators also crafted a process inviting people on campus to apply for grants for projects supporting strategic goals.

Rep. Dustin Hite, R-New Sharon, is sponsoring HSB66 and told The Gazette that utilities deal — and the little say lawmakers had in its evolution and closure — was in among the drivers behind his proposal. He also noted the regents’ massive $6.37 billion budget in urging more legislative oversight.

“For us to have a state entity in the State of Iowa that has a $7 billion budget, which is pretty close to the budget that we passed for the entire state, without ever having any anybody that’s approving that budget that’s accountable to taxpayers and voters, that’s a little concerning to me,” Hite said.

When asked about the role of the Board of Regents — which is appointed by the governor, confirmed by the senate, and must approve university budgets and spending — Hite said he’s hearing from constituents concerned about rising tuition.

“We need to do something about this, but if we’re not directly in charge of that, we can’t do that,” he said. “Maybe if the Legislature would take control of it, we would see the same things ... But looking at the way that we deal with our state budget, and we’re trying to be very fiscally responsible, I’m not sure.

“I attended the University of Iowa, and there’s a lot of nice buildings over there that may or may not be necessary.”

ARTICLE CONTINUES BELOW ADVERTISEMENT

Lawmakers during Thursday’s meeting didn’t discuss the UI utilities deal or this year’s regents request for restoration of $8 million cut over the summer, plus another $18 million boost in general education funding for fiscal 2022.

Lobbyists for the regent schools told legislators that nonstate money sources are numerous and fluid and often tied to research that changes throughout the year.

Jennifer Harbison, a representative from UI Health Care, noted during Thursday’s discussion that UI Health Care is self-supporting — aside from the Carver College of Medicine — and does not rely on legislative funding. Requiring the enterprise get state approval for all nonstate spending would be cumbersome at best, Harbison said. At worst, it would obstruct UIHC’s ability to operate, conduct medical research and fundraise.

“It isn’t as if all of the funding comes in in a nice neat package at one point in time,” she said. “We’re applying and being awarded grants for research throughout the year. And sometimes there are federal budget cuts and so things are also changed throughout the year.”

Harbison asked how lawmakers perceive this bill affecting day-to-day operations. And university lobbyists asked how such specific legislative oversight might affect their campuses’ ability to fundraise and make commitments to honor donor intentions.

Rep Mary Mascher, D-Iowa City, echoed concerns about how upping red tape might hamstring the campuses’ progress on local, national and global issues.

“Why would we handicap our regent institutions that are working on COVID research, working on all of those … flus that we don’t even know about?” she asked. “We’re hurting our own industry. The cattle industry, the hog industry, the chicken industry.”

Regent lobbyists noted that years of budget, facilities and research reports are online — along with hundreds more documents spelling out spending and revenue approvals. They urged lawmakers to make sure what they’re looking for doesn’t already exist.

ARTICLE CONTINUES BELOW ADVERTISEMENT

“If all you want is information, it’s there,” Mascher said. “Do we trust our regents? They’re appointed by the governor and they have to be approved by the Senate. So either we trust them to do the job that they are basically appointed to do, or we don’t.”

Comments: (319) 339-3158; vanessa.miller@thegazette.com

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.