Regents’ performance-based funding plan needs revision

Following 2008, state allocations by the University of Iowa and Iowa State University to the regent universities' general education funds were reduced.

That action, combined with regents' proposed changes to the funding model would alter funding to the UI by $114 million, ISU by $30 million and the University of Northern Iowa not at all.

Before 2000, state funds made up two-thirds of general education fund budgets at UI and ISU. By 2012, state funds made up one-third of those budgets, pushing student tuition to cover the remaining two-thirds.

To make up the difference, UI and ISU, our two research universities, looked to non-resident tuition, internal differential tuition steps and administrative allowances from research grants. These items are the enablers of maintaining the lowest Iowa resident tuition schedules in peer group comparisons.

State support at all these universities is a lesser proportion of the budget than is the resident enrollment head count. The focus on resident enrollment only is a solution for a problem that doesn't exist, as taxpayer dollars can now all be attributed to resident student support.

Regent schools currently enroll 44 percent of the resident graduates who enter four-year programs. Projections are flat. The regents' proposed funding formula harms UI, 27 private colleges, 15 community colleges and cooperation between our schools.

The money, talent and willingness of non-residents to stay in Iowa following graduation is excellent economic development, and it's free. Our in-migration ratio is the best of our peer group.

Performance-based budgeting sounds good, but severe negative unintended consequences in the 27 states that have tried it have caused over half to drop it. It doesn't work. Also, it takes decision making away from our education professionals and places it in the hands of regents, none of whom have higher education administrative experience.

In addition, the formula does not recognize that as education levels increase to master's, Ph.D. and professional degrees, instruction costs can triple. Adjusting head counts by inflating for these critical programs outlines campus profiles that emphasize one size does not fit all. This technique can lead to a common formula for UI/ISU of under $4,000 per cost-adjusted student.

Establish a fixed-cost allowance proportionate to state support for instructional technology and libraries, adjust for needed accounting commonalities, and you have a budget. The per-student number could easily be tweaked to meet legislative fiscal constraints.

UNI does not have the significant financial resources mentioned above. Its mission statement generates a narrowness of focus which minimizes these income sources.

This requires a per-student allowance of approximately $6,000 to meet its needs. Those needs should be viewed through the lens of the McKibben committee, as the efficiency consultants have placed several of their programs on review.

The legislature should reject the regents' proposal.

' Len Hadley, retired CEO of Maytag, was a member of the Board of Regents' performance-based funding task force. Contact: Hadleyml@aol.com