New finance model reallocates funds for modern day

Eric Wirth

Local legislators have not expressed full support on a new statewide funding model that would allocate more money to Iowa State University.

Legislators at the Iowa statehouse will soon have to decide whether a new funding model that will send more state funding to Iowa State and the University of Northern Iowa at the expense of the University of Iowa will be implemented as they allocate funds to the regent universities this next fiscal year. 

The new performance-based funding model, which passed through the Iowa Board of Regents last summer, focuses heavily on in-state enrollment as a basis for receiving state funding for Iowa’s public universities. The new model will now base 60 percent of a university’s funding on the enrollment of full-time, in-state students.

The other 40 percent of the funding model is comprised of qualifiers such as degree progress, which accounts for 15 percent, 10 percent accounts for access for low-income students and community college transfers, 5 percent for sponsored research, 5 percent for enrollment of graduate and professional students, and the final 5 percent for metrics, which are to be distributed to the universities by the Board of Regents.

The Board of Regents has the authority to set the funding model, but the state legislature’s appropriations committee has the final say on how much money will end up being distributed to each university.

“What we do is vote on the budget,” said Sen. Herman Quirmbach, D-Ames.

Quirmbach, who is the Education Appropriation Subcommittee vice chair, said regardless of the funding model the Board of Regents submits, helping one education program more inevitably means helping another a little less.

Rep. Lisa Heddens, D-Ames, said the pull of money from the University of Iowa is cause for concern for her and other legislators.

The performance-based funding model would, when fully implemented, take almost $13 million from the University of Iowa each year and reallocate it to Iowa State and UNI, both of which would receive about half of the share.

“To damage any university would damage our students,” said Rep. Beth Wessel-Kroeschell, D-Ames.

Wessel-Kroeschell said not only will the funding model impact the regents, but private and community colleges as well, due to the limited pool of in-state students. This is a concern Heddens also shared.

Qurimbach, Wessel-Kroeschell and Heddens all said they agreed Iowa State needs more funding, regardless of the performance-based model.

Tom Hill, senior vice president for student affairs, said he agrees with the legislators.

“Business as usual isn’t going to get us where we need to go,” Hill said in regards to the current funding model.

Hill said the current model for fund distribution to the regent universities was designed for another time.

John McCarroll, executive director of university communications, said under the current appropriations model, Iowa State is receiving nearly $50 million less than the University of Iowa this fiscal year.

“We’re talking about a lot of your money and mine,” McCarroll said.

This inequality has been brought to the forefront due in part to a large increase in enrollment in recent years for Iowa State. ISU President Steven Leath said the growth in enrollment is due to growth in specific educational sectors in which Iowa State has strong programs.

“[Enrollment] growth in recent years has come from a 70 percent growth in agriculture and 68 percent growth in engineering,” Leath said.

Such growth calls for additional funding, but Quirmbach said he thinks the performance-based model may not be the best way to go about getting that funding.

Quirmbach said the current budget allotted to the regent universities, which is around $500 million this year, is nearly $95 million less than it was right before the 2008 recession.

“Between $36 million and $6 million, I think that’s a pretty clear choice,” Quirmbach said in regards to the estimated share Iowa State would receive from pre-recession levels of funding and the performance-based model respectively.

Quirmbach said the funding model may cause a battle for in-state students between the three regent universities.

“If you have the universities begin to fight one another, in the long term they all lose,” Quirmbach said.

Quirmbach isn’t the only one who has concerns with the new model. Heddens expressed concern that the push for increasing in-state student enrollment may cause a lack of education quality, due in part to larger class sizes and lower faculty to student ratio.

Not everyone shares the legislator’s opinions in full. Hill, while noting the disadvantages, said there are positives to the new model.

“It helps to increase the educational experience,” Hill said about the increase in funding the new performance-based model would provide.

He said it’s not just funding Iowa State, and all universities for that matter, need, but it does provide a platform that allows for an opportunity to better provide students with programs and services.

The new model aside, an increase of 1.75 percent in secondary education funding is needed to obtain a fourth straight tuition freeze, about which Quirmbach said he is cautiously optimistic.

Quirmbach said the expansion of funding such as this, as well as any further education funding expansions that could eventually bring funding levels up to pre-recession levels, would help facilitate implementation of the performance-based model.

“The conversation of reallocating pieces of the pie is always much easier when the pie is expanding than when the pie is stagnant,” Quirmbach said.

The debate over the budget for the upcoming fiscal year is set to begin in the legislature within the next few weeks. From there, how the funds shake out will become clear.