Capitol Update Week Six

Board of Regents Examining How State Funding Are Distributed to State Universities

Many Iowans are under the assumption that state funding to the state’s three public universities are distributed in a manner similar to K-12 funding, where the goal is to provide a similar level of support for each school child regardless of the district they attend.  But that is not how it works when it comes to the higher education of in-state students, and this situation is getting closer attention now from the Board of Regents.

Just how does Iowa provide its support for its three universities? According to Regents staff quoted in a January 24 Cedar Rapids Gazette article, the method used by the Board of Regents dates back at least to the end of World War II.  The formula used appears to be relatively simple – a 40/40/20 split between the University of Iowa, Iowa State University, and the University of Northern Iowa.  Things are never as simple as they appear, and that certainly is the case when it comes to taxpayer support for in-state university students.

The chart below shows the FY 2014 General Aid appropriation for each university, as the Legislature approved it last year, and how much each school would have received if it was given its proportional share under the Board’s formula:

As can be seen, the actual funding appears to not in line with the Board’s long-standing formula.  The UI’s share is higher than what would be expected under a 40/40/20 split, while ISU and UNI are receiving less.  The differences in the programs offered by each school may account for some of the variation in funding, but another factor is likely playing a significant role in causing the funding inequity.

While the Regents’ formula for distributing state funds has not changed in many years, the composition of the student bodies at Iowa and Iowa State has.  Each of these schools has seen a major influx of out of state students over the years, while UNI has remained predominantly an in-state student school.  The fall 2013 enrollment report, presented to the Board at its December meeting, show the differences:

School In-state Students Out of State Students Total Enrollment
Univ. of Iowa 16,916 14,149 31,065
Iowa State 19,850 13,391 33,241
UNI 10,842 1,317 12,159

The fact that the Regents’ allocation formula for state aid has not adapted as the composition of the student body has changed has produced large variations in the funding per in-state student.  In FY 2014, UI is receiving $13,126 of General Aid from the state per in-state student, while ISU is receiving $8,765 per in-state student and UNI’s share is just $7676 per in-state student.  This situation is one of the factors in the concern over the funding levels for UNI.

Unlike previous members, the current Board of Regents has recognized that the existing funding formula is not working for Iowa’s three universities or Iowa taxpayers.  Last year, the Board established a task force led by former board president David Miles to examine how to bring the funding formula into the 21st century.  The task force has already met three times, focusing much of its work on how other states use performance or outcome measures to set funding levels.

One of the states getting close attention from the work group is Tennessee.  The Volunteer State has established a set of measures by which is allocates all of its funding to the network of state universities. The most predominant factor used in allocating funding is the total number of graduates.  Tennessee has used this process for three years.

The Regents’ task force is expected to hear the ideas of the three university presidents at its next meeting.  The work of the task force is to be completed by June, when it will present its recommendations to the Board of Regents.  While any change would take several years to implement, the Board is expecting to makes it proposal for changes to the Governor this fall.

Recap of Week Six

This week was the first funnel week of session. All bills have until Friday to pass out of committee. If a bill doesn’t make it out of committee, it’s no longer eligible for passage this session. The second funnel of the session is the week of March 14th. At that point, a bill will have to pass out of one chamber and the committee of the other in order to remain alive for the session. Appropriations and Ways & Means are the only committees that are funnel proof. Bills that go through those two committees are not subject to the funnel deadlines.

I would like to congratulate Henderson Products in Manchester on receiving financial assistance from the Targeted Industries Internship Program. The Iowa Economic Development Authority awarded Hendersons with the grant. The company is hiring three manufacturing and design summer interns with the grant. This is a great program that awards Hendersons for giving college students the opportunity to get job experience.  This also helps them finish their education and get a start on entering the workforce.

On Wednesday I welcomed Dubuque Archbishop Michael Jackels as my guest in the House. Archbishop Jackels offered the Morning Prayer to the House and Senate as we gaveled in.

Rep. Brian Moore (Bellevue), Rep. Josh Byrnes (Osage), and I with Archbishop Michael Jackels

Rep. Brian Moore (Bellevue), Rep. Josh Byrnes (Osage), and I with Archbishop Michael Jackels

Thursday the House Agriculture committee passed HSB 524 unanimously, which allows the corn checkoff board to raise the checkoff cap. Under the bill, the cap can be raised one cent with a referendum vote during the next five years. After five years, the cap can be raised another cent, totaling three cents. The raise must be voted on by the corn producers in order to take effect. To clarify, the bill simply allows the cap to be raised. The corn producers have to vote to actually raise it. The bill also creates an Iowa Corn Checkoff Task Force. The task force is charged with two tasks.  One, putting a system in place to allow corn producers to vote on the raise by mail ballot.  Secondly, the task force design a method for corn purchasers to inform the corn producer where to receive checkoff refund information. While it is automatically withdrawn from your check, the corn checkoff is voluntary. You can request your money back if you submit a request for a refund in a timely manner.

The task force addresses my concerns that we need more involvement in referendum votes and in refund transparency.

Next Friday, the 28th, I’ll be attending the Jones County Economic Development forum at the Lawrence Center in Anamosa. The forum runs from 12pm- 2pm and is open to the public.

If you have any questions, comments or concerns about these topics or any others please feel free to contact me by e-mail at lee.hein@legis.state.ia.us or by phone at (515) 281-7330.

Sincerely,

Rep. Lee Hein

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