Regents Discuss University Funding Formula

Under the new model, funding will be based on degree production, completed student credit hours and external research funding.
Aug. 4, 2011

TEMPE, Ariz. – The Arizona Board of Regents reviewed and accepted a report Thursday recommending a new model for university funding, which would be based on degree production, completed student credit hours and external research funding.

The Higher Education Finance Committee of the Getting AHEAD project, a collaborative effort to increase the number of college degree recipients in Arizona, is recommending a new performance-based funding model for the three state universities. 

Under this model, the universities would move away from state funding being based on enrollment to a system where funding is earned or lost based on each institution's effectiveness at meeting approved performance goals. No other state, thus far, has proposed basing 100 percent of its new funding for universities on performance.

The committee proposes that university funding be linked to the following performance-based measures:

  • Increases in degrees produced
  • Increases in completed student credit hours
  • Increases in outside funding for research and public service funding

Increases in research funding, degrees produced and completed student credit hours would be averaged over three years to mitigate wide fluctuations in any one year.

"In order for Arizona to compete globally, we must ensure that our students are prepared for and have access to a highly effective and efficient postsecondary education system," said Gov. Jan Brewer. "Initiatives such as the Getting AHEAD project are helping to provide state policy makers with useful recommendations to consider in achieving this goal."

The budget package passed during the 2011 legislative session requires ABOR to present a performance-based funding recommendation to the governor and Legislature by Oct. 1.

Also on Thursday, the regents received a report on the Arizona Community Colleges' Long-Term Strategic Vision, a collaboration among education, business and community partners to significantly increase the number of Arizonans who achieve their postsecondary education and training goals, complete a degree or certificate or transfer to a university.

The plan builds on efforts to improve and align secondary and postsecondary education and training in Arizona. 

Scheduled for Friday at the two-day meeting at Arizona State University, the regents will consider approving the fiscal year 2012 initial all-funds operating budget for the state's three universities and the board's central office.

The budget encompasses state and nonstate dollars, including revenue from tuition, self-supporting units, gifts and grants and other sources. It also outlines estimated expenditures in the areas of instruction, organized research, public service, academic support, student services and institutional support.

The initial all-funds operating budget provides the board the first opportunity to review university and ABOR office operating budgets by major funding categories.

The regents also will consider guidelines for the process of selecting a new president at the UA.

The guidelines, which also would apply to the hiring of other university presidents in the state, outline the responsibilities of the search committee, search consultant and regents. ABOR is currently is developing a statement of leadership characteristics that will describe the desired qualifications and personal characteristics of the new UA president.