For Release December 12, 1997
Regents to discuss higher education funding
BROOKINGS, SD—Today, at its December meeting in Brookings, the South Dakota Board of Regents reviewed the way public higher education is funded. The current funding formula, used for the last 25 years, is based on enrollment at each university and is a year-to-year appropriation. The proposed funding framework, approved at today’s meeting, will link funding to state policy goals for higher education. It has the advantage of allowing for multiple year planning for the higher education institutions and system.
Regents Executive Director Robert T. Tad Perry said, "Across the country university systems and state legislatures are devising new ways to fund higher education. The proposed plan will allow the university system, working with the legislature, to be more responsive to the needs of the state."
The approved plan outlines several higher education policy goals that will guide higher education funding for the next five years. Regents President David Gienapp of Madison said, "The policy goals reflect critical areas to ensure appropriate funding levels to maintain and improve the value of public higher education for South Dakota."
The policy goals range from improvement in student academic performance to enhanced inter-institutional collaborative efforts. There are nine policy goals identified in the proposed funding framework. Perry explained, "These policy goals can be adapted or changed with the needs of the state." The framework calls for policy goals to be reviewed after five years.
The approved plan will allow for long-term resource management by establishing base funding for the university system. "By including base funding levels, the state and the university system can practice better fiscal management, as well as allow the universities to better respond to needs of the state," explained Perry. Universities could secure further funding by achieving improvement in selected policy areas or through enrollment growth. In addition, the university system could request additional funding to pursue special initiatives.
The funding framework also establishes enrollment bases for the universities from which future decreases or increases would be measured. In the proposal, if a university’s enrollment stays within 4% of its enrollment base there is no change in the base funding. However, if enrollment falls below 96% of the base enrollment, then funds will be removed from the base funding. Similarly, if enrollment tops 104% of the base enrollment, funds are added to the base funding.
Perry said, "Enrollment levels of the individual institutions are expected to change over time." In this approach the universities will be better able to manage for nominal changes in enrollment levels.
Gienapp added, "The enrollment bases will allow the universities to maintain program quality, while also allowing funds to be shifted away from institutions whose enrollment is in serious decline and toward those institutions who are growing."
Perry said that the funding framework focuses on: "Linking state policy goals to higher education funding, and that is a critical step toward greater accountability and responsiveness."
The Board approved the new funding framework and directed Perry to continue with implementation and requested that regular progress reports be made to the Board.
The Board of Regents will next meet January 22-23 on the campus of the University of South Dakota in Vermillion.