For Release March 26

Regents Discuss Funding Framework for Universities

ABERDEEN, SD—Today, at its regular business meeting at the South Dakota School for the Visually Handicapped, the South Dakota Board of Regents discussed the implementation of the new framework for funding higher education. In December the Board had approved the new framework, which changes the way the Board distributes state general funds and tuition revenues to the universities.

Under the new framework, state policy goals are linked to the allocation of revenues. Regents President David Gienapp said, "The Board’s framework is innovative. Only a few other states have moved to a performance-based funding mechanism like this." Gienapp added that special incentive funds will be available in five areas. Revenues from each incentive fund will be distributed based on performance toward targets set by the Board. The Board will set targets annually, he said.

"The framework allows the universities to respond to the directives of the Board and the Board to respond to concerns of the Governor and legislators," agreed Regents Executive Director Robert T. Tad Perry.

The Board decided to discard its current formula because it made long-term planning and budgeting difficult. The amount of money available fluctuated with enrollment. The new framework will allow each university to operate from a base budget, which will be relatively stable, said Perry. Then they will strive to meet the goals of the incentive funds for additional revenues.

James Hansen, Vice President of the Regents, added that the goals are good for South Dakota. "The goals include access to higher education for qualified South Dakotans, increased enrollment in academic programs that are important for the economic growth of the state, academic improvement measured by student performance on the Board’s proficiency exam, collaboration among the universities to deliver courses to more people or to deliver those courses more efficiently, and increased fund-raising from non-tax non-state funds. We think, if our universities can achieve these goals, South Dakota higher education will be better for all of us."

The new framework will become effective July 1, 1998.

The next Board of Regents meeting will be May 7-8, 1998, in Brookings at South Dakota State University.

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