Want stable university funding? Think differently

The state budget left the universities and their overseers at the Board of Regents flummoxed and discombobulated. (You can use words like that when writing about higher education.)

They thought they had a deal. No longer would state funding for the universities be based on enrollment or relative political influence. Instead, it would be based on objective performance measurements. As the universities increased degrees, completed credit hours and research, they would get more from the state's general fund.

The universities had reason to believe they had such a deal. A bill passed in 2012 required the regents to adopt a performance funding formula and to base their budget request on it. That law remains on the books today.

According to the regents' calculation based on the formula, the universities should have received an additional $67 million next year. Instead, they got a $99 million reduction. Moreover, the haircut was allocated based on enrollment, not relative performance.

While there was some basis for belief in a deal, those who run and oversee the universities should have been far too smart and politically experienced to have really believed it. Performance-based funding was always a chimera. Long-term deals with a revolving set of politicians are impossible.

Governments talk about long-term planning and occasionally pretend to do some. But institutions whose decision-makers are chosen in frequent elections are incapable of actually doing it. Current exigencies will always override and push aside long-term plans. It's just the nature of the beast.

And, indeed, the performance model has never been funded by the Legislature, even before it was totally ignored in this budget.

The universities are wondering where they now stand. Whether Gov. Doug Ducey and legislative leaders still support the concept of performance funding.

In reality, it doesn't matter what they say or profess. With respect to state funding, the universities have always been in the same place and will be forevermore: at the whim of politicians.

Not that there should be a lot of worry about the universities. They'll be OK, even prosper.

State support for the universities has been cut by more than $400 million since 2008. But the universities have raised tuition and fees by considerably more than that.

In the interim, enrollment increased by about a third. So, from all sources – state appropriations, tuition and fees – the universities do have less to spend per student. But all three universities have managed that quite well, not only surviving but improving. And increasing enrollments among the disadvantaged.

The universities would like greater autonomy to manage their own affairs. Specifically, they would like to withdraw from the state's retirement, health care and risk management systems and establish their own.

The Legislature should grant them that authority directly and immediately. There's no need for a study or waiting around. If lawmakers are going to cut state support they shouldn't be chary or slow to enhance the ability of the universities to control their expenses.

Although the universities are going to be OK, it's not easy managing an institution when an important source of revenue can change by tens of millions of dollars in the blink of a politician's eye. What the universities could really use is some greater predictability.

There is only one way to get it: Switch from funding institutions to funding students.

The political consequences of cutting funding to the universities are diffuse. They are large enterprises with multiple funding sources. Next year's budget cuts appropriations to the universities by 13 percent. What are the consequences of that? No one really knows.

There are nearly 85,000 in-state students enrolled in the universities. If what the state was spending to support higher education went to them in the form of a stipend rather than to the institutions, a 13 percent cut would be in the range of $1,100.

Can you imagine the political uproar among students and their parents if lawmakers were considering a cut in their stipend of that amount? The political consequences would be concentrated and certain. Legislators wouldn't even think about it.

If the universities want greater predictability, the answer isn't in performance-based funding. It's in student-based funding.

Reach Robb at robert.robb@arizonarepublic.com.