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Funding formula aims to reduce in-fighting among ND campuses

BISMARCK -- North Dakota's Gov. Jack Dalrymple, lawmakers and university students and administrators said Tuesday the university system's funding formula has not been transparent, equitable and has been looked down on over the years.

A new funding formula proposed by Dalrymple and the Legislature's 2012 Interim Education Committee would easily break down how funding is allocated to universities and provide equitable and fair funding for each of the university's 11 campuses, according to those championing the bill.

Senate Bill 2200 proposes to fund universities based on the number of credits completed, rather than a mixed-bag of ideas.

"At the core, that is the goal, what we are trying to achieve as a system of higher education," Dalrymple told the Senate Education Committee. "Course completion is ultimately what you're after -- that alone provides a significant performance measure."

Committee Chair Tim Flakoll, R-Fargo, the bill's primary sponsor, broke down the different elements of the formula to the committee, he said the formula would lead to students taking larger class loads resulting in earlier graduation, reduced student loan debt, getting into the work field faster and reducing the overall cost per graduate.

"It solves a decades-long problem and should produce a seismic improvement in legislative trust and reduce in-fighting between campuses," Flakoll said.

Sen. Ray Holmberg, R-Grand Forks, chair of the Senate Appropriations Committee, spoke briefly about the formula's simplicity.

"This makes it very clear and simple, more simple than elementary school funding -- this is the direction to go that's different," Holmberg said. "When the (presidents and interim committee members) could agree on fair and equitable system, we should take note of that and hopefully pass 2200."

The new formula would take a base dollar amount that would vary depending on kind of institution -- two-year schools, such as Bismarck State College, would receive $117 per credit; Dickinson State University and other four-year regional campuses, $110 per credit; and North Dakota State University and the University of North Dakota would both receive $72 per credit -- and multiply that by the number of credit hours earned by students at the school.

That figure would then be multiplied by three main elements, which can increase the funding per credit completed.

The first element is the weighted student credit hour, which provides more formula dollars for a higher level of instruction or costlier programs such as nursing. A lower level course will receive a smaller weight and fewer dollars compared to an upper level course.

The formula is then multiplied by a "credit volume completion factor," which helps schools that don't award as many credits -- the smaller schools -- and cannot operate as efficiently as the larger schools in terms of dollars spent per credit hour. Finally it is multiplied by a factor that represents the physical square footage of a campus.

The formula was crafted by a group formed in fall 2011, comprised of vice presidents from UND, NDSU, Minot State University and North Dakota State College of Science as well as two staff members from UND and two from NDSU.

Rep. Mark Sanford, R-Grand Forks, a retired school administrator and member of the interim committee said Tuesday the committee met with many experts from North Dakota and out of state when trying to create the proposed formula.

"This, as a base formula, provides an excellent opportunity to consider other measures of performance that could be part of the funding system," he said.

If passed, the amount of funding each university receives for the 2013-2015 biennium will be based on the number of credits completed at the institutions during the 2009-2011 biennium since the number of credits completed for 2011-2013 will not be available until after the summer.

The new formula comes with a $21 million price tag to kickstart the changes and equalize the per credit hour funding level across the state.

An additional $1.5 million is separately being asked for from lawmakers to set aside for campus to launch new programs, Flakoll pointed out. As soon as they have enrolled students who are earning credits, the new program could be folded into the proposed formula.

The North Dakota Student Association and all 11 university presidents support the measure, which did not have any committee action on Tuesday.