The Institutions of Higher Learning board on Wednesday heard a presentation from the National Center for Higher Education Management Systems (NCHEMS) detailing conceptual options to redesign how the state allocates operating appropriations across its eight public universities. NCHEMS representatives framed the work as an effort to align state funding with workforce needs and long‑term attainment goals such as the Ascent to 55% targets for postsecondary credentials.

NCHEMS described four broad approaches. The ‘‘base‑plus’’ model preserves prior allocations as a baseline and applies incremental adjustments (used historically by the system), but can embed historical mismatches with present needs and provide weak incentives for new statewide priorities. A straight per‑FTE (per‑student) formula, NCHEMS said, is simple and predictable — ‘‘the dollars follow enrollment’’ — but fails to account for program cost differences, institution scale, and non‑credit community services.

A fully performance‑driven model would allocate funding based on measurable outcomes such as degree production, retention, time‑to‑degree or employment outcomes; NCHEMS cautioned that unless adequately funded, performance models can unintentionally penalize institutions or fail to reward meaningful improvements. The presenters recommended a hybrid ‘‘adequacy’’ framework that pairs foundational (fixed) funding to cover baseline institutional costs with program‑weighted allocations and targeted performance incentives, plus a ‘‘stop‑loss’’ protection to reduce disruptive year‑to‑year volatility.

"We want a model that recognizes the cost differences across institutions and still rewards progress tied to state goals," Sarah Pingel of NCHEMS said during the presentation. The consultants outlined policy levers the board will need to decide — how to define base costs, which peer sets to use for comparisons, how to weight high‑cost programs, and how to coordinate tuition policy with appropriations.

NCHEMS said its engagement will include campus visits to each IHL institution, stakeholder interviews and draft modeling. Board members were not asked for a final direction during the session but were invited to provide input; President Overtree asked NCHEMS to be available to take questions after the meeting and noted the team will continue stakeholder work across campuses.

The trustees received no formal vote on model direction at this meeting. NCHEMS said it expects to present options and a final recommendation after further data collection and modeling in the months ahead.