Committee divides on simplified funding models: FTE base, size factors and incentives debated
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Summary
Presentations from the system office and an alternate model prompted detailed debate over base per‑FTE funding, small‑institution weights, face‑to‑face incentives, and whether research universities should be tiered or separated. Lawmakers sought definable metrics and transition plans.
The Higher Education Funding Committee spent the bulk of its meeting reviewing two conceptual alternatives to North Dakota’s existing higher‑education funding formula and probing their political and practical implications.
Jamie Wilkie, director of finance for the North Dakota University System, presented a simplified FTE‑based model that illustrated a base per‑FTE amount (illustrated at $7,500), credential‑based incentives (for certificates, associate, bachelor’s and graduate degrees) and optional add‑back factors such as a small‑institution adjustment and a research factor. “So we’re taking that first column times $7,500 for each student FTE that’s in there,” Wilkie said while walking the committee through the sample calculations.
An alternate model presented by Alex layered progressive economic size factors (higher weights on the first tranche of weighted credits to reflect economy of scale), a face‑to‑face headcount incentive to reward on‑campus presence, and retention/completion incentives. Alex’s proposal also separated MD credits for separate treatment in the calculations.
Lawmakers probed the assumptions and placeholders. Several members warned the face‑to‑face headcount incentive could be gamed or could disadvantage online and out‑of‑state students who also generate revenue and classroom viability. Others pushed for stronger completion and retention incentives. Commissioner Brent Sanford framed the proposals as starting points: “This is just an attempt to bring it down to a more explainable, understandable objective measure to start with,” he said, while acknowledging additional work would be needed on methodologies and transition protections.
Key issues identified included how to define and calculate a small‑institution factor, whether to split research universities (UND, NDSU) into a separate formula or use tiers, how to treat out‑of‑state online enrollments, and what transition funding would be required so no institution is abruptly harmed. Several members urged the committee to define concrete metrics that institutions must meet to earn any incentive dollars.
Next steps: the committee asked staff and system officials to prepare more detailed options, including tiered formulas and transition scenarios, and set a tentative follow‑up meeting in March.