Committee reviews draft FTE‑based funding formula for UND, NDSU and a separate proposal for nine other campuses
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Summary
Legislative Council staff presented a draft funding formula that uses recent fall census FTE as the base (sample placeholder rate $7,000 per undergraduate FTE, graduate rate 1.5×) and separate incentive buckets for in‑demand completions and research; the draft would raise NDSU funding and reduce UND funding under the illustrative rates, prompting calls for hold‑harmless protections and further analytic detail.
Alex, a Legislative Council staffer, presented a draft higher‑education funding formula that separates the two research universities (UND and NDSU) from the nine other public campuses and ties a large portion of base funding to fall census full‑time‑equivalent (FTE) enrollment.
Under the working illustration Alex showed, the undergraduate base was modeled at $7,000 per FTE (a placeholder number for discussion), graduate/professional FTE would be paid at 1.5× that rate (illustratively $10,500) and additional incentives would be available for degree completions in workforce‑priority fields and for research productivity. Alex stressed the $7,000 figure is a modeling device and not an appropriation: "This is not the budgeting process... the 7,000 is a working number to look at things," he said.
Alex and staff walked the committee through components: (1) FTE base funding as the primary driver; (2) a completion/in‑demand incentive that pays extra for graduates in specified CTE, education and health fields; (3) a research incentive tied to doctoral graduates and external grants/contracts (staff recommended excluding some state appropriations from the external‑grants calculation to avoid gray areas). MD funding for UND’s medical doctorate program was proposed to be removed from the formula and handled as fixed funding.
Using the illustrative rates and recent fall‑census numbers, staff showed that the draft formula would have increased NDSU’s general‑fund share by about $14 million for the current biennium while decreasing UND’s by roughly $10.4 million (estimates depend on chosen per‑FTE rates and are sensitive to enrollment assumptions). For the nine other campuses, Alex presented a different draft that uses a single per‑FTE rate (example $8,750) and a larger completion incentive pool; that draft would produce significant shifts for some small campuses absent size or economic adjustments.
Committee members and institutional representatives raised several concerns: whether a pure FTE approach adequately recognizes higher‑cost professional programs (law, pharmacy, OT/PT), how to protect small or mission‑specific campuses, and whether a transition (hold‑harmless) period should be constructed to avoid abrupt budget shocks. Senator Sickler noted professional doctorates can be expensive to deliver and asked staff to model program‑level effects; staff said they can produce SIP/CIP‑level comparisons.
On capital funding, staff recommended pulling Tier 1 (deferred maintenance) out of the formula and placing tier dollars in a consolidated University System capital/infrastructure fund. Business managers favored consolidation but asked for lower match obligations for smaller campuses. The committee asked staff to draft statutory language and additional analysis for the next meeting. No final appropriations or formula changes were enacted at this session.