Lawmakers Advance Bill to Explore State University Performance-Based Funding in Iowa

This article was originally published in Iowa Capital Dispatch.

Lawmakers moved a bill out of an Iowa House subcommittee Wednesday that would have the state’s public higher education system explore a funding model based on workforce-based performance measures.

House Study Bill 541 would have the Iowa Board of Regents study a potential performance-based funding model for the University of Iowa, Iowa State University and the University of Northern Iowa and submit a report to the General Assembly by its November 2026 meeting.

According to the bill, this funding model should factor in graduation rates, the number of awarded degrees corresponding to Iowa’s high-demand jobs, post-graduation employment rates and income and how many graduates stay in Iowa.

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While the board of regents is registered as undecided on the legislation, board state relations officer Jillian Carlson said there are some concerns with what would need to be factored into the funding model. Post-graduation income is one she identified as potentially posing an issue, as the universities work to meet workforce needs in rural areas where income is often lower.

“I think we certainly understand your guys’ desire to look at these performance metrics, but we do have some concerns with the metrics in the bill, particularly where they would conflict with state needs,” Carlson said.

As the Iowa House Higher Education Committee is “looking to create efficiencies,” Carlson said the board’s budget, investment and finance committee is “currently working on an efficiency review of all of our revenue” — an effort headed by Regent Kurt Tjaden.

Members of the subcommittee said they were surprised and disappointed to see little public comment during the meeting, with Rep. John Wills, R-Spirit Lake, saying he’s noticed a lack of participation in other subcommittees he’s sat on during this legislative session as well.

Rep. Heather Matson, D-Ankeny, was the only lawmaker on the subcommittee to not support the legislation, saying so after Rep. Taylor Collins, R-Mediapolis, didn’t answer her questions on what a performance-based funding model would look like from his perspective as the person who filed the bill.

“I think it probably goes without saying that I’m not going to be signing off on the bill today, mostly because of a lack of engagement in a conversation on what this bill actually entails and how it will practically work in the real world,” Matson said.

She also took issue with the potential funding model’s criteria, some which she said are out of universities’ control. If a student decides to move away from Iowa because it is what is best for them and their family, she said a university could be penalized through the funding model even though they couldn’t do anything to change that outcome.

Collins said the bill would not enact a new system for universities to follow but “seeks to align taxpayer investment with taxpayer return,” and to gather additional information for the General Assembly to potentially act upon.

Iowa needs to evolve, Wills said, and the Legislature can’t just keep going with the status quo.

“We need to become more efficient,” Wills said. “We need to look and research other opportunities and other ways of doing business, because sometimes the status quo, the way we’ve always done it, is not the best way.”

Iowa Capital Dispatch is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Editor Kathie Obradovich for questions: info@iowacapitaldispatch.com.