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Ryan Johnson, Published April 09 2013

Amendments take on ND higher ed funding formula

BISMARCK – New amendments in the Legislature could derail efforts to shift to a performance-based higher education funding system and lead to a funding crunch for campuses.

Kayla Effertz, a senior policy adviser to Gov. Jack Dalrymple, said the House Appropriations education subcommittee on Monday added several amendments to higher education funding bill Senate Bill 2003.

The new language cuts funding that would have covered increased costs for salaries, inflation, capital projects and other campus expenses over the next biennium, potentially trimming millions of dollars in payments to the institutions.

The House subcommittee’s work also struck out an amendment to the bill introduced in the Senate in February by Sen. Tony Grindberg, R-Fargo, which would provide money to the state Board of Higher Education to buy out the remaining contract of Chancellor Hamid Shirvani if members chose to do so.

The subcommittee also approved several amendments Tuesday morning to Senate Bill 2200, legislation that would convert the state’s higher education funding formula to a plan to pay campuses based on the number of credit hours completed rather than by student enrollment.

Effertz said Tuesday’s changes “basically take out all of the work of the formula” and instead would only allow a study of the formula change.

Rep. Bob Skarphol, R-Tioga, chairman of the House subcommittee, said the word cut is a misnomer.

“We’re just not giving them as much as the governor proposed,” he said.

“This is a process,” Skarphol said. “The House’s philosophy is different than others out there.”

Office of Management and Budget analyst Tammy Dolan said both bills need to move through the full House Appropriations Committee, likely within the next week, and the amendments could be stripped away or be sent along to the full House for a vote.

If the House approves the amended bills, Effertz said a conference committee would hash out differences between the House and Senate versions of the legislation before it could go to Dalrymple’s desk.

She said there were “a lot of questions” Tuesday about what the amendments would mean for this legislation and why such strong “opposition” was coming up against a funding formula with broad support from the governor, chancellor, campus presidents and several legislators.

Dolan said through the original funding formula, the individual campuses would share $55 million to pay for salary increases, operating inflation, rising health insurance premiums and other costs over the next two years. Another $21 million would serve as an “equalization payment” to balance out payments to campuses.

The amendments stripped this funding, replacing it instead with about

$12 million to be split among several of the campuses, and adding new limits to how much each campus can raise tuition to make up the shortfall.

“If it doesn’t cover the full costs, and they do need to give those salary increases and operating inflation, they would have to pull it from within their base budget,” Dolan said. “They’d have to cut somewhere else.”

Effertz said the amendments could cost some campuses millions – NDSU alone was set to gain about $6.7 million through those equalization payments. Still, she’s “confident” that legislators will find agreement on this issue.

“I think it’s important, though, to let people know that we’re trying to move forward for all campuses,” she said.

Readers can reach Forum reporter Ryan Johnson at (701) 241-5587