Regents approve performance funding model

The Arizona Board of Regents (ABOR) today approved a performance funding model to be used in the allocation of $5 million appropriated in the recently-enacted state budget for fiscal year 2013. The funding model approved today is identical to the model that was transmitted to the Legislature and Governor on October 1, 2011. The new output-driven model rewards the universities in proportion to their gains in producing more degrees, more completed student credit hours, and more externally-financed research and public outreach expenditures. The Board action awarded $2.6 million to Arizona State University, $1.4 million to the University of Arizona, and $1.0 million to Northern Arizona University.

In reaffirming their support of the previously-approved performance funding model, the Regents noted that in response to legislative intent language contained in the FY13 budget the Board intends to give extra weight in future budget requests to science, technology, engineering and mathematics (STEM) degrees and other degrees deemed high value from an economic development standpoint. Under that scenario, the universities will be able to earn even greater performance awards to the extent they produce in those designated areas. The new model will be utilized by the Board and universities in developing their budget request for FY14, which will be due to the Governor and Legislature on October 1, 2012.

“Performance funding is an innovative approach that will allow the state to target its investment in higher education toward degrees and research activity that are supportive of the state’s economic development goals,” said ABOR Chair Rick Myers. “This model should be used as a workforce development and business recruitment tool to incentive greater productivity in the areas business need most.”

The Board also approved the final allocation of monies appropriated as the first installment of parity funding, intended to eliminate a longstanding funding inequity for ASU and NAU as compared to the UA. The state budget for FY13 appropriated $15.3 million to the Board for allocation to ASU ($12 million) and NAU ($3.3 million) as the first phase of a multiyear commitment with the remainder of necessary parity funding to be appropriated in roughly equal installments between FY14-17.