SALT LAKE CITY — State lawmakers are considering a proposal that they say would encourage public colleges and universities to use tax dollars more frugally in building new structures by changing the way those buildings are funded.
The discussion is headed by Sen. Steve Urquhart, R-St. George, who raised the possibility early this year of getting the Legislature “out of the building business” by allocating money for capital projects on a per-student basis rather than by individual projects.
It’s a reminder for lawmakers and college leaders that educational quality should come before lofty atriums, but the current process engenders otherwise, he said.
“As a Legislature, we value brick and mortar more than we value accountability in our higher education system. Our money shows that. That is what we value — brick and mortar over what goes on in the brick and mortar,” Urquhart said. “That’s a real problem we face in dealing with higher education. Those are the incentives we hang out there.”
The Education Interim Committee considered an early proposal from Urquhart on Thursday to allocate capital funding to each institution on a yearly basis. One possibility would be to take the 20-year funding average for higher education capital facilities, currently about $82 million, and distribute it among institutions based on various needs.
The yearly amount for each campus could be determined with current enrollment, projected enrollment growth, degrees awarded, square footage of facilities and other possibilities.
Institutions could use the money each year to make needed upgrades of existing facilities, or they could let the money accumulate over several years to pay for a new building, coupled with private donations, Urquhart said.
“What I’m proposing is that we have a building fund for our higher education institutions. The Legislature puts in a certain amount of money, and ideally, we’d put ongoing money into that and build it up,” he said. “If we have the right formula in place, then they will try to leverage those dollars to go out and get private donations and will build frugally. They will try to get as much out of those dollars as they possibly can.”
The current process for funding new college buildings usually happens on a project-by-project basis. Institutions identify capital needs on their campuses, then make requests to the Utah Board of Regents. The board then prioritizes several capital projects and makes a recommendation to the Legislature, with the expectation that not all buildings will be funded.
The Legislature ultimately provides at least partial funding for a select number of projects. Last year, the Board of Regents requested almost $250 million for nine capital priorities, and the Legislature appropriated $83.4 million for four buildings.
“What this system means is the institutions come and they want the big building, and the bigger, the better. So it’s an opportunity really to sit on Santa’s lap,” Urquhart said. “Conceptually, a better system would be for the institutions to have more direct responsibility for the money, rather than putting all their eggs in one basket and going for the biggest, shiniest building.”
David Buhler, commissioner of higher education, said the proposal is “an interesting concept,” but since the discussion is still young, institution leaders haven’t been able to explore the implications of it and what unintended consequences might arise.
“We’re at a very early stage here,” Buhler said. “This is a different kind of beast. This is an example of how it might work. It really (depends on) whether the Legislature wants to go this way, and if they do, we really appreciate the opportunity to have a seat at the table.”
Buhler said he hopes lawmakers will keep in mind that college enrollment in Utah is projected to increase by 50,000 students in the next decade, and that growth looks different at each institution. If the proposal was adopted, institutions would have to be able to depend on yearly appropriations to be able to plan and carry out capital projects, he said.
“What would be really detrimental is if this were set up, institutions are counting on it, and we have a downturn and it’s not funded one year,” he said. “You’re ready to break ground, but the money’s not there.”
Members of the Education Interim Committee were supportive of the concept, though some questions remain about how such a formula would work. Rep. Lowry Snow, R-Santa Clara, said if the Legislature could guarantee yearly funding for a higher education capital fund, it could create more assurance and consistency than the current system.
“From an administration standpoint, it takes the uncertainty out of the process, so they’re not spending their time in an effort and in stress wondering whether they’re going to be able to accomplish what they need,” Snow said. “This money will be there. They can count on it. I think it will help them manage their capital facilities.”
Sen. Howard Stephenson, R-Draper, said lawmakers should also consider the fact that more college courses are being offered online, which could replace physical square footage needs with server space.
“This may work for a while, and I think we should do it. But as the world changes, and disruptive technologies continue to disrupt higher education, we’re moving in a world where we’re just getting certifications and (being) respected for what we know and can do, as opposed to how long we’ve sat in a higher education institution,” Stephenson said. “Sooner or later, in the next 10 years, this might be obsolete because we have a lot of empty buildings.”