For months, Utah’s higher education leaders have prepared for the budget cuts state lawmakers warned about. The conversations included discussion of reallocating those funds to invest more in high-performing programs or taking money away from college programs deemed less effective. It’s expected to be one of the Legislature’s biggest issues.
Top higher education leaders appeared optimistic in advance of the start of the legislative session. Gathering at the Hinckley Institute of Politics on Jan. 16, Utah’s Commissioner of Higher Education Geoffrey Landward and University of Utah President Taylor Randall said they appreciated their seat at the table and felt like lawmakers were responsive to their feedback. Their positive feelings were based on conversations with state lawmakers, but they hadn’t seen the exact bill’s language yet.
Now the bill is here.
HB265, the “Higher Education Strategic Reinvestment” bill sponsored by Republican Rep. Karen Peterson, lays out a proposed framework for what that process will look like.
Back in December, Peterson explained to KUER, the Executive Appropriations Committee shifted about $60 million from higher education budgets and moved it into a “reinvestment fund.”
Out of the states's 16 public institutions of higher education, including colleges, universities and technical colleges, there are eight degree-granting institutions. The budget cut is only for the degree-granting schools: Salt Lake Community College, Snow College, Southern Utah University, University of Utah, Utah State University, Utah Tech University, Utah Valley University and Weber State University.
That $60 million, Peterson said, represents 10% of each school’s state-funded budget for instruction. For smaller institutions, like Snow College, that’s in the range of $1 million. For large schools, like the University of Utah, it’s closer to $20 million, according to Peterson.
This deduction, she said, is for the fiscal year 2026 budget that starts July 1.
The money, she said, is still earmarked for the institutions that they were deducted from. The idea is to encourage the schools to create a reinvestment plan to get the money back, one that will need approval by state leaders.
Schools will need to look at enrollment data, completion rates and timely completion, professional outcomes, both current and future statewide workforce demands, program-level costs and the institution's mission and role. Based on that information, programs, degrees, courses or administrative functions that merit further investment will need to be identified. Similarly, the institution will also need to identify reductions or program eliminations so it can shift funds.
“This is a very institution-specific plan,” Peterson said. “It’s not the same plan for every school, which I think is also important.”
Before the 2025 fiscal year ends on June 30, the Utah State Board of Higher Education would need to establish standards for the reallocations and provide guidance.
Peterson anticipates that colleges would then present their plans to the board in late June or early July for approval. Then go before the Higher Education Appropriations Subcommittee in August and the Executive Appropriations Committee in September. If a school’s plan meets all of the requirements and gets approved by the necessary bodies, Peterson said the Executive Appropriations Committee can release the funds back to the institution.
Peterson’s bill allows for some flexibility, for example, if a school needs time to phase out a program so that current students can graduate. In the first couple of years, institutions can get all of their money back even if all of the funds don’t go toward the new focus. For the fiscal year 2026, only at least 30% of the reinvestment funds have to go toward the new strategic investments plan. Everything has to be correctly allocated according to the plan by the fiscal year 2028.
Since the 10% instruction budget deduction is for the fiscal year that starts in July, if everything goes according to plan, schools should be able to get their funds back later in September, Peterson said.
“We've been working with our college presidents, we've been working with the system of higher education, our commissioner's office,” she said. “A lot of people have weighed in on how this process should move forward, and so this bill is kind of a result of all of that work and collaboration.”
This reallocation process would run for three years and requires institutions to report their progress along the way. After that, individual programs would then be required to be reviewed every five years so that the board can identify what’s underperforming or needs more investment.
“We want to make sure that this is an ongoing conversation,” Peterson said.
Her bill also puts a cap on the length of time it takes to earn a degree. An institution can not offer a degree that requires more than 120 total credit hours. The state board, however, can authorize certain degrees to be no more than 126 credit hours. Two years ago, the Utah Board of Higher Education moved to reduce the number of required general education classes by setting a cap of 27 or 30 credit hours.
“We need higher education in Utah. It's incredibly important,” Peterson said. “This initiative is all about making sure every dollar counts. It’s not about cutting but just really ensuring that every dollar we’re investing counts and that we’re getting the best outcomes we can as a state, on behalf of our students and on behalf of our economy.”
Editor’s note: KUER is a licensee of the University of Utah but operates as an editorially independent news organization.