Legislators are looking for an independent review of the University System's funding formula, which some say needs to be revamped to avoid major conflicts in the 2007 Legislature.

Some legislators want to abolish a system that compares North Dakota colleges and universities to out-of-state schools as a way to determine the amount each school receives for equity funding.

Others say the issues could be resolved by simply tweaking the formula or changing which out-of-state schools are on the lists.

Rep. Bob Martinson, R-Bismarck, said that if the system isn't changed, the Legislature could be faced with schools circumventing the university system's budget process and asking the Legislature for additional funding.

"If we go into next session using the same funding formula, it will be just an absolute mess, even worse than we had last session," Martinson said.

In the 2005 Legislature, there were bills requesting more funding for Bismarck State College, North Dakota State University and Lake Region State College in Devils Lake because those schools were determined to be the most underfunded based on the formula. The legislation created showdowns among legislators and higher education officials that prompted the Legislature to create a $2 million pool of money to improve equity among colleges and universities.

Sen. Tony Grindberg, R-Fargo, said it won't be easy to solve the problem because the equity issue has been around for a long time.

The Higher Education Roundtable, created by the Legislature in 1999, came up with a way to give the university system more flexibility with how it spends its money, while still being accountable to the Legislature.

Part of the roundtable's recommendations included a long-term funding formula that included equity.

"Equity is what founded the roundtable," Grindberg said.

Martinson said if the funding formula is not changed, the schools considered the bottom two or three in terms of equity will have a good chance of getting additional funding from the Legislature next time, a prospect he said could disrupt the process that was created by the roundtable.

The $2 million set aside for equity can't be distributed until January, and in the meantime, a study will be done to determine if the formula needs changes.

The Legislature's Higher Education Committee discussed the scope of the study, which will cost up to $175,000, on Tuesday in Bismarck.

Robert Potts, chancellor of the University System, didn't rule out changing the formula, but he said adjustments could provide a solution. "I think to go in with a preconceived viewpoint is not what the state board would recommend," Potts said.

Pam Kostelecky, president of the Board of Higher Education, said the long-term finance plan was meant to be updated no less than once every six years. She said the board has been studying the issue of comparing North Dakota schools to out-of-state schools for funding purposes.

Sen. Tim Flakoll, R-Fargo, said he would like the consultant that's selected to conduct the study to determine if the lists of peer institutions are acceptable and to identify a process to change the lists if needed.

Flakoll was a sponsor of legislation aimed at providing more money to schools for equity.

Requests for proposals will be sent out this month for the study, and a consultant could be selected by September.

The final report will be due by March 15.

(Reach reporter Tom Rafferty at 223-8482 or tom.rafferty@bismarcktribune.com.)