In building a performance budget for undergraduate instruction, we ask that the state fund those credit hours taught by the university that number less than 132 for each individual student. In this proposed shared responsibility model, the state funds the majority of the cost of the degree, the university delivers the degree within the cost, and the student follows the program needed to earn the degree within the allotted hours. Consequently, this model works as well for the student who finishes in four years as it does for the student who attends half time and finishes in eight years. In this instructional performance model we do not pay direct attention to quality, only to costs, which is the purpose of an annual performance-based budget. Quality measurement in education, as in health care, depends on a separate evaluation that measures longer-term outcomes such as student and alumni satisfaction, employment, entrance into graduate school, and performance on professional certification exams.
Research represents the university's second major product.
The state invests tax dollars in a research university's program of discovery to enhance teaching, contribute to the international store of knowledge, and serve the economic interests of the state and nation. An effective measure of return on this investment in research is the amount of the contract and grant revenue generated by research relative to the state's tax dollar investment in the university's research enterprise. Contract and grant dollars come from national or international competition and serve as an indicator of the quality, productivity, and significance of our faculty's work. If the ratio of directly funded university research falls relative to externally funded research, then the state can adjust its performance budget for research downward to restore the proper return on its research investment. The university exists primarily to teach and do research.