The difficult part of this enterprise is to tie the money to explicit measures of annual productivity. Many of the university's explicit outputs are many years in the making. Basic research produces useful results generations from now. The university's role in producing a better society is unquestioned, but also immeasurable and long term. To build a budget that directly links money and productivity we need measures to represent the long-term quality and impact of higher education.
Most legislatures focus on the undergraduate student when looking at performance budgeting.
Consider the medical services model. Medicine, like education, focuses on the individual, a patient. In education, we focus on an individual, a student. Medicine invented the notion of a covered life, which takes an individual and provides complete medical care for the individual' s lifetime at a fixed cost. At the University of Florida we focus on the covered degree, which provides the 120 credit hours of an undergraduate degree for a fixed cost measured in dollars per credit hour.