Funding Host State Regulatory Activities. 2 While XXXX will need to cover the on-going costs of its internal operations, the income model 3 also takes into account the shift in activities that will occur in each of the individual state 4 regulatory offices for states participating in the compact. XXXX shifts the oversight of 5 institutions to the institution’s home state. For some states, this will mean a loss of revenue 6 from fees charged to out-of-state institutions. Additionally, the host state retains some 7 responsibility to assist regulatory agencies from partnering states in particular circumstances. 8 While acknowledging that state regulatory offices have widely differing financing models, the 9 proposed XXXX financing model seeks to assist host states in funding these responsibilities. 11 One of the goals (but certainly not the only goal) of the fee is to help states replace funds lost due 12 to participating in reciprocity. To obtain a grasp on the level of institutional fees required, we 13 created the following very conservative scenario. Minnesota and Missouri had regulatory 14 members on the Drafting Team, so we used them as examples. The Minnesota Office of Higher 15 Education has registered 73 regionally-accredited institutions and the Missouri Department of
Funding Host State Regulatory Activities. While XXXX will need to cover the on-going costs of its internal operations, the income model also takes into account the shift in activities that will occur in each of the individual state regulatory offices for states participating in the agreement. XXXX shifts the oversight of institutions to the institution’s home state. For some states, this will mean a loss of revenue from fees charged to out-of-state institutions. Additionally, the host state retains some responsibility to assist regulatory agencies from partnering states in particular circumstances. While acknowledging that state regulatory offices have widely differing financing models, the proposed XXXX financing model seeks to assist host states in funding these responsibilities. One of the goals (but certainly not the only goal) of the fee is to help states replace funds lost due to participating in reciprocity. In order to project the level of institutional fees required, we created the following very conservative scenario using Minnesota and Missouri as examples: The Minnesota Office of Higher Education has registered 73 regionally-accredited institutions and the Missouri Department of Higher Education has licensed 53. To make the estimates more conservative, we counted only regionally accredited institutions. If only half of their regionally- accredited institutions decided to participate, and each institution pays $5,000 annually, the Minnesota institutions would pay $182,500 and the Missouri institutions would pay $135,000. All of these funds could be distributed to other states. Even with this modest fee and modest participation, substantial funds could be raised to assist the state regulatory offices. This model agreement envisions that the Commission will develop a sliding scale based upon the number of students that an institution serves in a host state. For example, the fees might be divided by levels, such as 1-100, 101-250, and 250+ separate student enrollments in a host state in a year. Specific definitions of enrollments, time periods, and rates will need to be developed. The financial proposal should meet the following goals for state regulatory agencies: Replace funds that some state regulatory agencies will lose due to the reciprocal agreement. Assist state regulatory agencies in performing the new duties required through this agreement by imposing a user fee on the institutions that decide to operate in this state.
