Divisive higher ed ‘cuts/reallocation’ bill a key step closer to Gov. Cox’s desk

Utah Gov. Spencer Cox is a step closer to having his say on a higher education “strategic reinvestment” bill that has divided Utah lawmakers, alarmed local academics and garnered national headlines.

House Bill 265 — which aims to maximize campus fiscal efficiency while improving alignment between the state’s colleges and industry — passed on the Senate floor Tuesday.

Because of substitutions updating the bill, HB265 is now expected to be back on the House floor and, if it passes, as expected, will move on to Cox’s desk.

Co-sponsored by Rep. Karen Peterson, R-Clinton, and Sen. Ann Millner, R-Ogden, the “Higher Education Strategic Reinvestment” bill has been championed by Republican leadership as a necessary step in ensuring wise use of tax dollars — while also facing criticism from colleagues across the aisle.

Peterson has said her bill asks a fundamental question of Utah’s degree-granting higher education institutions: “How do we make a good system better.”

And prior to the legislative session, House Speaker Mike Schultz told the Deseret News a reinvestment strategy is needed in higher education to scrap inefficiencies, counter rising tuition costs and loosen logjams in high-industry-demand majors such as nursing and engineering.

A few Republicans expressed concerns during the ongoing legislative session about a bill that calls for dramatic changes in operations at Utah’s eight public degree-granting institutions. But they have ultimately stayed within the partisan line, voting, to this point, to support HB265.

Meanwhile, advocates for liberal arts programs — which many worry would be vulnerable to upcoming reallocations — remain concerned. A college education enriched with the humanities, they argue, ensures that graduates enter the workplace armed with durable skills essential for long-term success across industries.

What does HB265 do?

HB265 would establish a strategic reinvestment fund for Utah’s eight degree-seeking colleges and universities. The state’s base budget approved by the Legislature in January removed $60 million from the combined budgets from the eight schools.

Each institution’s budget “cut” was different — accounting for, say, the size of each school’s student body and its unique institutional mission.

The University of Utah, for example, had $19.5 million pulled from its budget — while $12.6 million was withheld from Utah State University. Smaller, regional institutions Southern Utah University and Utah Tech University had $3.1 million and $2.5 million pulled, respectively. Meanwhile the state’s largest two-year institution, Salt Lake Community College, had $5.2 million removed from its annual budget.

But the dollars sliced from each school’s budget are not necessarily lost for good. Each institution, according to the bill, can recover their “cut” funds as they work through a detailed reallocation process.

The cash pulled from each of the schools’ respective budgets was moved to a “special projects fund” at the Utah Board of Higher Education, where it will go through a reallocation process as each college or university develops their own strategic reinvestment plans.

The institutions, according to HB265, would then present their respective strategic plans to the board in the coming months — and then ultimately to the Legislature.

The Legislature’s Executive Appropriations Committee would then have opportunities to review each institution’s reallocation plans.

“This allows for the institutions to develop their plans and then go back to the board and to the Legislature for approval to be able to move that money back into the budgets of the institutions,” said Millner on Tuesday during Senate floor discussion.

If HB265 becomes law, Utah’s higher education institutions would be required to initiate a process of evaluating several factors such as enrollment, high-demand programs and job outcomes of graduates.

That data would then inform their respective reallocation plans to identify optimized investment returns — moving funds from less effective programs to those that warrant additional investment.

The bill would allow the state’s university and college presidents to formulate a reinvestment plan at their individual schools, working within a matrix of several criteria rather than a single formulaic approach.

Bachelor’s degrees limited to 120 hours — with exceptions

Another key element of HB265 would limit bachelor’s degrees to no more than 120 credit hours — with allowances if programs require additional credit hours for accreditation or licensing.

There are also strategic planning allowances for nuances, such as the demand for durable skills that often come from general education and the liberal arts.

“These are three-year plans,” explained Peterson during a recent committee hearing. “We know that it takes some time to think about that. We want to ensure that students who have started programs don’t have the rug pulled out from underneath them; that they can complete the programs that they’re in.”

Each year, Peterson added, lawmakers will check with the state’s higher education institutions as they implement their reallocation strategies — while examining evolving student needs, interests and trends.

The institutions would be required to progressively reallocate funds — 30% by 2026, 70% by 2027 and 100% by 2028.

Worries over liberal education vs. general education

The higher education’s strategic reinvestment bill began feeling pushback months before the 2025 Legislature began — with opponents voicing concern about liberal education opportunities being eliminated to move dollars to degree programs perceived to be better aligned with industry.

Utah educators formally joined that debate on earlier committee hearings.

During Peterson’s Feb. 19 bill presentation in front of the Senate Education Committee, Brianne Kramer, representing the American Federation of Teachers-Utah College Council, said that HB265 could harm sectors of the workforce in communities in which colleges and universities are major employers.

Utah’s college students, added Kramer, could also find themselves on the business end of cuts to instructional programs.

“Students (would) lose opportunities to choose the majors and minors that they want and that are best suited for their careers, interests and passions; and they also lose opportunities to take a broad range of classes.”

Other students, she added, would also be burdened with finding money to relocate in order to pursue their chosen degrees if study programs are cut from their local colleges.

In response to concerns about protecting core general education programs, Millner recently modified HB265.

“We want our students to be critical thinkers, problem solvers, communicators, team players, etc.” she said.

The substitute bill, Millner noted, “Adds an amendment to say we want to make sure we are maintaining a core general education to help students develop all these skills.”

Calls for broad involvement in reinvestment decisions

At a Feb. 26, discussion on the Senate floor, Sen. Karen Kwan, D-Murray, appealed unsuccessfully for an amendment to be added to HB265 ensuring that broad campus communities are included in reallocation decisions.

“The (Board of Higher Education) could and should consult with some of the experts who are in the field — like the presidents of each institution and the faculty, staff and students,” said Kwan.

“(My) amendment adds in language to codify that the Board should consult with these constituent groups.”

Millner resisted Kwan’s amendment, saying the reinvestment decisions outlined in the bill are already designed to be made at the institutional level. “I do not know a single president that won’t engage campus-wide discussions about the decisions that they make — which allows faculty, staff and students to have input at the institution level.”

Outspoken HB265 opponent Sen. Kathleen Riebe, D-Cottonwood Heights, countered that the Legislature’s recent elimination of collective bargaining for public labor unions in Utah nixes assurances that “faculty, staff and presidents” would be part of the reinvestment process.

“Providing these people with a voice would be inserting some of that back in so that we could have good discussions on how working conditions are being impacted by this drastic cut,” said Riebe.

HB265: A national template for higher ed reinvestment?

Utah’s higher education strategic reinvestment bill is gleaning attention beyond the Beehive State’s borders.

An article last month in Forbes suggested that HB265’s “unique approach; involving the reallocation and subsequent reinvestment of millions of appropriated dollars” might offer a template for other states.

“As more state legislatures look for ways to shape academic programs and direct the curricula at public colleges and universities, HB265 could become their model,” the Forbes article noted.

“Universities might not like it because major restructuring always carries both expected and unanticipated costs, and it will force difficult choices by campus leaders.

“Still, the bill represents a relatively calibrated attempt to influence academic priorities that may find support across the political spectrum.”