Arizona's governor is eager to see universities rewarded for improving their graduation rates, but one of her top aides warns that another facet of a wide-ranging plan to reconsider university funding strategies may be too ambitious.

Gov. Janet Napolitano said yesterday that an Arizona Board of Regents proposal to offer universities financial incentives to raise graduation rates would improve the state's economy by preparing more students for high-wage jobs.

But at least one other hallmark of a plan to restructure state mechanisms for funding the university - a threefold increase in taxpayer-funded financial aid - may need to be enacted more gradually than universities hoped, said George Cunningham, Napolitano's deputy chief of staff for finance and budget.

Still, the governor's office appears generally receptive to the plans, which could bring millions more into university coffers in coming years.

They would reward universities by paying them not just when more students enroll but when they achieve specific goals like raising graduation rates, especially in high-demand fields like nursing, education and engineering.

That will likely come as good news to the regents, who will meet today to discuss the lawmakers' reactions to the potential changes and perhaps come a step closer to formally asking the Legislature and governor to enact them.

Though the regents have worked all semester to outline new means for funding the universities, because the Legislature and governor allocate money, regents must win support from those officials before new funding plans can be implemented.

Their proposal would fund the universities $1,000 for each bachelor's degree above the previous year's total, and $1,500 and $2,000 for each master's degree and doctorate, respectively.

Those numbers would be doubled in high-demand fields, such as education, nursing and engineering.

Though Napolitano hasn't seen that specific proposal, she lauded the idea of rewarding universities for improving graduation rates.

"I think the effort of the universities to kind of hold their feet to the fire in terms of increasing the percentage of graduates is going to pay off for us in the long term," she said.

The universities should also take into account the number of students who graduate in four years, rather than five or six, said Cunningham, who met with regents and officials from the universities to discuss the plans.

However, the proposal to increase the state's contribution to student aid by $6 million in 2006 and more in subsequent years could prove too costly to implement without gradual steps, he said.

If lawmakers adopt the financial aid proposal, about $22 million will be available in 2015, about $13 million more than under current mechanisms.

That money would come from taxpayers, though, and some legislators have warned they might not be willing to give so much to the universities when other state agencies need money as well.

Regents haven't discussed this specific plan, but one that was slightly different won support from President Peter Likins and regents at the last board meeting.

"If we get this done and nothing else, that would be gigantic," he said.

Still, Cunningham described as reasonable most ideas for revamping university funding.

The immediate impact of those changes wouldn't be earth-shattering for the UA - a regents' document estimates it at between $1.3 million and $3.1 million more than current means would yield.

But they would revise a long-standing policy that increases university funding solely based on how quickly the student body grows and reward schools for achieving their individual missions, said UA Budget Director Dick Roberts.

In the long term, that could mean that even as UA enrollment levels out, its state funding levels could continue to grow.

The board of regents meets today at Arizona State University.