That's certainly the talking point we hear coming from NDSU's leadership, but it doesn't pass the smell test for two reasons.
First, the "peer university" metric is a poor one. Each university has its own unique set of circumstances when it comes to educating students. Just because another state increases funding to one of its universities doesn't automatically mean we have to increase ours. We should care about what NDSU really needs, not what some other university gets.
Second, and more importantly though, is the fact that North Dakota spends more per capita on higher education than any other state in the nation. According to research done by Legislative Council, higher education spending is 18.3% of our state budget.
http://sayanythingblog.com/entry/higher-education-spending-is-18-3-of-north-dakotas-budget/
That's a higher portion than Minnesota, Colorado, South Dakota, Montana, Nebraska and Idaho (if you want to talk about peers). And which university gets the lion's share of that funding? NDSU.
Though don't get me wrong. This isn't a NDSU problem. This is a higher education problem. They get too much money, and they spend it stupidly.