August 22, 2014

Work continues toward formula for higher education funding

Two legislative committees have revisited a model of what could go into a higher education funding formula that would include performance-based funding. 

A presentation that was first offered to the Joint Committee on Education last month was given to the House Budget Committee on Education and the Senate Education Committee on Wednesday.  The model is based on public hearings of the Joint Committee held last year, what education policy makers had to say, study of other states’ practices and reports and recommendations from more than two decades of earlier work by task forces, committees and commissions.

The model would have the state provide 35 percent of an institution’s operating costs. 10 percent of that would be tied to performance in five criteria.

See the model proposal for higher education funding in Missouri (pdf).

Joint Committee Chairman Senator David Pearce (R-Warrensburg) says people are anxious.

“In early October I had people come to me and want a spreadsheet. They wanted to know exactly how does this affect my college, where are we, and we hadn’t even finished the hearing process. So what we’re trying to do is to get an objective view … what do you think should go into a formula on performance funding? Then when you get all those ideas … you put the spreadsheet out and see how it affects the institutions, and believe me then there will be a lot more discussion after that.”

Pearce says creation of that spreadsheet will begin next month.

Representative Genise Montecillo (D-St. Louis) says she understands wanting to reward good outcomes, but she is worried about what the formula will mean for some community colleges.

“Those institutions that are struggling in some areas … how are they going to be able to improve their performance when we’re decreasing their funds which are already at very, very low dollar amounts?”

Joint Committee Executive Director Stacy Preis says one of the recommendations is the inclusion of a stop-loss provision.

“That would avoid large, sudden shifts in funding. A stop-loss is different from what you may be familiar with as a hold harmless provision in the K-12 formula in that a stop-loss guarantees a certain percentage of current funding. Not the absolute amount of current funding but that could be 95 percent, 98 percent, something like that.”

See what institutions said in reply to the funding model presented in December.

Preis expects one of the debates in the creation of a formula will be whether that performance-based funding is a bonus on top of a base appropriation.

“Is it important to us or not, to emphasize performance. If it is, then it is and if it’s just a bonus that will be nice if we have money then it’s just a bonus that will be nice if we have the money, but nothing makes it go away faster than having it just be considered as an add-on.”

Chairman of the House Budget Committee on Education, Representative Mike Lair (R-Chillicothe) says he doesn’t know which way he’s leaning on that debate yet.

“We’ve taken mountains of testimony … it’s to the point where we need to start making those decisions and then feed in the numbers, feed in the institutions and see how it runs.”

Lair says to have the proposal ready to employ in 2015, the legislature has to be developing it now.

“Especially when you see the way that our higher institutions of learning are spread around the state, everybody becomes very parochial with them. If anything looks as if it’s going to hurt theirs, then of course it becomes a negative, and so it could take two years to get it through.”

State lawmakers consider higher education funding formula proposal

A state legislative panel has gotten its first look at a proposal for a funding formula for the state’s colleges and universities.

The Joint Education Committee took testimony on a formula for higher education funding in hearings this summer and fall around the state.

Under the plan laid out for the Joint Committee on Education, the state would provide 35 percent of an institution’s operating costs. 90 percent of that would be automatic and 10 percent would be tied to whether it meets performance goals.

Committee staff executive director Stacey Preis says each of the state’s institution would have five measures to meet.

“The community colleges agree to sector goals such as three-year completion rate for first-time, full-time students. This includes degree or certificate completion or transfer to a four-year institution. Linn State Technical College includes things like job placement and improvements on professional and occupational licensure tests. The four-year institutions have opted shared goals that included freshman to sophomore retention or the successful completion of 24 credit hours in the first year for first time, full-time students.”

See the proposal for a foundation formula for higher education (pdf).

Committee chairman, Senator David Pearce (R-Warrensburg) says this formula will be different from the one in place for elementary and secondary education.

“Obviously when you have a formula for K-12 you’re looking at local support, those communities that have some local support, those that have none. So for public education what you’re trying to do for our K-12 institutions are to make them equitable so they can have the same education no matter where they are. For higher education we have different missions, we have different selectivity, we have different locations … so it’s a totally different thing.”

Pearce says it’s time to put a formula in place.

“Quite honestly we’ve just kind of limped along year after year after year when it comes to funding with no thought for performance, and so what this is, is a way to institute some performance standards of what we want to evaluate our colleges for.”

Pearce has asked higher education officials and others to comment on the formula proposal through the end of the month.

The committee must develop a formula by the end of 2013 that can be implemented in time for fiscal year 2015 appropriations.