1. Texas Higher Education “Formula Funding 101”
Kathryn Funk-Baxter
Senior Associate Vice President for Finance & Administration
Texas A&M University-Corpus Christi

2. Flow of funds to universities
Funds flow to institutions of higher education in a number of ways:
Direct Appropriations-Formula funds and other direct appropriations based on identified needs
Special Items
Indirect Appropriations-not made directly to institution in its portion of bill but used to cover costs related to health insurance, retirement, and social security
Other Indirect Appropriations
Higher Education Fund
Higher Education Performance Incentive Funds
Dramatic Nursing Shortage
Can you add word for ss? Done

3. Significance of Funding Formulas
Kem could you put all the formula and appropriation pieces together so if you wanted you could draw a line on them? Done
Restricted income is that special items? No--Grants, contracts and gifts
Can we just call it that-Special Items are in State Funded Non-formula-changed the descriptor
also use various colors too blue blue
18% of TAMUCC budget is formula funding

4. Formula Funding Two funding formulas and two supplements:
Instruction and Operations Formula
Teaching Experience Supplement
Infrastructure Formula
Small Institution Supplement

5. How does the formula generate Instruction/Operations funds?
Two basic concepts:
Weighted Semester Credit Hours
Base Period

6. Distribution of I/O Formula Funds to Texas Institutions of Higher Education
Source: LBB Biennium

7. The Instruction and Operations Formula

8. What functions is it designed to fund?
Faculty salaries
Departmental operating expense
Library
Instructional support
Research enhancement
Student services
Institutional support

9. The Importance of Credit Hours
The two formulas are driven solely or partly by semester credit hours taught.
The Instruction and Operations formula is driven totally by credit hours.
The Infrastructure Support formula, in addition to credit hours taught, includes academic program mix, staff size, research expenditures, and Library collection size.
The supplements are driven by sch and headcount.
The Teaching Experience supplement is driven by the number of undergraduate credit hours taught by tenured or tenure- track faculty.
The Small Institution supplement is given to schools with less than 10,000 students.
Infrastructure also is a factor or our predicted space ???

10. The Financial Importance of Instruction
The important research and service missions of the university bring with them virtually no direct formula funding. Special Items and Research Development Fund appropriations can provide funding for these activities.
From the formula’s perspective, teaching generates semester credit hours and that counts in generating most of our state formula funding.
Add again how much of the total income comes from the formula funds in bullet two?

11. The “Base Period”
The base period is the 12 month period used to measure the SCH to be included in the appropriations formulas.
It is the summer and fall of even numbered years and the spring of odd numbered years.
This “base period” provides the most recent year of semester credit hour data available when the legislature meets in the spring of odd numbered years.
Base period SCH determines formula appropriations for the next two years.

12. What are weighted credit hours?
We are funded by the number of credit hours we teach in the base period, but not all credit hours are funded at the same dollar value.
Conceptually, the formula weighting is supposed to reflect the differences in cost related to teaching courses at different levels and in different academic fields.
Graduate courses, for example, are expected to be taught in smaller class sections than undergraduate classes so graduate credit hours are weighted heavier than undergraduate credit hours.
Semester Credit Hours X Program/Level Weight X Rate ($62.19)

13. What are weighted credit hours?
Courses in different fields are also weighted relative to each other.
For example, a credit hour in a lower division History course earns less formula funding than that of a lower division course in Art or Engineering.
All these weightings are displayed in a chart called the “Formula Matrix”.

14. THECB Weighting Matrix
Lower Div.
Upper Div.
Masters
Doctoral
Special Prof.
Liberal Arts
1.00
1.72
4.18
9.29
Science
1.71
2.97
8.09
20.52
Fine Arts
1.39
2.32
5.43
7.19
Teacher Education
1.42
1.74
2.48
7.64
Agriculture
1.87
2.52
7.07
9.91
Engineering
2.41
3.87
7.63
15.96
Home Economics
1.06
1.70
2.86
6.62
Law
3.86
Social Services
1.94
2.05
13.84
Library Science
1.14
1.09
2.63
6.65
Vocational Training
1.66
1.97
Physical Training
1.29
1.28
Health Services
1.24
1.98
3.21
8.49
Pharmacy
0.71
4.24
19.87
29.55
3.79
Business Administration
1.11
1.73
3.42
24.27
Optometry
5.46
19.12
7.00
Teacher Ed Practice
1.30
1.78
Technology
1.90
2.38
4.41
3.37
Nursing
2.45
4.73
10.64
Developmental Ed
Veterinary Medicine
16.53

15. Weighted Credit Hours
Weighted credit hours are credit hours taught multiplied by the weighting matrix
For example:
A 3 hour lower division history course with 20 students enrolled would generate 60 weighted SCH (20 students x 3 SCH x 1.00 weight).
A 3 hour masters level business course with 20 students enrolled would generate 205 weighted SCH (20 students x 3 SCH x 3.42 weight).
A 3 hour doctoral education course with 20 students enrolled would generate 458 weighted SCH (20 students x 3 SCH x 7.64 weight).

16. Getting from weighted SCH to Instruction & Operations income
Each biennium, the appropriations act specifies the dollar value of each weighted semester credit hour.
For FY 2010, the value is $62.19 per weighted SCH .
So, looking at our examples again:
The lower division History course earned $3,731 (60 wsch x $62.19).
The Masters Business course earned $12,749 (205 wsch x $62.19).
The Doctoral Education course earned $28,483 (458 wsch x $62.19).

17. Teaching Experience Supplement

18. Teaching Experience
This is a simple add-on to the Instruction and Operations formula.
It provides an extra 10% formula income bonus for undergraduate credit hours that are taught by tenured and tenure track faculty.
The intent is to reward institutions for NOT using TA’s and Adjuncts to teach undergraduates
Now you have to add small institution supplement and how it was arrived at since NEW funds. Probably should mention this is new for
Also should we add that RDF is actually a formula of sorts too? When we did 2007 presentation we did not have RDF but got it another way?

19. Distribution of Infrastructure Formula Funds to Texas institutions of Higher Education
Source: LBB Biennium

20. Infrastructure Support Formula

21. Infrastructure Support
Funded on a space-need projection model developed by the Coordinating Board
Not on the space you actually have
The model has various dimensions:
Teaching Space
Library Space
Research Space
Office Space
Support Space
Utilities

22. Small Institution Supplement

23. Small Institutions
This is a simple add-on to the Infrastructure formula.
It provides extra funds to institutions with fewer than 10,000 students.
The intent is to provide space support equity to the smaller institutions.
Now you have to add small institution supplement and how it was arrived at since NEW funds. Probably should mention this is new for
Also should we add that RDF is actually a formula of sorts too? When we did 2007 presentation we did not have RDF but got it another way?