1Texas Higher Education “Formula Funding 101” Kathryn Funk-BaxterSenior Associate Vice President for Finance & AdministrationTexas A&M University-Corpus Christi
2Flow 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 needsSpecial ItemsIndirect Appropriations-not made directly to institution in its portion of bill but used to cover costs related to health insurance, retirement, and social securityOther Indirect AppropriationsHigher Education FundHigher Education Performance Incentive FundsDramatic Nursing ShortageCan you add word for ss? Done
3Significance 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? DoneRestricted income is that special items? No--Grants, contracts and giftsCan we just call it that-Special Items are in State Funded Non-formula-changed the descriptoralso use various colors too blue blue18% of TAMUCC budget is formula funding
4Formula Funding Two funding formulas and two supplements: Instruction and Operations FormulaTeaching Experience SupplementInfrastructure FormulaSmall Institution Supplement
5How does the formula generate Instruction/Operations funds? Two basic concepts:Weighted Semester Credit HoursBase Period
6Distribution of I/O Formula Funds to Texas Institutions of Higher Education Source: LBB Biennium
8What functions is it designed to fund? Faculty salariesDepartmental operating expenseLibraryInstructional supportResearch enhancementStudent servicesInstitutional support
9The 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 ???
10The 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?
11The “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.
12What 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)
13What 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”.
15Weighted Credit HoursWeighted credit hours are credit hours taught multiplied by the weighting matrixFor 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).
16Getting 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).
18Teaching ExperienceThis 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 undergraduatesNow you have to add small institution supplement and how it was arrived at since NEW funds. Probably should mention this is new forAlso 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?
19Distribution of Infrastructure Formula Funds to Texas institutions of Higher Education Source: LBB Biennium
21Infrastructure Support Funded on a space-need projection model developed by the Coordinating BoardNot on the space you actually haveThe model has various dimensions:Teaching SpaceLibrary SpaceResearch SpaceOffice SpaceSupport SpaceUtilities
23Small InstitutionsThis 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 forAlso 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?