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Performance-Based Funding

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Presentation on theme: "Performance-Based Funding"— Presentation transcript:

1 Performance-Based Funding
Tennessee and Louisiana SAIR 2013 Edwin Litolff – University of Louisiana System Greg Schutz – Tennessee Board of Regents

2 Performance-Based Funding Across the States
In Place 22 In Transition 7 In Planning 10 Total 39 PBF 2.0 Progression Completion Mission Subpopulations Source: PBF: The National Landscape. Sept Univ. of Alabama Education Policy Center

3 Louisiana – Formula Funding Introduction
Louisiana Constitution, Article VII section 5.D.4-authorizes the Board of Regents to formulate and revise a master plan for post secondary education. Included in this master plan shall be a formula for equitable distribution of funds to the institutions of postsecondary education. Targets appropriate funding levels for institutions based upon peer data. Encourages and rewards indentified behavior on part of institutions. Includes a performance factor related to retention and progression of students. will be the sixth year of implementation, modifications are still being made to improve results.

4 New Formula Funding Approach
Two Primary Goals Cost of delivery and performance Cost Component (85%) Core – Cost of disciplines and academic support General Support – Institutional support and student services Operation of Plant and Maintenance – Physical academic and support facilities Performance (15%) Alignment with Grad Act targeted student success metrics

5 Formula Basic Factor Chart – Student Credit Hour Value SREB 1 SREB 2
Average SREB Faculty Salaries & Benefits $93,160 $83,509 $70,098 $68,300 Average Class Size 25 Full-Time Student Workloads 30 Instruction Amount $124.21 $111.35 $93.46 $91.07 Academic Support/ Services 30% Academic Support Amount $37.26 $33.41 $28.04 $27.32 Total Base SCH Value $161.47 $144.76 $121.50 $118.39

6 Cost Matrix Group Formula Group Name LLU Factor ULU Factor Masters Factor Doctoral Factor Spec Prof Factor 01 Liberal Arts 1.00 1.96 3.94 12.04 4.05 02 Science 1.53 3.00 7.17 19.29 03 Fine Arts 1.85 3.11 6.51 17.47 04 Teacher Education 1.28 3.23 9.95 3.36 05 Agriculture 2.05 2.54 6.64 16.37 06 Engineering 3.01 3.46 8.20 21.40 07 Home Economics 1.58 2.12 4.34 10.79 08 Law 3.22 09 Social Science 1.64 1.84 5.80 11.92 10 Library Science 1.45 1.52 4.22 12.26 13 Physical Training 1.36 14 Health Science 2.87 6.47 15.98 15 Pharmacy 4.00 4.64 7.55 19.11 13.43 16 Business Administration 1.41 1.59 4.59 13.91 17 Optometry 1.99 2.56 5.46 19.12 7.00 19 Technology 6.61 20 Vocational Training - Skilled Trades 1.55 3.43 9.34 21 Vocational Training - Precision Trades 1.70 2.07 4.55 12.39 22 Vocational Training - Transportation 3.59 4.35 9.59 26.09 96 Veterinary Medicine 13.63 97 Other 98 Military Science 99 Nursing 3.12 5.32 6.49 16.32 Average 1.88 2.52 5.24 13.66 5.85 Developmental Education = 1.45

7 Student Credit Hours Course Num Description Sec SCH Students DEV Lower Upper Mast Doc BIOS 1053 Contemporary Biology 1 819 273 573 246 ENEE 2582 Digital System Design 123 41 15 105 3 $ Base SCH Value x 573 SCH’s x LL Science 1.53 = $126,909 $ Base SCH Value x 246 SCH’s x UL Science 3.00 = $106,833 Total $233, 742 $ Base SCH Value x 15 SCH’s x UL ENG 3.01 = $6,535 $ Base SCH Value x 105 SCH’s x UL ENG 3.46 = $52,591 $ Base SCH Value x 3 SCH’s x UL ENG 8.20 = $3,561 Total $62,687

8 Formula Funding Matrix - Example
Formula Funding Spreadsheet Total SCH Production 261,667 Core Component $98,071,579 Core Component EOC $90,311,809 General Admin and Operational Costs Total Dollars $114,084,325 State Share 42% Formula Request $47,915,417

9 Additional Performance - Added
Pell Enrollment – 5% Research - 2% Workforce - 3%

10 Distribution Formula Units – Colleges and Universities
Non-Formula Units – Systems, Ag, Law, LOSFA Preliminary Board of Regents Allocation 15% Performance Maximum -4% loss 2Year/4 Year Shift 10% Performance (Pell, Research, Workforce) Total Formula Distribution for $500 million

11 Formula Summary Total Cost $1.9 billion State Share $868 million
Appropriation $500 million

12 UL System Total Operating Budget FY 2013/14 State Funding Trend

13 Average System Tuition
63% Increase

14 Performance Funding in TN
Higher Education in TN TN Funding Context TN Outcomes-Based Funding Current Situation Tomorrow’s Opportunity

15 TBR Fall Enrollment Trend
* Fall 2013 does not include session II enrollment at APSU’s Fort Campbell campus. Source: State Enrollment Collection for Census Date Enrollment

16 TN Colleges of Applied Technology Enrollment Trends
Source: TBR TCAT Collection for End-of-Year Enrollment

17 Funding Tennessee Higher Ed
Public Universities Pre Stimulus ARRA Post Stim State Appro-priations 739,999,930 694,121,096 735,872,025 499,875,300 499,157,829 Non-Recur-ring(ARRA/MOE) 190,802,900 Tuition & Fees 531,226,348 708,690,255 806,781,507 964,471,009 1,054,848,105 FTE 97,141 102,726 107,394 116,995 118,127 Avg Student Support 13,086 13,656 14,364 14,147 13,155 Student Share 41.8% 50.5% 52.3% 58.3% 67.9% All years equated to dollars / Source: THEC Student Support Historical Analysis ARRA =American Recovery & Reinvestment Act / MOE=State Maintenance and Operating Expenses

18 Funding Tennessee Higher Ed
Public Two-Year Colleges Pre Stimulus ARRA Post Stim State Appro-priations 248,683,595 232,877,040 224,020,518 185,851,200 187,614,232 Non-Recur-ring(ARRA/MOE) 45,671,600 Tuition & Fees 115,865,180 170,249,534 188,705,764 269,952,100 282,601,142 FTE 46,349 49,238 49,193 62,758 6,086 Avg Student Support 7,865 8,187 8,390 7,991 7,698 Student Share 31.8% 42.2% 45.7% 53.8% 60.1% All years equated to dollars / Source: THEC Student Support Historical Analysis ARRA =American Recovery & Reinvestment Act / MOE=State Maintenance and Operating Expenses

19 Funding Tennessee Higher Ed 2013-14
Formula Systems Recom-mendation ($) Appro-priation ($) Approp Pct of Rec Approp 1Yr Chng TBR Four-Year Universities 525,519,700 307,324,200 58% 4.7% TBR Two-Year Colleges 335,118,700 194,217,500 5.0% TBR Applied Tech Colleges 93,566,000 53,881,500 3.1% UT Four-Year Universities 370,233,000 212,818,700 5.8% Source: THEC Presentation – Nashville State – August 20, 2013

20 Developing a New Formula Model
Source: THEC Presentation – Nashville State – August 20, 2013

21 Developing a New Formula Model
Source: THEC Presentation – Nashville State – August 20, 2013

22 Past Concept of Bonus Pay
Enrollment-Based Funding Performance Funding (5.45%)

23 Funding Models Enrollment-Based Funding – Tuition and State Appropriations based on current enrollment. Performance Funding – Standard formula with extra pay for meeting state objectives. Outcomes-Based Funding (Performance-Based) Tuition dollars based on current enrollment. State appropriations based on recent past performance.

24 TN Outcomes-Based Components
Measurements – Items by system (Univ. & Com. Col.) Scales – State weights and measurement equivalency Institutional Weights - By institutional mission State 40% Premiums - Currently adult and low-income Translate to Dollar Amount - SREB Faculty Salary Averages Funding THEC Recommendation (November) Governor’s Budget (December) Legislative Appropriations (April) System Tuition and Fees (June)

25 TN Outcomes-Based Formula
University Weighting Structure – 40% Premium in Yellow Universities APSU UM UTK Students Accumulating 24 hrs 3% 2% Students Accumulating 48 hrs 5% Students Accumulating 72 hrs 7% Total Progression 15% 10% Bachelors and Associates 25% Masters / Ed Specialist Degrees 20% Doctoral / Law Degrees 0% Research and Service 12.5% Transfers Out with 12 hrs Degrees per 100 FTE 7.5% Six-Year Graduation Rate 100% Source: Funding Formula Model Simulation -THEC Website

26 Two-Year College Weighting Structure –40% Premium in Yellow
TN Outcomes-Based Formula Two-Year College Weighting Structure –40% Premium in Yellow Community Colleges NESCC PSCC VSCC Students Accumulating 12 hrs 4% 6% 2% Students Accumulating 24 hrs 5% 7% 3% Students Accumulating 36 hrs Total Progression 15% 20% 10% Dual Enrollment Associates Certificates 1-2 Years 17% 0% Certificates Less Than 1 Year 16% Total Certificates Job Placements Remedial & Developmental Success Transfers Out with 12 hrs Workforce Training (Contact Hours) Awards per 100 FTE 100% Source: Funding Formula Model Simulation -THEC Website

27 Available State Funding
Formula Share of Available State Funding Institution Austin Peay 3.6% 3.9% 4.0% East Tennessee 5.9% 5.8% Middle Tennessee 9.8% 10.0% Tennessee State Tennessee Tech 4.8% 4.9% University of Memphis 11.4% 11.1% 10.8% Community Colleges 25.2% 25.3% 25.4% UT Chattanooga 4.5% 4.4% UT Knoxville 19.9% 20.4% 20.9% UT Martin 3.1% 3.0% Technology Centers 7.7% 7.1% 7.0% Total 100% Source: THEC Presentation – Nashville State – August 20, 2013

28 Source: THEC Presentation – Nashville State – August 20, 2013

29 Current Situation Beginning fourth year of outcomes-based funding.
Phase out complete for past enrollment-based funding policy to use the funding formula to only distribute new dollars (hold harmless). Initial evaluations and comments on use becoming available. Used by both TBR and UT systems for presidential evaluation. Changes in institutional practices. Discussions for changes in the formula. New strategic planning cycle begins in fall 2015.

30 Current Comments When can I change my weights?
What measures should we add? What measures should we take away? How can we capture workforce and research dollars more efficiently? Would a five-year average be better than a three-year? How will the model perform in a time of decreased funding?

31 Changes in Practice Presidential Evaluations on Outcomes Components
Predictive Analysis on Outcomes Components Increased scrutiny on application and acceptance policy Increased importance on measuring the cost and effectiveness of system and campus initiatives

32 Changes in Formula Changes made Possible items to remove
Less than one-year certificates included in formula Graduation Rates computed with trailing summer Possible items to remove Graduation Rates Degrees per FTE Possible items to add Prior Learning Assessment Reverse Transfer Benchmark Certificates Possible Formula Changes Increase average from three-year to five-year Include National Clearinghouse data in Graduation Rates

33 Conclusions Performance-Based Funding is not a fix for higher education funding needs. PBF does communicate state priorities and institutional mission. The concept of outcomes funding on face value is appealing to the legislature and the public. PBF 2.0 in a beginning look does appear to have the capability of changing institutional practices. Many varieties of PBF 2.0 are becoming available to study.

34 Tomorrow’s Opportunity
Maintain a data driven approach Understand your Institution Understand the politics Move toward decision support and predictive analysis (big data analytics) Maintain focus on bread and butter IR activities Distinguish measures best for funding and for strategic action (Includes concepts from Terrenzini 2013, “On the Nature of Institutional Research”)

35 Performance-Based Funding
Tennessee and Louisiana SAIR 2013 Edwin Litolff – Greg Schutz –


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