Presentation on theme: "Performance-Based Funding"— Presentation transcript:
1 Performance-Based Funding Tennessee and LouisianaSAIR 2013Edwin Litolff – University of Louisiana SystemGreg Schutz – Tennessee Board of Regents
2 Performance-Based Funding Across the States In Place22In Transition7In Planning10Total39PBF 2.0ProgressionCompletionMissionSubpopulationsSource: 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 GoalsCost of delivery and performanceCost Component (85%)Core – Cost of disciplines and academic supportGeneral Support – Institutional support and student servicesOperation of Plant and Maintenance – Physical academic and support facilitiesPerformance (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$68,300Average Class Size25Full-Time Student Workloads30Instruction Amount$124.21$111.35$93.46$91.07Academic Support/ Services30%Academic Support Amount$37.26$33.41$28.04$27.32Total Base SCH Value$161.47$144.76$121.50$118.39
6 Cost MatrixGroupFormula Group NameLLU FactorULU FactorMasters FactorDoctoral FactorSpec Prof Factor01Liberal Arts1.001.963.9412.044.0502Science1.533.007.1719.2903Fine Arts1.853.116.5117.4704Teacher Education1.283.239.953.3605Agriculture2.052.546.6416.3706Engineering3.013.468.2021.4007Home Economics1.582.124.3410.7908Law3.2209Social Science1.641.845.8011.9210Library Science1.451.524.2212.2613Physical Training1.3614Health Science2.876.4715.9815Pharmacy4.004.647.5519.1113.4316Business Administration1.411.594.5913.9117Optometry1.992.565.4619.127.0019Technology6.6120Vocational Training - Skilled Trades1.553.439.3421Vocational Training - Precision Trades1.702.074.5512.3922Vocational Training - Transportation3.594.359.5926.0996Veterinary Medicine13.6397Other98Military Science99Nursing3.125.326.4916.32Average1.882.525.2413.665.85Developmental Education = 1.45
7 Student Credit HoursCourseNumDescriptionSecSCHStudentsDEVLowerUpperMastDocBIOS1053Contemporary Biology1819273573246ENEE2582Digital System Design12341151053$ 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 = $106,833Total $233, 742$ 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 = $3,561Total $62,687
8 Formula Funding Matrix - Example Formula Funding SpreadsheetTotal SCH Production 261,667Core Component $98,071,579Core Component EOC $90,311,809General Admin and Operational CostsTotal Dollars $114,084,325State Share 42%Formula Request $47,915,417
10 Distribution Formula Units – Colleges and Universities Non-Formula Units – Systems, Ag, Law, LOSFAPreliminary Board of Regents Allocation15% PerformanceMaximum -4% loss2Year/4 Year Shift10% Performance (Pell, Research, Workforce)Total Formula Distribution for $500 million
11 Formula Summary Total Cost $1.9 billion State Share $868 million Appropriation $500 million
12 UL System Total Operating Budget FY 2013/14 State Funding Trend
14 Performance Funding in TN Higher Education in TNTN Funding ContextTN Outcomes-Based FundingCurrent SituationTomorrow’s Opportunity
15 TBR Fall Enrollment Trend * Fall 2013 does not include session II enrollment at APSU’s Fort Campbell campus.Source: State Enrollment Collection for Census Date Enrollment
16 TN Colleges of Applied Technology Enrollment Trends Source: TBR TCAT Collection for End-of-Year Enrollment
17 Funding Tennessee Higher Ed Public UniversitiesPre StimulusARRAPost StimState Appro-priations739,999,930694,121,096735,872,025499,875,300499,157,829Non-Recur-ring(ARRA/MOE)190,802,900Tuition & Fees531,226,348708,690,255806,781,507964,471,0091,054,848,105FTE97,141102,726107,394116,995118,127Avg Student Support13,08613,65614,36414,14713,155Student Share41.8%50.5%52.3%58.3%67.9%All years equated to dollars / Source: THEC Student Support Historical AnalysisARRA =American Recovery & Reinvestment Act / MOE=State Maintenance and Operating Expenses
18 Funding Tennessee Higher Ed Public Two-Year CollegesPre StimulusARRAPost StimState Appro-priations248,683,595232,877,040224,020,518185,851,200187,614,232Non-Recur-ring(ARRA/MOE)45,671,600Tuition & Fees115,865,180170,249,534188,705,764269,952,100282,601,142FTE46,34949,23849,19362,7586,086Avg Student Support7,8658,1878,3907,9917,698Student Share31.8%42.2%45.7%53.8%60.1%All years equated to dollars / Source: THEC Student Support Historical AnalysisARRA =American Recovery & Reinvestment Act / MOE=State Maintenance and Operating Expenses
19 Funding Tennessee Higher Ed 2013-14 Formula SystemsRecom-mendation ($)Appro-priation ($)Approp Pct of RecApprop 1Yr ChngTBR Four-Year Universities525,519,700307,324,20058%4.7%TBR Two-Year Colleges335,118,700194,217,5005.0%TBR Applied Tech Colleges93,566,00053,881,5003.1%UT Four-Year Universities370,233,000212,818,7005.8%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 FundingPerformance Funding (5.45%)
23 Funding ModelsEnrollment-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 equivalencyInstitutional Weights - By institutional missionState 40% Premiums - Currently adult and low-incomeTranslate to Dollar Amount - SREB Faculty Salary AveragesFundingTHEC 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 YellowUniversitiesAPSUUMUTKStudents Accumulating 24 hrs3%2%Students Accumulating 48 hrs5%Students Accumulating 72 hrs7%Total Progression15%10%Bachelors and Associates25%Masters / Ed Specialist Degrees20%Doctoral / Law Degrees0%Research and Service12.5%Transfers Out with 12 hrsDegrees per 100 FTE7.5%Six-Year Graduation Rate100%Source: Funding Formula Model Simulation -THEC Website
26 Two-Year College Weighting Structure –40% Premium in Yellow TN Outcomes-Based FormulaTwo-Year College Weighting Structure –40% Premium in YellowCommunity CollegesNESCCPSCCVSCCStudents Accumulating 12 hrs4%6%2%Students Accumulating 24 hrs5%7%3%Students Accumulating 36 hrsTotal Progression15%20%10%Dual EnrollmentAssociatesCertificates 1-2 Years17%0%Certificates Less Than 1 Year16%Total CertificatesJob PlacementsRemedial & Developmental SuccessTransfers Out with 12 hrsWorkforce Training (Contact Hours)Awards per 100 FTE100%Source: Funding Formula Model Simulation -THEC Website
27 Available State Funding Formula Share ofAvailable State FundingInstitutionAustin Peay3.6%3.9%4.0%East Tennessee5.9%5.8%Middle Tennessee9.8%10.0%Tennessee StateTennessee Tech4.8%4.9%University of Memphis11.4%11.1%10.8%Community Colleges25.2%25.3%25.4%UT Chattanooga4.5%4.4%UT Knoxville19.9%20.4%20.9%UT Martin3.1%3.0%Technology Centers7.7%7.1%7.0%Total100%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 ComponentsIncreased scrutiny on application and acceptance policyIncreased 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 formulaGraduation Rates computed with trailing summerPossible items to removeGraduation RatesDegrees per FTEPossible items to addPrior Learning AssessmentReverse TransferBenchmark CertificatesPossible Formula ChangesIncrease average from three-year to five-yearInclude National Clearinghouse data in Graduation Rates
33 ConclusionsPerformance-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 approachUnderstand your InstitutionUnderstand the politicsMove toward decision support and predictive analysis (big data analytics)Maintain focus on bread and butter IR activitiesDistinguish measures best for funding and for strategic action(Includes concepts from Terrenzini 2013, “On the Nature of Institutional Research”)