1. 1 Oregon Community College Distribution Formula

2. 2 What is the Distribution Formula?  The method the State Board of Education and CCWD use to allocate state funds for general education programs to Oregon’s community colleges  Governing principles in ORS 341.626  Policy and procedures in OAR 589-002-0100 (http://arcweb.sos.state.or.us/rules/OARS_500/OAR_589/589_002.html)

3. 3 Objectives and Principles

4. 4 Distribution Formula Objectives  The State Board of Education’s commitment to access and equity Student-centered; equitable support Investment focuses on the student; funds follow the student  Maintain high levels of service to current students Avoid consequences negatively impacting students’ access to services  Long-term predictability and stability Provide colleges with reasonable stability and predictability, particularly when resources are uncertain Formula is sustainable; review/alteration of formula focused on refinement

5. 5 Six Principles of the Formula 1.An expectation that equalization will be achieved in six years. 2.Significant additional funds in a biennium compared to the previous biennium will benefit every college. The State Board of Education will determine what level is significant on a biennial basis. 3.Historic share of total public resources will be based on the immediate previous year for every year, with the exception of 2005-06. For 2005-06, historic share of public resources will be based on the average of 2003-04 and 2004-05. 4.Buffered FTE will be used in the formula. The buffering is accomplished by using a three-year weighted average. 5.If significant additional resources are available compared to the previous biennium, equalization can go faster. The State Board of Education will determine what level is significant on a biennial basis. 6.The resource level available compared to the previous biennium may impact the pace of progress toward equalization.

6. 6 Formula Overview

7. 7 Formula Components Total Available 2007-09 =$494,524,220.00  Categorical funding comes off the top  Department of Corrections ($1.6 million)  Contracts Out-of-District (COD) ($0.44 million)  Distributed Learning ($1.4 million)  SBE Strategic Fund ($5.0 million {1% of total}) Total $8.4 million  Remainder goes into the Distribution Formula  Base (Basic district operations)  Projected Property Taxes  CCSF Available for Formula Distribution  Reimbursable FTE  Harm Limit Total $486.1 million

8. 8 Total Public Resources General Fund + Property Taxes = Total Public Resources (TPR) The formula considers 100% of the next year’s projected property tax revenue and the current General Fund appropriation when determining how resources are distributed. Property taxes are not redistributed. They are only used as a formula input. Property tax projections are provided by the Oregon Department of Administrative Services.

9. 9 CCSF Funding Diagram : Total Public Resources

10. 10 Total Public Resources (in thousands)

11. 11 CCSF Formula Funding – Net Change of Funding Through the 2009-11 Biennium (Fiscal Year 2009 to Fiscal Year 2011) Example at Appropriation Level for 2009-11 = $423 million and Harm Limit @ 5.0%

12. 12 Reimbursable FTE

13. 13 Reimbursable FTE  Reimbursable FTE is defined by state law  Reimbursable FTE includes in-state and border state FTE (border states are Idaho, California, Nevada & Washington)  1 FTE = 510 contact hours for three quarters (Contracts Out of District FTE excluded)  Reimbursable courses are: O Career Technical Education (CTE), o Lower Division Collegiate (LDC) O Postsecondary Remedial (PSR), o Adult Basic Skills (ABS) o Adult High School Diploma (AHSD) o Health/Safety/Workforce Development FTE

14. 14 History of Reimbursable FTE FTE

15. 15 Weighted and Buffered Funding Formula FTE Weighted Average FTE for 2007-08 Funding 40% of 2006-07 FTE 30% of 2005-06 FTE 30% of 2004-05 FTE Funding Formula FTE for 2007-08 Funding Year: (85,366*40%) + (86,611*30%) + (87,659*30%) = 86,427

16. 16 Reimbursable FTE 2003-42004-52005-062006-072007-08 BMCC1,973.152,014.931,912.441,909.492,072.39 Statewide Total88,837.0387,659.0786,611.2385,36689,708.38 BMCC % of Statewide Total2.2%2.3%2.2% 2.3% Source: OCCURS, 2008

17. 17 Formula Mechanics

18. 18 The Base Increases stability and predictability of funding for individual colleges and provides funding for basic district operations. 2007-08 FTE calculation  $600 per FTE up to 1,100  $300 per unrealized FTE if do not reach 1,100 2007-08 FTE size adjustment (small school factor)  Multiply FTE by size adjustment (1.1347 for BMCC) BMCC: Base = $660,000 * 1.1347 = $748,902

19. 19 BMCC Non-Base Total Public Resources per FTE (Total Public Resources – Base) / FTE BMCC Actuals for 2007-08:  Total Public Resources = $9,129,045.62 (GF = $5,409,753.62; Property Taxes = $3,719,292.00)  Base = $748,902.00  Weighted Funding Formula FTE = 1,942.01 ($9,129,045.62 - $748,902.00) / 1,942.01 = $4,315 per FTE for BMCC

20. 20 Harm Limit Prevents loss >X% of non-base Total Public Resources due to equalization Does not limit losses due to changes in: FTE enrollment, changes in the General Fund appropriation, or changes in public resources. Determined by combining: a) the percent change in total public resources from one year to the next b) adjustment percent determined by the State Board of Education each year Percent Change in Total Public Resources from FY08 Adjustment Determined by State Board of Education TOTAL Harm Limit (% Change in TPR + SBE Adjustment) FY0812.93%-8.58%4.35%

21. 21 Formula Development and Maintenance  The actual formula mechanics were developed with substantial input and review from Community College expertise.  The formula is institutionalized in a spreadsheet which is well documented and changes receive peer review.

22. 22 2009-11 Essential Budget Level Governor’s Recommended Budget The EBL for the CCSF is based on:  Standard inflation factor (2.8%) This is provided by the Office of Economic Analysis and represents the Gross Domestic Product Implicit Price Deflator. The factor is multiplied by the total 2007-09 revenue the colleges receive from the State appropriation ($500.0 M) and property tax ($247.0 M). This results in an increase of $20.9 M.  Estimated growth in property tax Property tax is estimated by the Legislative Revenue Office at $267.7 M for 2009-11 which is an increase of $20.7 M from 2007-09. Calculation of CCSF 2009-11 EBL: Base Budget (current biennium)$500.0 M Standard Inflation (2.8%)$20.9 M Property Tax Growth (8.4%)($20.7 M) CCSF EBL$500.2 M

23. 23 2009-11 Essential Budget Level Community College Revenue Forecast Committee  DAS Recommendation based on the Executive Order Estimate percent of General Operating Revenue spent on:  Personal Services categories.  Salary growth uses K-12 growth factors until college data develops.  PERS blended rate.  Health benefits growth used in K-12 model.  Materials & Supplies and Capital Outlay.  Standard inflation factor used by state agencies (2.8%). Calculate separate growth factors for each category (salary, insurance, PERS, Materials & Supplies, etc). Combine into a single weighted growth factor based on the proportion of each category to the whole (5.92%). This factor is applied to the sum of the revenue received from the State appropriation, tuition and property taxes. Tuition rate increase limited to growth in median family income.

24. 24 2009-11 Essential Budget Level Community College Revenue Forecast Committee DAS Proposal for CCSF 2009-11 EBL: Base Budget (current biennium)$500.0 M Weighted Growth Factor (5.92%)$64.4 M Tuition Growth($24.3 M) Property Tax Growth ($20.7 M) CCSF EBL$519.4 M