1. An Overview of Performance-Based Funding in West Virginia 2013 Board of Governors Summit Stonewall Resort Roanoke, West Virginia Rob Anderson

2. A method for structuring higher education funding by tying funds to outcomes (such as increased graduates, STEM degree holders, etc.) instead of basing it on enrollment or historical funding. West Virginia Higher Education Policy Commission What Is Performance-Based Funding?

3. Over ½ of all states have some type of model Purpose: 1.Stabilize funding and reassess how to finance public colleges 2.Greater focus on degree completion 3.The need to increases college access and success Involvement of national foundations West Virginia Higher Education Policy Commission National Context

4. Performance Funding Landscape

5. Higher Education: A Good Investment for West Virginia West Virginia Higher Education Policy Commission In 2010, the Commission, in collaboration with the West Virginia University Bureau for Business and Economic Research, released a report regarding the economic impact of the state’s four-year public colleges and universities. Highlights of the Fiscal Year (FY) 2008 total economic impact report include: Total number of jobs created was approximately 40,600. Total business volume generated was $7.9 billion. Total employee compensation was $1.5 billion. Total assorted state taxes (consumer sales and use, personal income, corporate net income, and business franchise) resulting from these business activities was $73 million. Based on inflation only and not accounting for institutional growth, the estimated economic impact for FY 2014 is nearly $13.5 billion. The total return on investment for FY 2014 would be 50:1 with level funding.

6. Charting the Future establishes a public agenda for how higher education can best serve the needs of West Virginia’s citizens. Access: Enrollment has grown by approximately 5,500 students, a 6% increase. Cost and Affordability: Approximately 155,000 students have received state financial aid support and tuition has increased at a lower rate than peers. Learning and Accountability: An increased focus has been placed on completion - making institutions more accountable for performance. Innovation: Research funding has significantly increased in all categories and most recent data shows a $198 million annual investment in external funding. Economic Growth: More than 60,000 graduates have entered the workforce and an increasing number of graduates are remaining in the state. Charting the Future: The 2007-12 Master Plan West Virginia Higher Education Policy Commission

7. Increased Participation Rates of Low-Income and Adult Students Stable Retention and Graduation Rates Increased Number of Graduates Living and Working In-State Increased Tuition and Fees and Student Loan Debt Charting the Future: 2012 Progress Report West Virginia Higher Education Policy Commission

8. Leading the Way: The 2013-18 Master Plan West Virginia Higher Education Policy Commission

9. Focal Areas Access - Goal: Increase access to postsecondary education for both traditional and non-traditional aged West Virginians. Success - Goal: Increase the number of students at system institutions completing quality academic programs. Impact - Goal: Increase the impact that public colleges and universities have on West Virginia through the production of qualified graduates ready to contribute to the workforce and the community, provision of needed services, and research and development that promote knowledge production and economic growth. Tools Collaboration Fiscal Responsibility Assessment Leading the Way: Access. Success. Impact. West Virginia Higher Education Policy Commission

10. Cracks in the Pipeline Source: National Center for Higher Education Management Systems (2008) West Virginia Higher Education Policy Commission

11. Total Headcount Enrollment Fall Census Figures West Virginia Higher Education Policy Commission Estimate for total headcount enrollment: 92,140 Enrollment decreased 1.3% from Fall 2011 and increased 4.9% over Fall 2008.

12. Total In-State Tuition and Fees West Virginia Higher Education Policy Commission

13. Average In-State Tuition and Fees Source: Trends in College Pricing, 2012. Table 5. College Board West Virginia Higher Education Policy Commission

14. Declining Role of State Support Per FTE Source: SREB Data Exchange January 2013 West Virginia Higher Education Policy Commission

15. Percent of Students Borrowing and Average Amount West Virginia Higher Education Policy Commission 2011 data

16. State Financial Aid Programs West Virginia Higher Education Policy Commission

17. Percent Undergraduate Population – Pell Recipients Source: Higheredinfo.org (2009-10 data) West Virginia Higher Education Policy Commission

18. Average Salaries of Full-Time Faculty Public Four-Year Institutions (Budget Uncertainty) Source: SREB Data Exchange January 2013 West Virginia Higher Education Policy Commission Professors at the public four-year institutions in West Virginia earn 83 percent of the SREB states average. Associate professors at the public four-year institutions in West Virginia earn 92 percent of the SREB states average. West Virginia ranks 16 (lowest) out of the 16 SREB states in average salaries for professors. Associate professor salaries rank 12 out of 16 and both assistant professors and instructors rank 15 out of 16. The statewide Advisory Council of Faculty is developing a multi-year funding approach to increase faculty salaries across the state’s higher education system. The estimated cost is unknown at this time.

19. Classified Staff Salaries Compliance with Senate Bill 330 (Budget Uncertainty) West Virginia Higher Education Policy Commission In July 2010, the total shortfall for funding of the 2001 Classified Staff Salary Schedule was $4,056,146. Today, the 2001 salary schedule has been fully funded by the institutions and the Commission. As a result of Senate Bill 330, a study is in progress and should be released in the coming months along with a new salary schedule. Until that time, the total amount of required funding for the new schedule is unknown.

20. Deferred Maintenance for Buildings Unmet Institutional Need: Deferred maintenance remediation across the two- and four-year institutions (one-time). Required by West Virginia Code 18B-1B-4(a)(11) and 18B-19-5. Commission staff works with the institutions on a list of high priority capital projects addressing deferred maintenance and code compliance issues, updating the list for those in most urgent need. Institutions have identified more than $10,000,000 in immediate needs. Funding for deferred maintenance and code compliance issues would be utilized to match institution funding on a 50/50 basis. Funding would allow institutions to repair and maintain facilities that have longstanding capital needs such as sprinkler systems, fire alarms, smoke detectors, ADA access to buildings, re-roofing, and HVAC upgrades. Funding would support projects across both two- and four-year institutions, with the funding split in the range of 80 percent for Commission institutions and 20 percent for Council institutions. West Virginia Higher Education Policy Commission

21. 2012 Legislative Session Objectives: 1.Review of existing models 2.Identification of 3 to 5 policy objectives 3.Recommendations to ensure stability 4.Analysis of the impact of different models on different types of institutions West Virginia Higher Education Policy Commission Senate Bill 436

22. HCM Strategists Lumina Foundation Complete College America SREB Council and Commission Staff West Virginia Higher Education Policy Commission Legislative Partners

23. Meeting with HCM Strategists (May 2012) Meeting with College Presidents (August 2012) Presentation of Draft Formula (October 2012) Final Report Discussed (January 2013) SB 326 Introduced (February 20130 SB 326 Passes Senate But Fails in House (April 2103) West Virginia Higher Education Policy Commission The Work of the Select Committee

24. Two Formulas: CTCS Categories: Developmental Education, Student Progression, Degree Completion, and On-Time Degree Completion HEPC Categories: Student Progression, Degree Completion, On-Time Degree Completion, and Transfer Students from Two-Year Sector West Virginia Higher Education Policy Commission Proposed Formula

25. Both structured around a “points model” where students are counted in broad categories. Students in defined priority categories (STEM, low-income, adult) are weighted more heavily. The formula was run based on reallocations of 2% and 5% of base budgets. West Virginia Higher Education Policy Commission Proposed Formula

26. Charged the Commission and Council to promulgate procedural rules: Consider the differentiation of institutional missions Establish appropriate weights to help meet the goal of 20,000 additional degrees by 2018 Set FY 2014 as a pilot year West Virginia Higher Education Policy Commission SB 326

27. Would prefer new funding instead of pulling from base budget Current inequality in funding per student More input into the process West Virginia Higher Education Policy Commission Institutional Concerns

28. Are institutions being judged on the right measures How can we assure that the process will be adhered to and not circumvented Effectiveness West Virginia Higher Education Policy Commission Legislative Concerns

29. HEPC website: http://wvhepcnew.wvnet.edu Rob Anderson, randerson@hepc.wvnet.eduranderson@hepc.wvnet.edu West Virginia Higher Education Policy Commission Contact Information