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Arizona |
Formal discussions
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FY2013 - $5 million of existing dollars will be reallocated by the Board of Regents based on performance metrics. |
With Senate Bill 1618, the legislature required the Arizona Board of Regents to submit a report on a funding structure for performance and outcomes-based funding. Proposed fiscal 2013 funding includes performance funding for degree completion and credit hour completion with each weighted by level, cost, and research/public service.
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2011 SB 1618 |
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Arkansas |
In transition
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Begins with 5% in 2013-2014 school year, and increases in 5% increments until capped at 25% during the 2018-2019 school year. The remaining 75 percent of funding will be based on enrollment and institutional needs.
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Act 1203 of 2011 directed the Arkansas Department of Higher Education (ADHE) to collaborate with college leaders to develop a funding formula that takes into account institutional performance in the following categories. The formula was approved by the ADHE in December 2012.
The most important feature of the performance funding system is the requirement that the number of degrees awarded by higher education institutions double by the year 2025, while maintaining academic integrity and quality.
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Although technical certificates and associate degrees are included, significant weighting is placed on increasing the number of bachelor’s degrees awarded.
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The performance funding measures of total credentials awarded, bachelor credentials awarded, STEM production and student progression will generate 40 percent (40%) of all performance funding with the remaining 60 percent (60%) generated by optional measures selected by each institution.
Two-year colleges are open-door institutions that serve four major educational purposes: 1) technical skills education; 2) preparation for transfer to a four-year university; 3) remedial education and; 4) workforce training for business and industry. The two-year college performance funding model incorporates all four purposes. Considering the unique characteristics of two-year colleges, ADHE found it imperative to keep the model as simple as possible while also maintaining flexibility for individual colleges to account for regional missions and demographics. |
2011 Act 1203 |
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Colorado |
In transition
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25% of General Fund appropriation, beginning after FY15-16 |
The metrics are still under development by the Colorado Commission on Higher Education. Thus far, the following goals for the formula have been set:
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Increase attainment
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Improve student success
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Diversify enrollment and reduce attainment gaps
Restore balance in postsecondary revenues and maintain productivity |
2011 SB 52 |
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Florida |
Formal discussions
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Florida used to have a performance funding program in place for their community colleges, but it has lapsed. Legislators have recently held discussions about reinstating a performance-based funding formula that would include the four-year sector. |
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Idaho |
Formal discussions
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Illinois |
In place
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Less than 1% in FY2013, may grow in future years. |
Schools are scored on a variety of variables, including degree completions and the amount of money spent on each degree produced.
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Schools receive bonuses for low-income and minority students, and for producing degrees in the critical science, technology, engineering and math fields.
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Community colleges also have a system, but theirs is based more on enrollment numbers.
The final results in the first year provided little drama, with no school gaining more than an extra one-tenth of a percent of funding, and no school losing more than one-fifth of a percent of its funding. |
2011 HB 1503 |
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Indiana |
In place
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5% in FY2011-2013 budget; projected to by 6% in FY2014 and 7% in FY2015 |
Institutions evaluated against the same benchmarks regardless of size or mission.
Metrics (% Allocation)
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Total Degree Attainment Improvement: 60 percent
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Change in overall degree attainment: 30 percent
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Change in on-time degree attainment: 15 percent
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Change in low-income degree attainment change: 15 percent
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Total Credit Hour Completion Improvement: 25 percent
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Successful completion of credit hours: 18.7 percent
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Successful completion of dual-credit credit hours: 5.5 percent
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Successful completion of “early college” credit hours: .8 percent
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Total Improvement in University Research: 15 percent
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CHE Presentation to House Ways & Means Cte, January 2011 (slides 4-10) |
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Kentucky |
Formal discussions
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Louisiana |
In place
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25% |
Louisiana’s revised (as of 2011) funding formula has two components: cost and performance.
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85% of the total state general funds will be distributed based on the cost model and the remaining funds will be distributed based on performance.
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The performance component has been simplified and aligned with the GRAD Act. State general funds will be awarded based upon an institution’s performance on the following student success measures:
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Implement policies established by the institution's management board to achieve cohort graduation rate and graduation productivity goals that are consistent with institutional peers.
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Increase the percentage of program completers at all levels each year.
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Develop partnerships with high schools to prepare students for postsecondary education.
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Increase passage rates on licensure and certification exams and workforce foundational skills.
Campuses can achieve an additional 10% in tuition funding if they meet their annual GRAD Act targets for a total performance component of 25%. |
2010 GRAD Act |
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Maine |
Formal discussions
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Maine is currently developing recommendations on performance funding metrics and strategy.
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Maryland |
Formal discussions
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NCSL participated in discussions on performance funding with Maryland legislators and legislative staff in 2011 and 2012. |
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Michigan |
In place
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3.0% under FY 2012-13 enacted budget ($36.2 million) |
The legislature passed a higher education budget containing a 3 percent increase in funding over last year for public universities. The new funding will be tied to performance measures including graduation rates, the number of degrees awarded in science, technology, engineering, math and other critical area fields, and research and development expenditures. The formula also includes an incentive for universities to not increase tuition by more than four percent. To be eligible for the performance funding, universities must participate in the state's student transfer network, have reverse transfer agreements in place with at least three community colleges, and accept dual enrollment credits.
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House Bill 5372 |
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Minnesota |
In place |
Small amount |
One percent of the fiscal year 2013 appropriation in this subdivision is available in fiscal year 2013 after the Board of Trustees of the Minnesota State Colleges and Universities demonstrates to the commissioner of management and budget that the board has achieved at least three of the following five performance goals:
(1) increase by at least seven percent, compared to fiscal year 2009, graduates or degrees, diplomas and certificates conferred;
(2) increase by at least ten percent, compared to fiscal year 2010, the number of students of color;
(3) increase by at least fifteen percent, compared to fiscal year 2010, the full year equivalent enrollment of students taking online or blended courses or the number of online and blended sections;
(4) increase by at least one percent the fall 2011 persistence and completion rate for fall 2010 entering students compared to the fall 2010 rate for fall 2009 entering students; and
(5) decrease by at least two percent, compared to calendar year 2009, total energy consumption per square foot.
One percent of the fiscal year 2013 appropriation in this subdivision is available in fiscal year 2013 when the Board of Regents of the University of Minnesota demonstrates to the commissioner of management and budget that the board has met at least three of the following five performance goals:
(1) increase the amount of institutional financial aid so that it is greater in fiscal year 2012 than in fiscal year 2010, excluding federal stimulus funding. Institutional financial aid includes funds from the University of Minnesota Foundation and the Minnesota Medical Foundation;
(2) produce at least 13,500 total degrees on all campuses in fiscal year 2012;
(3) increase the undergraduate four- and six-year graduation rates on the Twin Cities campus for 2011-2012, as reported in the federal completions survey, over the numbers for 2009-2010, as reported in the federal completion survey;
(4) produce total research and development expenditures, as reported to the National Science Foundation (NSF) for the University of Minnesota system so that the amount in the 2012 NSF report is not less than the amount in the 2010 NSF report; and
(5) produce sponsored funding from business and industry so that funding in fiscal year 2012, as reported to the Board of Regents in December of that year, is not less than funding in fiscal year 2010. |
2011 Laws 1st Special Session Chapter 5 Art 1 Sec 4, 5 |
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Mississippi |
Formal discussions |
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House Bill 875 charges the Education Achievement Council, a group of political and educational leaders, with the duty of researching and developing a new funding formula for higher education institutions. The new formula will go beyond funding for enrollment to include funding based on how well institutions are meeting state productivity goals. The council must present its recommendations to the Legislature and governor by November 2012. |
2011 HB 875 |
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Missouri |
In transition |
Applies to new appropriations only. Funding earned through performance in one year will be added to an institution’s base the following year. Total funding allocated on the basis of performance will not exceed approximately 2-3% of an institution’s total state funding in any given year. Excepted to be in placy by FY2014 budget. |
Performance measures are to be evaluated based on a three-year rolling average. Metrics vary by institutional sector and focus on the following areas:
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Student success/progress: a) completion rates; b) retention rates; c) completion of developmental and first credit-bearing course; d) credit accumulation
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Degree attainment: a) total degrees awarded; b) graduation rates
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Quality: a) job placement; b) licensure/certification exam results and pass rates; c) assessment results in major field, general education
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Financial responsibility/efficiency: a) share of E&G spending on core mission; b) revenue growth per FTE student; c) completed credit hours per $100,000 of state appropriations or E&G spending
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Montana |
Formal discussion
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Nevada |
Formal discussions |
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The Nevada State Legislatures' Committee to Study the Funding of
Higher Education is considering rewriting the funding formula to be
based on completion and other performance indicators.
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New Mexico |
In place |
New performance-based formula makes up 5 percent of total funding to universities. |
The formula distinguishes missions between sectors, providing different metrics for each. The formula focuses on the following four outputs:
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Course completion rate;
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Number of certificates and degrees awarded
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Number of certificates and degrees awarded in state workforce priority areas;
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Number of certificates and degrees earned by financially at-risk students.
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Performance funding in effect in FY2013 budget (Laws 2012, chp. 19). Summary of formula. |
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New York |
Formal discussions
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The State University of New York is leading a task force on developing recommendations. |
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North Dakota |
Formal discussions
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NCSL participated in discussions on performance funding with North Dakota legislators and legislative staff in 2011 and 2012. |
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Ohio |
In place
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Universities – All instructional funding based on course completions instead of enrollments, with degree completions being phased in (began in 2010).
Community Colleges – 5% of funding based on Success Points, 95% of based on FTE enrollment (began in 2011). |
There is a stop loss provision in place to guarantee that institutions do not lose more than 1% of their funding per year, with the stop loss eventually being phased out. The formula heavily favors course completions in the beginning. University main campus have begun using degree completions as well, with more weight shifting from course completions to degree completion each year. University regional campus are using only course completions at this point; degree completions will be added in the future.
At-risk students are more heavily weighted in formula, and there is a STEM course incentive. Funds allocated for graduate education will be based on success factors (e.g. degree completion and research expenditures).
University Main Campuses
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Course and degree completion
University Regional Campuses
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Course completion
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Degree completion will be added
Community Colleges/Success Points
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Progression from remedial to college level courses
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Students earning 15 and 30 college level credits
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Students earning an associate degree
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Completion of 15 hours and transfers to four-year institutions
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Performance-Based Subsidy Formula Overview by Chancellor Fingerhut |
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Oklahoma |
In place
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Small percentage of the overall budget for higher education. Colleges and universities still receive the bulk of their funding based on enrollment. In 2008, performance-based funding averaged $2.2 million a year |
The focus of the incentives is on student retention, graduation, and degree completion.
The Board of Regents in April 2012 voted to approve a revised and expanded funding formula for new money, or any funding the system receives beyond its current base level. The revised formula will reward schools for student retention and degree completion. |
Revised performance-funding formula |
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Pennsylvania |
In place
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2.4% -- funded from education & general appropriations |
Performance-funding only awarded to 4-year sector (Pennsylvania State System of Higher Education).
Measures are worth 1 point for total of 10 points, which are weighted by the base appropriation. Weighted points divided into total performance funding pool creating a dollar per point value.
2011-2017 Revised Metrics
Mandatory (5 measures)
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Student Success: degrees conferred and closing achievement gap
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Access: close access gap and faculty diversity
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Stewardship: private support dollars raised
Optional (chose 5)
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Success: deep learning scale results; senior survey; student persistence; value added; and STEM degrees
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Access: faculty career advancement; employment diversity; student experience with diversity; and student diversity
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Stewardship: facilities investment; admin. expenditures as a % of educational costs; faculty productivity; and employee productivity
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University-specific: may create no more than 2 indicators
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South Dakota |
In place
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$6 million |
South Dakota’s Board of Regents created a performance funding pilot program that uses $3 million in one-time state funding approved by the Legislature to be matched by universities’ base budgets. The $6 million of funding will be allocated to universities based on three years of degree production data. The pilot program will award institutions more funding for producing graduates in high-priority fields
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Tennessee |
In place
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100% |
Adults (over 25) and low-income students completing any of the metrics are more heavily weighted. Additional weights are applied to each outcome depending on the priority and institutional mission. Points are awards based on outcomes metrics, which are then multiplied by the SREB average salary to monetize the formula. Fixed costs and the
Quality Assurance program funds (accreditation, student satisfaction, and licensure exam pass rate) are added on.
University Metrics
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Students accumulating: 24, 48, and 72 hours
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Bachelor’s, Master’s, Doctoral, and law degrees
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Research/grant funding
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Transfers out with 12 hours
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Degrees per 100 full-time equivalent (FTE)
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Six-year graduation rate
Community College Metrics
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Student accumulating: 12, 24, and 36 hours
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Dual enrolled students
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Associated degrees
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Graduates placed in jobs
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Remedial and development success
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Transfers out with 12 credit hours
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Workforce training (contact hours)
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Award per 100 FTEs
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Complete College TN Act of 2010: Presentation on Outcomes Funding Model |
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Texas |
Formal discussions
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10% |
House Bill 9 of 2011 directs the Higher Education Coordinating Board to propose an outcomes-based funding methodology. They have proposed two different formulas to be considered by the Legislature in 2013:
General Academic Institutions
An outcomes-based allocation methodology would be funded outside of the instruction and operations formula with 10 percent of the funding that would have been allocated to undergraduate weighted semester credit hours.
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The model would allocate funds based on a three-year rolling average of institutions’ performance on the below metrics.
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All metrics would be weighted the same, except for the critical field metric which would receive a double weight.
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All metrics are based only on undergraduates – graduate and professional students are excluded from the calculation.
Metrics
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Total Undergraduate Degrees
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Time-to-Degree Factor
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Institutional Mission Factor
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Cost-to-Degree Factor
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Critical Fields Factor (STEM and health fields)
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At-Risk Factor
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Persistence Factor
Community and Technical Colleges
The Commission recommends that funding equal to 10 percent of the base enrollment formula funds be allocated under the outcomes-based methodology in each year of the
biennium.
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Institutions would earn momentum points for the number of students annually completing each of the following metrics.
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Funding would be allocated to an institution in proportion to its share of the total momentum points earned statewide.
Metrics
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Developmental Education
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Gateway Courses
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College Credit Hour Attainment
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Credentials Awarded
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Transfers to a Four Year Institution
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2011 House Bill 9 |
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Utah |
Formal discussions
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Senate Bill 97 establishes “mission based funding” as a basis for higher education appropriations in Utah. Instead of funding institutions based solely on enrollment growth, mission-based funding will consider both enrollment growth and the strategic priorities for colleges and universities. For example, a strategic priority for research universities would be research and development, while a priority for community colleges would be open access. Legislators hope that allocating funding based on missions will give colleges an incentive to focus on their core priorities. |
2011 Senate Bill 97 |
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Virginia |
In transition
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The Virginia Higher Education Opportunity Act of 2011 creates performance funding incentives for institutions that meet the goals of the legislation, which include:
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increased enrollment
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increased degree completion
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improved retention and graduation rates
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increased research output
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increased degree production in STEM fields
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increased efficiency gains through:
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year-round use of campus facilities,
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online courses,
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resource sharing, and
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better use of technology.
The formula is under development. |
Virginia Higher Education Opportunity Act of 2011 |
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Washington |
In place
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2009-2011: Proposed budget included $3.5 million with $500,000 set aside for first year |
The Student Achievement Initiative program allocates some funding to community and technical colleges based on their accumulation of momentum points, which are acquired through the following:
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Building College Level Skills: adult literacy/English language proficiency test score gains; GED or H.S. diploma; and passing pre-college writing or math
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First-year Retention: Earning 15 and 30 college level credits
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Completing College Level Math: passing courses required for technical or academic associate degrees
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Completions: certificates; Associate degrees; and apprenticeship training
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West Virginia |
Formal discussions
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Wyoming |
Formal discussions |
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