Post on 15-Dec-2015
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Performance-Based Funding
Tennessee and LouisianaSAIR 2013
Edwin Litolff – University of Louisiana System
Greg Schutz – Tennessee Board of Regents
Performance-Based Funding Across the States
In Place22
In Transition 7
In Planning10
Total39
• PBF 2.0– Progression– Completion– Mission– Subpopulations
Source: PBF: The National Landscape. Sept-2013. Univ. of Alabama Education Policy Center
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.
2014-2015 will be the sixth year of implementation, modifications are still being made to improve results.
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
Formula
SREB 1
SREB 2 SREB 3 SREB 4
Average SREB Faculty Salaries & Benefits
$93,160
$83,509 $70,098 $68,300
Average Class Size 25 25 25 25
Full-Time Student Workloads
30 30 30 30
Instruction Amount $124.21
$111.35 $93.46 $91.07
Academic Support/ Services
30% 30% 30% 30%
Academic Support Amount
$37.26 $33.41 $28.04 $27.32
Total Base SCH Value
$161.47
$144.76
$121.50
$118.39
Basic Factor Chart – Student Credit Hour Value
Cost MatrixGroup 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 4.0502 Science 1.53 3.00 7.17 19.29 7.1703 Fine Arts 1.85 3.11 6.51 17.47 6.5104 Teacher Education 1.28 1.96 3.23 9.95 3.3605 Agriculture 2.05 2.54 6.64 16.37 6.6406 Engineering 3.01 3.46 8.20 21.40 8.2007 Home Economics 1.58 2.12 4.34 10.79 4.3408 Law 1.00 1.96 3.22 3.22 3.2209 Social Science 1.64 1.84 5.80 11.92 5.8010 Library Science 1.45 1.52 4.22 12.26 4.2213 Physical Training 1.36 1.36 3.23 9.95 3.2314 Health Science 2.87 3.46 6.47 15.98 6.4715 Pharmacy 4.00 4.64 7.55 19.11 13.4316 Business Administration 1.41 1.59 4.59 13.91 4.5917 Optometry 1.99 2.56 5.46 19.12 7.0019 Technology 1.99 2.56 6.61 15.98 6.6120 Vocational Training - Skilled Trades 1.28 1.55 3.43 9.34 3.4321 Vocational Training - Precision Trades 1.70 2.07 4.55 12.39 4.5522 Vocational Training - Transportation 3.59 4.35 9.59 26.09 9.5996 Veterinary Medicine 1.53 3.00 7.17 19.29 13.6397 Other 1.00 1.00 1.00 1.00 1.0098 Military Science 1.00 1.00 1.00 1.00 1.0099 Nursing 3.12 5.32 6.49 16.32 6.49
Average 1.88 2.52 5.24 13.66 5.85Developmental Education = 1.45
Student Credit Hours
$144.76 Base SCH Value x 573 SCH’s x LL Science 1.53 = $126,909
$144.76 Base SCH Value x 246 SCH’s x UL Science 3.00 = $106,833
Total $233, 742
$144.76 Base SCH Value x 15 SCH’s x UL ENG 3.01 = $6,535
$144.76 Base SCH Value x 105 SCH’s x UL ENG 3.46 = $52,591
$144.76 Base SCH Value x 3 SCH’s x UL ENG 8.20 = $3,561
Total $62,687
Course Num Description Sec SCH Students DEV Lower Upper Mast Doc
BIOS 1053 Contemporary Biology 1 819 273 0 573 246 0 0
ENEE 2582 Digital System Design 1 123 41 0 15 105 3 0
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
Additional Performance - Added
Pell Enrollment – 5% Research - 2% Workforce - 3%
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
Formula Summary
Total Cost $1.9 billion State Share $868 million Appropriation $500 million
UL SYSTEM TOTAL OPERATING BUDGET FY 2013/14 STATE FUNDING TREND
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-140%
10%20%30%40%50%60%70%80%90%
100%
56%62% 63%
58%54%
42% 39%33%44% 38% 37%
42%46%
58% 61%67%
State Funds Self Generated
AVERAGE SYSTEM TUITION
01-02
02-03
03-04
04-05
05-06
06-07
07-08
08-09
09-10
10-11
11-12
12-13
13-14
0
1000
2000
3000
4000
5000
6000
7000$2,5
81
$2,6
09
$3,0
30
$3,3
22
$3,5
36
$3,5
90
$3,6
73
$3,8
34
$4,0
70
$4,4
72
$4,9
19
$5,5
68
$6,2
5463%
Increase
Performance Funding in TN
Higher Education in TN TN Funding Context TN Outcomes-Based Funding Current Situation Tomorrow’s Opportunity
TBR Fall Enrollment Trend
* Fall 2013 does not include session II enrollment at APSU’s Fort Campbell campus.
Fall 2008 Fall 2009 Fall 2010 Fall 2011 Fall 2012 Fall 2013*
86,180
90,890
94,98196,202
93,507
90,080
80,156
92,226
97,92696,139
92,29889,676
Source: State Enrollment Collection for Census Date Enrollment
TN Colleges of Applied TechnologyEnrollment Trends
2007-08 2008-09 2009-10 2010-11 2011-1228,000
28,500
29,000
29,500
30,000
30,500
31,000
31,500
32,000
32,500
33,000
29,647
32,27632,456
31,198
29,560
Source: TBR TCAT Collection for End-of-Year Enrollment
Funding Tennessee Higher Ed
Public Universiti
es
Pre Stimulus ARRA Post Stim
1999-00
2004-05
2007-08
2010-11
2011-12
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 2010-11 dollars / Source: THEC Student Support Historical AnalysisARRA =American Recovery & Reinvestment Act / MOE=State Maintenance and Operating Expenses
Funding Tennessee Higher Ed
Public Two-Year
Colleges
Pre Stimulus ARRA Post Stim1999-
002004-
052007-
082010-
112011-
12State 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 2010-11 dollars / Source: THEC Student Support Historical AnalysisARRA =American Recovery & Reinvestment Act / MOE=State Maintenance and Operating Expenses
Funding Tennessee Higher Ed
2013-14Formula Systems
Recom-mendation
($) Appro-
priation ($)
Approp Pct of Rec
Approp 1Yr
Chng TBR Four-Year Universities
525,519,70
0
307,324,200 58% 4.7%
TBR Two-Year Colleges
335,118,700
194,217,5
00 58% 5.0%
TBR Applied Tech Colleges
93,566,000
53,881,500 58% 3.1%
UT Four-Year Universities
370,233,00
0
212,818,7
00 58% 5.8%
Source: THEC Presentation – Nashville State – August 20, 2013
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Developing a New Formula Model
Source: THEC Presentation – Nashville State – August 20, 2013
Source: THEC Presentation – Nashville State – August 20, 2013
Developing a New Formula Model
Past Concept of Bonus Pay
Enrollment-Based Funding
Performance Funding (5.45%)
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.
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)
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TN Outcomes-Based FormulaUniversity Weighting Structure – 40% Premium in
YellowUniversities APSU UM UTK
Students Accumulating 24 hrs 3% 2% 2%Students Accumulating 48 hrs 5% 3% 3%Students Accumulating 72 hrs 7% 5% 5%
Total Progression 15% 10% 10%Bachelors and Associates 25% 25% 15%
Masters / Ed Specialist Degrees 20% 15% 15%Doctoral / Law Degrees 0% 10% 10%
Research and Service 10% 12.5% 15%Transfers Out with 12 hrs 10% 5% 5%
Degrees per 100 FTE 10% 7.5% 10%Six-Year Graduation Rate 10% 15% 20%
100% 100% 100%
Source: Funding Formula Model Simulation -THEC Website
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TN Outcomes-Based FormulaTwo-Year College Weighting Structure –40% Premium
in YellowCommunity Colleges NESCC PSCC VSCC
Students Accumulating 12 hrs 4% 6% 2%Students Accumulating 24 hrs 5% 7% 3%Students Accumulating 36 hrs 6% 7% 5%
Total Progression 15% 20% 10%Dual Enrollment 5% 10% 10%
Associates 20% 20% 20%Certificates 1-2 Years 17% 0% 4%
Certificates Less Than 1 Year 3% 5% 16%Total Certificates 20% 5% 20%
Job Placements 10% 10% 5%Remedial & Developmental Success 5% 5% 10%
Transfers Out with 12 hrs 10% 15% 15%Workforce Training (Contact Hours) 5% 10% 5%
Awards per 100 FTE 10% 5% 5% 100% 100% 100%
Source: Funding Formula Model Simulation -THEC Website
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Formula Share of Available State Funding
Source: THEC Presentation – Nashville State – August 20, 2013
Institution2011-
12 2012-132013-14Austin Peay 3.6% 3.9% 4.0%East Tennessee 5.9% 5.8% 5.9%Middle Tennessee 9.8% 10.0% 9.8%Tennessee State 4.0% 4.0% 3.9%Tennessee Tech 4.8% 4.9% 4.8%University of Memphis 11.4% 11.1% 10.8%Community Colleges 25.2% 25.3% 25.4%UT Chattanooga 4.5% 4.4% 4.4%UT Knoxville 19.9% 20.4% 20.9%UT Martin 3.1% 3.1% 3.0%Technology Centers 7.7% 7.1% 7.0%Total 100% 100% 100%
2010-11 2011-12 2012-13 2013-14-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Cumulative Change in Appropriations at Community Colleges Due to the Formula
Chattanooga Cleveland
Columbia Dyersburg
Jackson Motlow
Nashville Northeast
Pellissippi Roane
Southwest Volunteer
Walters Total Funding
Source: THEC Presentation – Nashville State – August 20, 2013
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.
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?
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
Changes in Formula Changes made
› 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
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.
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”)
Performance-Based Funding
Tennessee and LouisianaSAIR 2013
Edwin Litolff – elitolff@uls.state.la.us
Greg Schutz – greg.schutz@tbr.edu