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Higher education dollars tighten under new Missouri plan

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JEFFERSON CITY, Mo. — Missouri’s Coordinating Board for Higher Education has approved a revised model that awards funding to public colleges and universities based on performance.

The board also has recommended that the state tie 10 percent of allocations to colleges’ and universities’ performance. That proposal, approved Tuesday, would change the source of performance dollars, which previously have been drawn from “new money” for higher education.

State officials said they believe that making performance funding 10 percent of an institution’s overall appropriations, rather than drawing from potentially nonexistent new money, would ensure that colleges and universities continue to prioritize key areas, such as affordability, student success and graduate outcomes.

“The results of this effort, coupled with the existing performance funding model, will provide a more logical basis for funding decisions, regardless of the revenue environment, and are intended to increase the probability that there will be financial rewards for ongoing efforts to achieve statewide goals and objectives,” staff of the Missouri Department of Higher Education wrote in a memo to the board.

Flat funding

Under department recommendations to state lawmakers, who reconvened this week for the 2018 legislative session, public higher education institutions would receive the same amount in state dollars in fiscal year 2019 as they did during the current fiscal year, which ends June 30. Colleges and universities had taken approximately a 9 percent cut in state allocations this year via withholdings by Gov. Eric Greitens.

The recommendation means that Missouri Southern State University, which received approximately $23 million this year, would receive $20.7 million in core funding in 2019, with the remaining 10 percent, or $2.3 million, to be available and awarded based on performance, according to data from the department.

Alan Marble, MSSU president, said he’d prefer that performance funds continue to be drawn from new money rather than from the core.

“In all honesty, higher education in Missouri is funded below the level of 2002,” he said. “And it’s become very difficult to provide our students the highest quality of education possible and the one they deserve.”

Community colleges, which received $143.5 million this year, would receive $129.2 million to be divided among them, with the remaining $14.3 million to be earmarked for performance funding, according to the data.

Jennifer Methvin, president of Crowder College, said she is concerned by the “continual disinvestment” of funds into higher education.

“We understand the economic realities that the state faces, and we certainly embrace the concept of being held accountable for results in higher education, and performance funding is a way to get that done,” she said. “However, at a time when our core funding has decreased year after year, to reallocate part of our declining funding to performance funding is a little difficult.”

The Missouri Council on Public Higher Education had asked the board to request a “modest additional investment” in the operating budget for colleges and universities.

“The staff recommendation of no new investment pushes us farther down an unsustainable path that will adversely impact the quality of our programs and services, and increase costs to students and families,” said Paul Wagner, the council’s executive director, in a letter to the board.

The Missouri Community College Association, in a similar letter to the board, said it supported the revised performance measures but that it also remained “extremely worried” about dwindling financial support from the state.

“There exists in Missouri a middle-skills gap that continues to grow at an alarming rate, resulting in employers across the state reporting they simply cannot expand their businesses due to the shortage of workers with the proper skills and training required for the available jobs,” said Jeff Pittman, chairman of the association’s presidents and chancellors council, in the letter. “Missouri’s community colleges stand ready to do our part to close this gap and put Missourians to work, but we must have adequate resources to be successful in this endeavor.”

New performance model

The revised performance funding model establishes six measures that will be used to evaluate the performance of the state’s community colleges, two-year technical colleges and four-year universities. Performance based on the model is used to determine a portion of state funding allocated to each higher education institution.

“The new performance funding model includes more rigorous measures designed to focus on state goals for student success and reward improvements in efficiency and effectiveness in the public higher education system,” said Zora Mulligan, Missouri commissioner of higher education, in a statement.

The new performance funding model, state officials say, is designed to track whether students are completing certificates and degrees, whether graduates are getting jobs or continuing their education, if college costs are affordable, and if state colleges and universities are spending their funds appropriately. Several of the measures are weighted to reflect Missouri’s growing need for graduates with degrees in science, technology, engineering, math and health care fields, state officials said.

Shortly after the model’s approval last month, MSSU and other institutions received instructions from the state on how to calculate the six measures, said Brad Hodson, MSSU’s executive vice president. He said the assumption is that implementation of the model is immediate.

“We’re running preliminary numbers to analyze how MSSU’s data will fare given the recently received instructions,” Hodson said. “We’ll know more in the early weeks of January after we get a first look at our calculations from across campus.”

Prior to Tuesday’s action tying performance dollars to overall core funding, allocations based on performance were on top of core funding amounts and came from “new” money in the state budget. That meant the amount given to higher education institutions varied from year to year, and sometimes it wasn’t awarded at all.

The last year MSSU received performance funding was fiscal year 2017, according to Rob Yust, vice president for business affairs. MSSU received a net total of $893,094 in performance funding dollars that year on top of net core funding of nearly $23.7 million at the beginning of the fiscal year. By the end of the year, after withholdings by the governor of approximately $1.77 million, the university received a net total of $22.77 million in core and performance funding, Yust said.