Kentucky university funds may be based in part on number of degrees

The University of Kentucky campus in Lexington.
The University of Kentucky campus in Lexington.

For the past few months, Kentucky’s university presidents and policymakers have tried to create a way to tie some of their state funding to outcomes like higher graduation rates and more degrees in science and technology.

What they have come up with, however, is far more sweeping: A new statewide funding formula that could determine how all state appropriations are handed out. On Monday, the presidents held their final meeting at the Council on Postsecondary Education, and said they were close to a plan that they could present to Gov. Matt Bevin and the General Assembly by the Dec. 2 deadline.

“My hope is we can present a model with enough merit and consensus that the General Assembly can have confidence that it will work,” said Western Kentucky University President Gary Ransdell, who’s been chairing the task force. “There’s a lot at stake for Kentucky and our institutions, that’s why concerns and emotions have run deep.”

The formula will have to divide up $49 million, the 5 percent that Bevin appropriated to outcomes in the next fiscal year. But depending on what kind of legislation is written in the upcoming session in January, the formula could quickly encompass all funding.

Under a model developed by the group, about 35 percent of funding would be based on student success. So schools would have to improve in the following areas: the number of bachelor’s degrees produced, the number of STEM + H (science, technology, engineering, math and health) degrees produced, the number of degrees earned by underrepresented minorities and degrees produced by low income students. Each of those would have different weights, with the biggest weight on bachelor’s degrees. Weights will also distinguish between the research universities — the University of Kentucky and University of Louisville — the state’s regional universities and the Kentucky Community and Technical College System. Eventually, schools would compete with each other for that funding, based on their rates of improvement.

Schools would also get credit for the number of credit hours earned over time.

Then the group added what they called “open the doors” funding based on campus maintenance and operation of the campus, and academic support, based on student enrollment.

Under one scenario, the funding formula would be basically divided the following way:

▪ Maintenance and operations: 10 percent

▪ Institutional support (cost of instruction and student services): 10 percent

▪ Academic support (based on student enrollment): 10 percent

▪ Course completion: 35 percent

▪ Student success (degrees produced with various weights): 35 percent.

The new formula will replace what experts call a funding “methodology,” in which universities have been funded based on what historical precedent, in other words, they get what they got the year before.

“We allocated money based on historic shares, but that never made good sense,” said Sen. David Givens, R- Greensburg, who served on the task force and will be involved in writing any legislation that emerges. “This will create very positive mindsets among the universities. I’m happy with the effort and I feel like I’ll be happy with the product.”

Not everyone is happy, however. Officials at Northern Kentucky University and Western Kentucky University had been pushing for a new funding formula for years because they experienced the most growth in the past few decades, but had not received commensurate funding. But Morehead State University President Wayne Andrews says he has a problem because the formula does not taken tuition into account, and several schools charge higher tuition and get more from out-of-state students.

“The model is fundamentally flawed because it only takes into account general fund money, not tuition,” he said.

In addition, the model’s architects hope that new money will help move it along, although legislators have not given them reason to hope that almost a decade of funding cuts will turn around.

“There needs to be some incentives other than redistributing existing money,” Ransdell said.

More than 30 states already have performance funding as part of their funding, but those have always been added with new money, not base funding. It’s never before been tried with an existing formula. Recent reports on performance funding have found mixed results.

Bevin spokeswoman Amanda Stamper said Bevin appreciated the task force’s work.

“The governor looks forward to receiving the final report this week and working with the General Assembly to implement a higher education performance funding model that supports his vision to educate Kentucky’s workforce, increasing opportunity throughout the state,” she said.

Advocacy groups, like the Kentucky Center for Economic Policy, expressed cautious optimism.

“It’s good to see that greater emphasis is being given to the success of low-income and underrepresented minority students in the proposed model than when these conversations began several months ago,” said Ashley Spalding, a higher education research associate with the group. “However, many questions still remain about what the unintended consequences of the proposed formula may be on low-income, minority, academically under-prepared and adult students. The proposed formula could do more to ensure that it promotes success for all Kentucky students.”

CPE President Bob King said the final report would have a signature page for everyone who supports the model.

“What we’ve done is developed what we think is the fairest way to distribute state funds to our universities,” he said.

Linda Blackford: 859-231-1359, @lbblackford