The Kentucky Senate’s budget proposal includes a complex funding formula for higher education that would eventually provide most state funding to colleges and universities based on their progress with key measurements, such as retention and graduation rates.
Senate President Pro Tempore David Givens, R-Greensburg, presented the plan to the Senate Appropriations and Revenue Committee Tuesday morning. Senate Republicans are expected to release and vote on their full budget proposal Wednesday.
Gov. Matt Bevin also proposed eventually switching all state funding for higher education to a performance-based model but House Democrats removed that language from their version of the state budget.
Starting in 2018, the Senate plan calls for 25 percent of state funding for universities to be based on the number of degrees produced, retention rates, graduation rates, smaller achievement gaps and other metrics. For example, the two research universities, University of Kentucky and University of Louisville, would be judged on research expenditures, the regional universities on the number of science and technology degrees and the Kentucky Community and Technical College System on workforce training.
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Goals would be individually set for each school. Within each sector — research universities, regional universities and KCTCS — the first school to achieve its goal would get 100 percent of their funding and the others would be ranked below. The percentage of funding based on performance would increase each year.
KCTCS would work under a slightly different system. Each individual college would get 75 percent of its base funding, but the 16 campuses would compete for the remaining 25 percent.
The proposal “can drive better outcomes for students, better investment for taxpayers,” Givens said.
Givens said the plan also includes a provision that would allow the governor to continue funding a school even if it doesn’t meet its goals.
Kentucky State University is excluded from the formula because of severe financial problems right now, Givens said, but it would be expected to create a plan for improvement.
Givens said at least 30 other states already use some form of performance-based funding. The Council on Postsecondary Education has been working with state schools on the issue for at least the past four years, but like many other states, the council’s proposals have always focused on creating performance criteria for state money provided in excess of existing appropriations.
It’s not clear how much funding the Senate will propose for higher education. Bevin’s budget would cut 4.5 percent from colleges and universities this year, and 9 percent the next year, but the House’s version erased those cuts.
Kentucky State University President Raymond Burse said if the cuts were enacted it might have to shut down; Morehead State University’s employees are on an unpaid furlough this week because of declining enrollment and possible decreased state funding.
KSU officials had no comment Tuesday.
“KSU can right the ship,” said budget committee chairman Chris McDaniel, R-Taylor Mill. “Our budget will reflect confidence of this body.”
Rep. Rick Rand, D-Bedford, echoed the skepticism voiced by several Senate Democrats on the budget committee about making universities compete against one another for funding.
“They all have different missions and different populations,” Rand said. “I think we would agree with what many university presidents have said — if you’re going to use that much of our base funding, we cannot support that.”
KCTCS President Jay Box was guarded in his comment on the plan: “We look forward to seeing the Senate’s budget and working with the entire legislature on the development of an equitable state appropriation for our 16 colleges.”
Robert King, president of the Council on Postsecondary Education, said the council appreciates Givens’ interest in performance-based funding.
“While we have not yet seen the details, we look forward to working with Senator Givens, his colleagues in the House and Senate and the governor in developing a model that will meet the needs of our campuses, and most importantly, our students,” King said.