Formula-fed funding for universities

Rose Pulido

The Signal

Citing efforts to assist Texas in “Closing the Gaps” by 2015, an initiative created by the Texas Higher Education Coordinating Board to increase the number of degrees, certificates and other student successes, the THECB made a recommendation to the legislative that would change state appropriated formula funding for higher education.

Currently, state funding for universities is based 100 percent on the number of students enrolled as of the 12th day of class, the state census date of enrollment. The recommendation from THECB is for 90 percent of state funding to continue to be based on enrollment but to reserve 10 percent and base it on student outcomes in terms of: degrees awarded; degrees awarded in critical fields such as science, technology, engineering and math; and for at-risk students.

Dominic Chavez, director of external relations for THECB, said the legislative decided that this was not the right time to execute the 90/10 split, but what they decided to do was to pass House Bill 9.

“House Bill 9 basically sets up a pretty clear mission statement that our funding system for higher education should be aligned with the goals we set forth in our higher education master plan,” Chavez said. “The legislation directs the coordinating board as part of our current statutory authority to develop formula recommendations each biennium before we go into session terms of how much we should fund higher education and what should be the relative weights for various majors and programs.”

The amount of state appropriations was a topic recently discussed at a town hall meeting with University of Houston-Clear Lake President William Staples.

“We’re continuing to see a decline percentage wise in state appropriations to higher education, and that decline is being made up to a certain extent to increases in tuition,” Staples said. “It used to be that UH-Clear Lake and other universities, for the most part, got something in excess of 50 percent of their budget from the state. Now, it’s less than 50 percent, and it’s continuing to go down.”

Although state appropriations for Texas state universities continue to decline, if the legislature approves the 90/10 split in the next session, which Chavez says THECB will continue to recommend, Chavez said these universities will have an opportunity to gain more points for degrees awarded and degrees awarded in critical fields.

A challenge UHCL currently faces with a 90/10 split is that as a higher level institution, its students have passed the remedial stage of the college career, which will automatically put it at a disadvantage for earning that extra incentive for at-risk students.

At-risk students are defined by H.B. 9 as “an undergraduate student of an institution of higher education who has been awarded a grant under the federal Pell Grant program or who on the date the student initially enrolled in the institution was 20 years of age or older; had a score on the Scholastic Assessment Test or the American College Test that was less than the national mean score for students taking that test; was enrolled as a part-time student; had not received a high school diploma but had received a high school equivalency certificate within the last six years.”

“I don’t mind losing out on that [point],” said Rick Short, dean of the School of Human Sciences and Humanities. “We’d have to have a whole structure to deal with developmental and remedial education. It’s needed for some students. Because we admit students who have already been successful for two years, we can pretty much predict that they’re going to be successful anyway.”

This is not the first time THECB has attempted to introduce the idea of formula funding based on a completion rate. In 2007, THECB also recommended a formula funding plan based on percent enrollment vs. outcomes.

“An Overview of the THECB’s Formula Funding Recommendations for the 2010-2011 Biennium” emphasizes a shift to formula funding. The overview lists a change in base funding in which an attempted semester credit hours vs. completed semester credit hours shift in funding would take place over the next four years, going from basing 100 percent of the state’s funding on attempted semester credit hours to 75/25 for the first year, 50/50 for the second year, 25/75 for the third year, and finally zero funding based on attempted semester credit hour to 100 percent funding for completed semester credit hours by the fourth year. This proposal was recommended only if a minimum of $200 million was added to state universities’ current base instruction and operations funding.

However, Chavez said that plan was still based on a 90/10 split with the 25 percent shifts over four years only affecting the 10 percent allocated for completed courses. He said it was never proposed to go to 100 percent completion.

“That proposal was when we were looking at basing [formula funding] on course completion,” Chavez said. “In 2007 we were recommending that; again, it was still going to be 90 percent/10 percent enrollments vs. outcomes. What we were going to measure outcomes by was how many students completed a course, but that proposal is long dead gone.”

Although the proposal to base funding on 100 percent course completion is not the one currently being recommended to Texas legislators, a plan phasing to 100 percent course completion over the next four years in 25 percent increments was presented to UHCL faculty last month as a possible proposal; hypothetical repercussions remain a concern.

“One current concern is that students will be encouraged to remain in courses that they are unable to complete with a passing grade rather than dropping and trying again when circumstances are better in terms of their attention to the work,” said William D. Norwood, president of the UHCL faculty senate. “And, of course, we fear that further budget cuts will make it even harder to provide the services students want and deserve.”

Staples points out that course completion is a worthy goal, but there are other considerations that should be taken into account for university funding.

“It’s not just course completion; it’s degree completion,” Staples said. “If you have pay on course completion or degree completion and x number of students drop for whatever reason, you still have the cost of delivering that course.”

Chavez said he expects during the next legislative session to revisit the 90/10 split, again, with 10 percent of the total formula being based on outcomes.

“One of our plans was, and I suspect we’ll still make that recommendation, to phase that transition in,” Chavez said. “In other words, over four years, not just automatically go to a 90/10 split, but to phase that 10 percent in over time so maybe the first year would still be at 100 percent, the next year would be at 95 and 5, and then the next year would be 90/10.”