State University Funding Formula Development

State University Funding Formula Development

Board of Higher Education Meeting | June 16, 2015

Sean P. Nelson, Deputy Commissioner for Administration and Finance

The National Context: A wave of outcomes-based funding

WA

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CA

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OK

WI

NE

HI

ID

WY

AZ

KS

ND

IA

AR

UT

NM

TX

MN

MO

LA

SD

MS

KY

IL

MI

NY

GA

SC

VA

MD

AL

TN

IN OH

PA

FL

NC

WV DE

NJ

ME

VT NH

MA

RI

CT

Implementing

Implementing in one Sector

Under Development

Active Interest

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Massachusetts General Law, Chapter 15A, Section 15B stipulates:

“The board of higher education shall develop the formulas for the institutions within the state university and community college segments…”

FY2015 General Appropriations Act (GAA) states:

“For additional operational funding for state universities for efforts which advance the goals of the commonwealth vision project; provided, that the state universities shall work in conjunction with the house and senate committees on ways and means to develop a performance-based funding formula for fiscal year 2016; provided further, that funds shall be expended for costs related to the development of said formula”


The Legislative Charge

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RFP: Following passage of FY15 budget, DHE issued an RFP for consultant to aid in the development of funding formula, in collaboration with state university stakeholders

Working Group: DHE convened working group with representatives from all nine state universities, legislative committees on ways and means, Executive Office of Administration and Finance (A&F), and DHE

Planning Sessions: Funding formula working group held three planning sessions between February and May of 2015 to deliberate and agree upon the various metrics for inclusion

Webinar: A webinar to communicate primary tenets and outcomes of the formula to broader stakeholder group is scheduled for Friday, June 19 at 11am


The Planning Process

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College Participation Raising the percentage of high school graduates going to college—and the readiness of these

students for college-level work

College Completion Increasing the percentage of students who complete degree & certificate programs

Student Learning Achieving higher levels of student learning through better assessment and more extensive use

of assessment results

Workforce Alignment Aligning occupationally oriented degree and certificate programs with the needs of statewide,

regional & local employers

Preparing Citizens Providing students with the knowledge, skills & dispositions to be engaged, informed citizens

Closing Achievement Gaps Closing achievement gaps among students from different ethnic, racial, gender and income

groups in all areas of educational progress


The System-level Outcomes

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Funding formula working group recommended a set of metrics and sub-metrics to be used in assessing outcomes for the state universities.

College Participation ▪ Closing the underrepresented minority (URM) gap

▪ Students retained with 30 credit hours (SCH)

▪ Students retained with 60 credit hours

College Completion ▪ Graduation rate improvement

▪ Degrees per 100 undergraduate full-time equivalent (FTE) students

▪ Degrees per 100 graduate full-time equivalent (FTE) students

▪ Year-over-year increases in the total number of degrees

Workforce Alignment ▪ Increases in the numbers of priority-defined degrees

Degree Productivity ▪ Degrees per $100,000 of total revenue


The Metrics

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The five metrics are weighted:

College Participation 20%

College Completion 30%

Workforce Alignment 17.5%

Degree Productivity 17.5%

Special Mission Institutions 15% For example: If the available funding allocated totals $10 million, performance on

“College Completion” would net a total $3 million in available funding.


The Methodology

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Current outcomes-based formula acknowledges that not all metrics align well with missions of MassArt, Mass Maritime, and MCLA All three campuses still measured in College Participation

and College Completion metrics Formula exempts special-mission institutions from

Workforce Alignment and Degree Productivity and instead assigns a “carve-out” of 5% of the total funding allocated (≈$278K for each institution)


The Special-Mission Institutions

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The Funding Outcomes Massachusetts Department of Higher Education: State University Funding Model

Funding Allocations to State Universities

Funding Outcomes: FY 2016 14-15 Appropriations

$ -

Estimated 15-16 Appropriations

$ -

Funding for Outcome Based Formula

$5,560,108

Allocation Split New Money to Performance

Only?

Total from Total from Total from Total from Special Mission Total

Proportion to Base Funding College

Participation College

Completion Workforce Alignment Productivity Subsidy Allocation

Proportion to Outcome Funding

Yes Bridgewater State University $ 215,836 $ 157,902 $ 231,446 $ 150,432 $ - $ 755,616

Cost of Operations Subsidy (type "Yes" or

"No")

Outcome Based Metrics and Weights Fitchburg State University $ 158,785 $ 104,047 $ - $ 150,432 $ - $ 413,264

College Participation 20%

Closing the URM Enrollment Gap 33% Framingham State University $ 139,480 $ 235,308 $ 361,340 $ 181,420 $ - $ 917,547

Number of Students who Cross 30 SCH Threshold 33%

Number of Students who Cross 60 SCH Threshold 33% Massachusetts College of Art $ 57,012 $ 206,016 $ - $ - $ 278,005 $ 541,034

Participation Group Total 100%

College Completion 30% Massachusetts College of Liberal Arts $ 82,405 $ 218,050 $ - $ - $ 278,005 $ 578,460

Five-Year Graduation Rate Improvement 25%

Undergraduate Degrees per 100 FTE 25% Massachusetts Maritime Academy $ 26,046 $ 181,214 $ - $ - $ 278,005 $ 485,266

Graduate Degrees per 100 FTE 25%

Year-over-Year Increases in Total Degrees Produced 25% Salem State University $ 164,698 $ 116,825 $ - $ 184,939 $ - $ 466,462

Completion Group Total 100%

Workforce Alignment 25% Westfield State University $ 116,128 $ 167,650 $ 101,553 $ 153,545 $ - $ 538,875

Year-over-Year Increases in Priority Degrees Produced 100%

Workforce Group Total 100% Worcester State University $ 151,631 $ 281,021 $ 278,680 $ 161,881 $ - $ 873,213

Productivity 25%

Degrees per $100,000 of Revenue 100% Total - State Universities

$ 1,112,022 $ 1,668,032 $ 973,019 $ 973,019 $ 834,016 $ 5,560,108 Productivity Group Total 100%

At-Risk Student Bonus 1.0

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A dashboard tool will allow for a user-friendly and dynamic visualization of changes in basic data and weights—will be demonstrated during webinar


The Dashboard Tool

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Funding allocations based on the metrics and weights as detailed will be sent to the campuses after July 1st (FY16)

Additional review and further refinement of the funding formula will be necessary going forward, including: Review per-student funding levels amongst campuses Explore a finer metric on “Workforce Alignment” Incorporate metrics for “Student Learning” and “Civic Engagement”

Involvement of state universities, legislature, FAAP committee, and BHE on developing a successor iteration


Next Steps

Questions/Comments