Senate proposes plan for higher education performance-based funding

Members of the Republican majority in the state Senate are putting forth a plan for performance-based funding for Kentucky’s universities.

In a meeting of the Senate Appropriations and Revenue Committee Tuesday morning, Senate President Pro Tem David Givens laid out the basics of a proposal from his caucus which set metrics for basing state appropriations on performance.

Some of those metrics discussed by Givens included:

• Degrees produced
• Graduation rates
• Retention rates
• Closing achievement gaps
• Types of degrees

In the budget proposal from Gov. Matt Bevin laid out in January, performance-based funding was called to begin implementation in 2018 with 100 percent of the funding to universities being based on performance by 2020. However, no metrics to base this funding on were laid out in Bevin’s plan.

Because of this, the performance-based funding component was left out of the House Democrats’ version of the budget.

Ahead of the Senate Republicans releasing their budget proposal Wednesday, Givens explained that his caucus has been working to set up a system to implement a funding model beginning in 2018.

Givens said that part of their conclusions were based on suggestions from the Council on Postsecondary Education.

In the Senate Republican plan for performance-based funding, the state’s postsecondary institutions would be put into three separate sectors to on which to base this funding—an aspect Givens said is important as the institutions are very different and have different needs and models.

In the first sector would be the state’s two research universities, University of Kentucky and University of Louisville.

In the second sector, the rest of the state’s four year institutions including Western Kentucky University, Murray, Northern Kentucky University, Eastern Kentucky University, and Morehead, would be placed in the same group to compete based on the metrics laid out in the plan.

The third sector would include the Kentucky Community and Technical College System (KCTCS) which would have a share of their funding run through a current formula used by KCTCS and the remainder of the state funding used to have the systems’ 16 campuses compete against each other.

In these three sectors, the highest performer within the division will receive 100 percent of their funding while the others will be placed on a scale accordingly.

Givens explained that in this plan, Kentucky State University is exempted as they face different challenges. Because of those challenges, Givens said they will be looking for a four year action plan from the university.

In terms of what the funding is based upon, Givens stated that the performance of the universities in fiscal years ’11-’14 will serve as the base for the formula with fiscal years ’15 and ’16 used in gains to figure out the correct levels.

In the committee meeting, Givens said this plan is “not about picking winners and losers” as many fear when it comes to performance-based funding models but instead represents what they believe is best for all the postsecondary institutions.

Givens also said that the appropriations to the universities, a current topic of debate in the budget talks, is a separate conversation all together and that their plan can work with any appropriations model.

The plan also includes provisions like a stop gap for the governor to be able to restore funding for a university if they do not achieve needed appropriations.

More details of the plan are likely to be discussed Wednesday when the Senate presents their budget proposal.