NKU president supports outcome-based funding for postsecondary institutions

01/23/2017 12:41 PM

HIGHLAND HEIGHTS – One item likely to see action when the General Assembly returns to the state capitol in February is outcome-based funding for Kentucky’s public colleges and universities.

A Postsecondary Education Working Group, which included the presidents of the states universities and was established in the 2016 biennium budget, met to develop a comprehensive funding model for the allocation of state General Fund appropriations for postsecondary institution operation.

One of the university presidents, Geoffrey Mearns of Northern Kentucky University, has been an advocate for outcome-based funding since NKU is currently funded over $1,000 less per student than the state average.

“The funding for our students and our institution has lagged behind comparable institutions since NKU was created more than 40 years ago,” Mearns said. “The disparity that we presently have is the absence of any kind of a funding formula or rational approach to appropriating the states investment in higher education. Here in Kentucky, we haven’t had a funding formula or a rational method for a generation, nearly 20 years.”

As a result of the budget passed by the legislature in 2016, $42,944,400 was transferred from campus operating budgets to a newly created Postsecondary Education Performance Fund in fiscal year 2017-18, representing 5 percent of the fiscal 2017-18 General Fund appropriations for the public four-year universities (excluding Kentucky State University).

The Performance fund will be distributed to participating institutions based on achievement of performance goals and metrics enacted by the General Assembly, as recommended by the Postsecondary Education Working Group.

It was recommended by the working group that the funding model for four-year universities adhere to the following criteria:

  • The funding model should include all public research and comprehensive universities in a four-year sector performance pool, but contain safeguards to ensure that neither the research, nor comprehensive sector is advantaged or disadvantaged during the first full year of implementation.
  • It should be capable of distributing any level of state appropriations, up to and including 100 percent of allocable resources, among the pubic universities based on rational criteria, including student success, course completion, and operational support components.
  • Allocable resources are defined as state General Fund appropriations of mandated programs and a small school adjustment.

“The first 35 percent is intermediate outcomes, which is, its providing support to institutions based on student credit hours which are earned on that campus,” Mearns said. “Another 35 percent is based on the number of undergraduate degrees confirmed. That is the ultimate outcome that we want. People with a diploma. The other 30 percent recognizes institutional and administrative support.”

It was recommended that the Postsecondary Education Working Group be reconvened every three years to determine if the two-year college model is functioning as expected and to identify any potential unintended consequences.

If legislation is passed, the phase in would begin in fiscal 2017-18, as each sector would use its respective funding model to distribute its share of $42.9 million appropriated to the Postsecondary Education Performance Fund.


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