Public colleges and universities would move to performance-based funding model under bill that cleared Senate committee

02/21/2017 07:22 PM

FRANKFORT — Funding for the state’s postsecondary schools would be based on the numbers of degrees they confer, students enrolled, credit hours earned and other factors under legislation passed by the Senate Appropriations and Revenue Committee on Tuesday.

Senate Bill 153, sponsored by Senate President Pro Tem David Givens, would codify a performance-based funding model described in last year’s biennial budget. The formula would be administered by the Council on Postsecondary Education, and Givens said SB 153 has been backed by all presidents of Kentucky’s public colleges and universities.

The bill passed on a 12-1 vote, with Sen. Robin Webb, D-Grayson, the lone dissenter.

The legislation would be gradually implemented, if passed into law. It includes provisions that would retain funding levels in fiscal year 2019 and limit any reductions to 1 percent and 2 percent in the following fiscal years, respectively.

SB 153 would split public university funding into three tiers: 35 percent would be based on degrees conferred — with some focus on science, technology, engineering and math degrees and those received by low-income and underrepresented minority students — and student progression; 35 percent would be based on credit hours earned; and 30 percent would support campus operations.

Givens, R-Greensburg, said adopting a performance-based funding model would put the state closer to achieving a goal set for Kentucky’s public universities in 1997 to reach the national average in degree attainment. He told reporters that hitting national averages would yield an estimated $500 million in extra tax revenue for the state.

“We sit down and we write that budget based on the way we did it last time,” Givens said of the current budget process.

“The way we did it last time, and so we have a historical shares distortion that says it doesn’t matter how you’re doing, it doesn’t matter if you’re taking on new programs, it doesn’t matter if you’re graduating more students or less students, it doesn’t matter. We’re funding you based on the way we’ve always funded you. This changes that.”

Although most who spoke up Tuesday ultimately voted for SB 153, some senators expressed their misgivings with aspects of the legislation, particularly since it placed regional universities in the same category as the state’s research institutions.

Morehead State University President Wayne Andrews, who stressed that he hoped SB 153 passed,

Sen. Max Wise, R-Campbellsville, said one aspect of SB 153 that troubled him is that student retention is a funding factor.

That could be problematic for some of the state’s public institutions, he said.

“Increasing the retention I think for each individual school, I find that’s going to be a challenge in this bill, just by someone who’s been there with higher education and being with students,” he said. “Not to say that it’s not attainable, but I do think one of the things that we’re going to have to really look at is increasing the retention of students.”

After SB 153 sailed through the upper chamber’s budget committee, Givens told reporters that he expected the measure to reach Gov. Matt Bevin’s desk during this year’s session.

If not, 5 percent of universities’ budgets that had been set aside in the biennial budget for a performance-based appropriation could be lost, he said.

“That money stays in that performance workgroup fund until a point in time at which we can agree to what releasing it would look like,” Givens said.

SB 153 now heads to the Senate for a floor vote.


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