Funding Public Higher Education In Colorado

The Commission initiated a funding to review national funding models for higher education led by the National Center for Higher Education Management Systems (NCHEMS). Each institution contributed to the cost of the study and participated in the effort. NCHEMS' key recommendation is to move the funding discussions for higher education away from a cost model to a revenue-driven model. The fundamental question NCHEMS posed was how to determine whether institutions were adequately and equitably funded: i.e., each institution has adequate resources for the unique missions and resulting program offerings that affect cost. NCHEMS identified two sets of national models: one that uses costs, formulas and pieces of the structure of higher education to negotiate funding and the other that uses benchmarks developed through comparative institution analysis taking into consideration revenue in addition to costs. Based on NCHEMS' recommendation to utilize a model that benchmarks data and revenues, comparable institutional benchmarks were developed for each public higher education institution in Colorado. Using a revenue-driven model calculates the total of general tax funds and tuition and fees provided for operation of higher education. This model is not intended to be based on actual costs and does not take into account relative tax bases, governance structures, or history of funding. This model is not intended to serve as a distribution/allocation model. Further work must be conducted collaboratively with all stakeholders before decisions are made on proper allocation models. The following information is attached: (1) Criteria used by NCHEMS to select the benchmark institutions and to show each institution's benchmark/peer groups; (2) Percent of funding Colorado institutions receive compared to their benchmark institutions; (3) Series of charts showing the proportion of revenues as percent of funding by type of institution; (4) Each institution as a percent of their peer/benchmark institutions; and (5) Resident and Non-resident tuition and fee rates. (Contains 30 figures and 28 tables.).

This book chronicles the change in public funding for post secondary education in Colorado from 1970 to 2010. Colorado was ranked sixth among states in per capita funding for higher education in 1970 and declined to 48th in 2010. The study analyzed state appropriations in five broad categories of spending: K-12 primary education, health and human services, courts and criminal justice, and all remaining functions of state government. Findings demonstrate that since 1970, after adjusting for inflation, state general fund budget appropriations have increased by much greater percentages for K-12 education, health and human services, and the courts and criminal justice programs. Higher education general fund appropriations increased by 8.9% over this time period and other parts of state government actually declined. Since 1970, higher education enrollment in Colorado grew by 138%, thus, in inflation adjusted terms, state spending on higher education on a per student basis declined by 55%. The book's recommendations call for leadership to address the underlying problems that are forcing public higher education dangerously close to privatization.

This is the first comprehensive study of performance funding of public colleges and universities, which directly ties some state allocations to institutional results on designated indicators. The book examines performance funding as a national phenomenon, identifying the champions and critics of the program, the arguments for and against its adoption, the most common performance measures used for funding, the characteristics that separate stable from unstable initiatives, and the inherent possibilities and problems. The authors include case studies of performance funding in Tennessee, Missouri, Florida, Ohio, and South Carolina, and explore the reasons why Arkansas, Colorado, Kentucky, and Minnesota first adopted and later abandoned their programs. They examine problems with performance funding, such as the reluctance of the academic community to agree on reasonable goals for undergraduate education or the failure to apply performance funding to the academic departments that are mostly responsible for institutional results on many of the performance indicators. The contributors conclude that although the future of performance funding remains cloudy, one aspect is becoming clear—taxpayers are unlikely to continue to accept the proposition that performance should count in all endeavors except state funding for higher education. Contributors include E. Grady Brogue, Joseph C. Burke, Juan C. Copa, Patrick Dallet, Terri Lessard, Gary Moden, Dr. Robert B. Stein, Michael Williford, and David J. Wright.

In recent years, numerous state-level policies intended to improve the efficiency and effectiveness of higher education have emerged and, in some cases, re-emerged. One such policy that has gained traction in states is performance-based funding--a method of tying state funding for public higher education institutions directly to institutions' performance on pre-specified metrics. This approach represents a departure from the traditional, input-based method of allocating state funds to public colleges and universities, which has historically relied on enrollment counts. Grounded in a theory of policy design that draws attention to the value-laden elements of the policy process, this study examined performance funding policy design, both policy design content and process, in two states: Colorado and Texas. For the analysis, this study employed a multiple case study research design and drew on interviews with 34 policy actors, over a dozen observations of legislative and state higher education agency proceedings, and over 300 documents. Findings from this study indicate that performance funding model designs are overwhelmingly a function of higher education institutions' self-interest, particularly in contexts where institutional representatives have substantial authority over the model design process. The social construction of certain students (e.g., ethnic minority students) as deserving or undeserving of policy benefits also contributes to model designs. Finally, institutional representatives' political power resources are directly associated with the distribution of benefits or burdens to their institution. By deconstructing performance funding policy designs to their constituent parts, this study focused on how and why, given myriad options for performance funding policy designs, certain policy elements were chosen instead of others. This analysis of designs is especially critical given evidence that costly failures in some instances of performance funding may be attributed to poor design, including the use of inappropriate metrics. Moreover, by drawing on a theory of policy design previously unintroduced to the higher education literature and extending the performance funding research base, this study made a number of conceptual and practical contributions, including identifying important considerations for performance funding policy evaluations and for funding model design.

Ultimately, the authors recommend that states create new ways of helping colleges with many at-risk students, define performance indicators and measures better tailored to institutional missions, and improve the capacity of colleges to engage in organizational learning.