University Funding Formula Update Nyle Robinson Deputy Director for Fiscal Affairs & Budgeting

University Funding Formula History Much interest from the General Assembly in how funding for universities is allocated Community colleges have been allocating some funds based on a performance funding IBHE has recommended reallocations based on the performance funding formula annually since FY 13 but only once has it been accepted No clear answer to how funds were allocated to universities originally No significant realignment since FY 02 IBHE needs to review the performance formula this year anyway

Measures & Consideration Current performance funding formula conforms closely to the law Annual recommendations have based on between 0.5% & 5% but actual resulting additions & subtractions are only a fraction of that amount for individual universities Formula has no allowance specifically for enrollment (Total or FTE) Allocations heavily depend on results related to enrollment, including graduations & persistence/advancing Other factors include weighting for underserved populations & factors that account for university mission differences

Measures & Consideration Staff have considered a set of factors that could be considered in a revised formula The bulk of the factors are included in some way in the existing formula The state performance funding law does not prohibit the inclusion of other factors Other factors could be included within the existing framework A critical decision is what weight to give each factor

Measures & Consideration The way the formula is currently calculated is difficult to follow from the data/results to the fund allocations Staff will recommend a different way to develop the calculations that is easier stakeholders to follow & explain to others Revising the way calculation are displayed should make little or no difference in the result Universities should be able to see how their performance on a specific measure impacted them

Next Steps The Director will begin working with stakeholders to pull together a group to look at possible revisions to the current formula The law provides some guidance on who should be considered for inclusion on the group The group will also consider if other factors should be made that might result in more fundamental realignment in funding Any recommendations need to be completed in time to be reflected in the IBHE FY 2020 budget recommendations