1. Enrollment Formula Funding and Outcomes Funding
Gary Johnstone
Deputy Assistant Commissioner
Planning and Accountability
November 5, 2012

2. What are the formulas and how are they used?
THECB
What are the formulas and how are they used?
Using data runs from the THECB, LBB divides this total among the institutions
Legislature decides the total amount to fund in the formula accounts
Each institution is appropriated its “slice” of the formula funding
Formulas give legislators an objective and equitable way to allocate a set amount of funding among institutions in a given sector
Each institution’s funding is proportional to its share of statewide enrollments (with some notable adjustments)
Formulas funding is appropriated directly to the institutions in the General Appropriations Act
THECB

3. Formula Recommendation Timeline and Process
Fall 2011
The three Formula Advisory Committees (FACs), composed of institutional representatives for each sector, considered the Commissioner's charges to examine specific elements of the formulas. Committee members met repeatedly in this timeframe to examine and consider potential changes to the formulas. Final recommendations were provided to the Commissioner in February 2012.
March 2012
The FAC recommendations, and the Commissioner’s recommended amendments, are considered by the Board’s Strategic Planning and Policy (SPP) Committee. The modified recommendations are adopted by the SPP.
This is the timeline for the whole process.
April 2012
The Full Board considers the SPP recommendation. The Board adopts its final recommendation which are provided to the Legislative Budget Board and Governor’s Office of Budget, Planning and Policy.

4. Appropriations Timeline and Process
Late 2012/January 2013
Using data from the spring, summer and Fall 2012 semesters, LBB runs the formulas to determine institutions’ funding for its recommended budget for the 83rd Legislature. Draft appropriations bills are introduced to each chamber and referred to committee.
February-April 2013
House Appropriations and Senate Finance Committees consider and approve appropriations bills. Texas Senate and House of Representatives each adopt its version of the appropriations act. Conference Committee is appointed to resolve differences.
This is the timeline for the whole process.
April/May 2013
Using updated data to include Spring 2013 enrollments, LBB updates the formula runs. Conference committee decides total amount to flow through the formulas. Formulas determine final amounts to go to each institution, which are included in the General Appropriations Act.

5. Overview of the Community and Technical College Formula funding Recommendations
I’m going to start with the two-year colleges

6. Formula funds are just one funding source among many for CTCs
Formula Funds can be used to pay for
Instruction
Department operating expense
Academic Support (includes library)
Student services
Institutional support
This slide is designed to put into context the proportion of the funding that comes from the formula and what part of the funding that is not appropriated. All the formula dollars are GR
This is just the CCs
CCs reported (source and uses) $9.9 billion in Revenue sources for the FY 2010/11 biennium.
$2.4 billion of those were state appropriated.
GR portions reflect budget reductions
Benefits includes HEGI and the retirement that goes directly to ERS.
Other general revenue includes State Grants and Contracts
Local funds include Property Taxes, Local Govt. Grants, gifts, Investment Income.

7. CTCs have one formula with a supplement for critical fields
Instruction and Administration Formula
Based on an annual study of instructional and administrative costs associated with 26 disciplines
Costs are divided by contact hours to establish a cost per contact hour rate
Critical workforce fields (e.g. STEM, nursing and allied health, math and science teaching certifications) receive a 10% bonus in the formula
Unlike universities, there is no infrastructure formula for community colleges
1 formula – based on annual study of instructional and administrative costs
26 disciplines
Median cost determined for each discipline
Costs divided by contact hours = cost per contact hour rate
Current Rates per Base Period Contact Hour and Proposed Rates for Biennium are listed in Appendix C
(TSTC and Lamar State Colleges receive infrastructure funding via General Academic formula)

8. Outcomes-Based Funding Recommendations for Community and Technical Colleges
Fund outcomes outside the current formula using 10% of total funding
Allocate funds based on institutions’ performance on “Success Points” – specific measures of student success and persistence
Implement beginning in Fiscal Year 2014
Because community and technical colleges have a different missions and serve different students than universities, their outcomes-based funding is based on different measures of student success.
Outcomes will represent 10% of their formula funding, with the vast majority continuing to be based on enrollment figures.

9. THECB Outcomes-Based Funding Metrics and TACC Adjustments
Developmental Education
Completion of development education in math, reading and writing
(1 point each)
Gateway Courses
Completion of first college level math and college level English course.
College Credit Attainment
Completion of first 15 college credits and first 30 college credits.
Credentials Awarded
Completion of an associate degree, certificate , or bachelor’s degree (where offered.)
(2 points each)
Transfer to a General Academic Institution
Transfer to a general academic institution after completing 15 hours of coursework.
(2 points)
This slide illustrates the difference between on outcomes based funding between the Coordinating Board recommendation and the TACC recommendation.
The other item that TACC would like is to have the metrics run on a 3 year rolling average to smooth changes across years. They would also like to explore having outcomes based funding metrics based on improvement against current measurements
TACC: Recommends developing metrics for ABE and ESL (Note: CB staff not opposed, but currently have no valid method to measure ABE/ESL as metrics)
TACC:
Does not include first college level English
TACC:
Awards 2.25 points for degrees and certificates in STEM fields