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

2. 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

3. 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

4. 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

5. 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

6. 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