Linking Finance to Performance/Outcomes

1
Linking Finance to Performance/Outcomes

• presented to
• Montana University System
• Helena, Montana
• March 11, 2010

2
Why?

• Whats driving this policy shift?

3
Whats Driving this Policy Shift?

• Increasing clarity of goals and an urgency about
  attaining them
• National level
• State level
• Resource constraints

4
National Level

• By 2020, America will once again have the
  highest proportion of college graduates in the
  world
• President Barack Obama, February 24, 2009

5
State Level

• Board of Regents Goals
• Increase educational attainment of Montanans
• Assist in the expansion and improvement of the
  economy
• Improve institutional efficiency and effectiveness

6
Comparing Montana with Nations Other States in
the Percentage of Young-Adult Degree Attainment
(ages 25-34)
United States OECD Counties
56 Canada Korea 54 Japan Massachusetts
52 North Dakota 50 Minnesota
New York 48 New Zealand Connecticut Iowa
New Hampshire New Jersey 46 Maryland Nebrask
a South Dakota Vermont 44 Ireland Illinoi
s Pennsylvania Rhode Island
Norway Virginia 42 Colorado Hawaii
Kansas Australia Belgium France Wisconsin
40 Denmark Sweden United States Washington F
inland Spain Utah 38 Missouri Netherland
United Kingdom Indiana Maine Montana
Michigan Ohio North Carolina Oregon
36 Luxembourg Florida Switzerland Georgia
Idaho South Carolina Wyoming 34 Alabama
Kentucky Mississippi 32 Arizona Tennessee
Texas Iceland Alaska Oklahoma 30 Poland
New Mexico Louisiana Nevada West
Virginia 28 Greece Arkansas 26 24
Germany 22 Hungary Portugal 20 A
ustria Italy Mexico 18
California Delaware
Slovak Republic (17) Czech Republic (15)
Turkey (14)
Source OECD Education at a Glance 2009
7
Associate and Bachelors Degrees Needed to Become
the Most Educated Country by 2020
Additional Annual Degree Production Needed
150,528 per Year
Current Annual Degree Production 2,252,212
Increase in State and Local Funding at Current
Cost per FTE
Note Assumes private institutions will maintain
current share
7
7
8
Annual Percent Increase Needed to Reach 2020 Goal
of 51
Colorado New Jersey Minnesota North
Dakota Connecticut New Hampshire Massachusetts
Note for Montana this translates to 596 per year.
9
Undergraduate FTE Enrollment by Sector (2006-07)
10
How Montana Ranks Among Other States on Selected
Measures for Education and Economic Development
Source Tom Mortenson, Postsecondary
Opportunity US Census Bureau, 2006 ACS Public
Microdata Sample (PUMS) File, Kauffman
Foundation, Regional Economic Information System,
Bureau of Economic Analysis, US Department of
Commerce
11
Undergraduate Credentials Degrees Awarded at
All Colleges per 1,000 Adults Age 18-44 with
No College Degree, 2006
58.7
48.7
33.5
32.0
14.7
Montana
Source NCES, IPEDS Completions Survey 2005-06
U.S. Census Bureau, 2006 ACS
12
Undergraduate Awards per 100 FTE
Undergraduates2006-07
Source NCES IPEDS Peer Analysis System
(http//www.nces.ed.gov/ipedspas/), IPEDS 2006-07
efia2007 Early Release Enrollment File NCES
IPEDS Peer Analysis System (http//www.nces.ed.gov
/ipedspas/), IPEDS 2005-06 c2006_a Final Release
Completions File Note Completions reflect
2006-07 total undergraduate degrees (Associate,
Bachelors) and certificates (less than 1-year,
1-2 year, 2-4 year) awarded at Title IV degree
granting public and private institutions.
Enrollments reflect 2006-07 annual FTE
undergraduate enrollments at Title IV
degree-granting public and private institutions
as reported in the IPEDS 2006-07 12-month
instructional activity enrollment file.
Enrollment data were aggregated from an early
release data file and are subject to change.
13
Public Research Institutions - Bachelors Degrees
Awarded per 100 FTE Undergraduates, 2006-07
Sources NCES, IPEDS 2006-07 Completions File
c2007_a Early Release Data File Downloaded
04-28-08 NCES, IPEDS 2006-07 Instructional
Activity File efia2007 Final Release Data File
NCES, IPEDS 2006-07 Unduplicated Headcount File
effy2007 Final Release Data File. NCES, IPEDS
Fall 2006 Enrollment File ef2006a Final Release
Data File.
14
Public Masters Bachelors Institutions -
Bachelors Degrees Awarded per 100 FTE
Undergraduates, 2006-07
Sources NCES, IPEDS 2006-07 Completions File
c2007_a Early Release Data File Downloaded
04-28-08 NCES, IPEDS 2006-07 Instructional
Activity File efia2007 Final Release Data File
NCES, IPEDS 2006-07 Unduplicated Headcount File
effy2007 Final Release Data File. NCES, IPEDS
Fall 2006 Enrollment File ef2006a Final Release
Data File.
15
Public Associate Colleges - Total Credentials
Awarded (Less than Bachelors) per 100 FTE
Undergraduates, 2006-07
16
The fiscal realities
17
The Flow of Funds
Stimulus Funds

• K-12
• Corrections
• Health Care
• Other Govt.

Donors Foundations Corporations
18
The Flow of Funds - State
Income
19
State Tax Capacity and EffortIndexed to U.S.
Average
20
Projected State Local Budget Surplus (Gap) as a
Percent of Revenues, 2016
Source NCHEMS Don Boyd (Rockefeller Institute
of Government), 2009
21
State/Local Funding plus Tuition Revenue per FTE
StudentAll Institutions (Public)
Source SHEEO SHEF
22
Revenues Per Student from Net Tuition, State,
Local AppropriationsPublic Research
Sources NCES, IPEDS 2006-07 Finance Files
f0607_f1a and f0607_f2 Final Release Data
Files. NCES, IPEDS 2007-08 Institutional
Characteristics File hd2007 Final Release Data
File. NCES, IPEDS 2006-07 Enrollment Files
ef2006a, effy2007, and efia2007 Final Release
Data Files.
23
Revenues Per Student from Net Tuition, State,
Local AppropriationsPublic Masters and
Baccalaureate
Sources NCES, IPEDS 2006-07 Finance Files
f0607_f1a and f0607_f2 Final Release Data
Files. NCES, IPEDS 2007-08 Institutional
Characteristics File hd2007 Final Release Data
File. NCES, IPEDS 2006-07 Enrollment Files
ef2006a, effy2007, and efia2007 Final Release
Data Files.
24
Revenues Per Student from Net Tuition, State,
Local AppropriationsPublic 2-Year
Sources NCES, IPEDS 2006-07 Finance Files
f0607_f1a and f0607_f2 Final Release Data
Files. NCES, IPEDS 2007-08 Institutional
Characteristics File hd2007 Final Release Data
File. NCES, IPEDS 2006-07 Enrollment Files
ef2006a, effy2007, and efia2007 Final Release
Data Files.
25
Net Tuition as a Percent of Public Higher
Education Total Educational Revenue by State, FY
2008
Note Dollars adjusted by 2008 HECA, Cost of
Living Adjustment, and Enrollment Mix Source
SHEEO SHEF
26
Net Tuition Revenues per FTE and State-Funded
Tuition Aid per FTE by State, FY 2008(Public
Institutions Only)
Note Figures are adjusted for inflation, public
system enrollment mix, and state cost of living.
Funding and FTE data are for public
non-medical students only. Source SHEEO SHEF
27
Affordability Need-based Financial Aid
State need-based aid as a proportion of federal
need-based aid.
Source Measuring Up 2008
28
Measuring Up Affordability
Source Measuring Up 2008
29
Median Earnings of Population Age 25-64 by Level
of Education, 2006
Source U.S. Census Bureau, 2006 American
Community Survey PUMS File
30
Education Attainment Personal Income by Montana
Counties
Personal Income Per Capita
Adults aged 25-64 with a Bachelors Degree or
Higher ()
31

• Adjusting to Changed Circumstances
• Improving Productivity

32
Productivity Total Funding per
Degree/Certificate(Weighted, 2006-2007)
Adjusted for value of degrees in the state
employment market (median earnings by degree type
and level)
33
Degrees Certificates awarded per FTE vs. Total
Funding per FTE (2006-2007)
Source SHEEO State Higher Education Finance
Survey 2008 NCES IPEDS Completions Survey
34
Performance Relative to Funding Bachelors
Degrees Awarded per 100 FTE Undergraduates(Public
Research Institutions)
Performance (2006-07)
Total Funding per FTE (2006-07)
Source NCES, IPEDS
35
Performance Relative to Funding Bachelors
Degrees Awarded per 100 FTE Undergraduates(Public
Bachelors and Masters)
Performance (2006-07)
Total Funding per FTE (2006-07)
Source NCES, IPEDS
36
Performance Relative to Funding All Credentials
Awarded per 100 FTE Undergraduates(Public
Two-Year Institutions)
Performance (2006-07)
Total Funding per FTE (2006-07)
Source NCES, IPEDS
37
How?

• What are Emerging Best Practices?

38
Basic Principles

• Applied to allocation of base not just a small
  add-on
• Few factors that can be measured unambiguously
• Different factors for different types of
  institutions
• Research
• 4-Year teaching
• 2-Year
• Methodology is transparent incentives created
  are linked to goals in obvious ways
• They can be applied in good times and bad

39
Emerging Practices

• Using completed SCH not enrolled SCH as
  driver in calculating base
• Additional funds tied to specific goals
• Increasing number of graduates with variations
  for
• At-risk students
• Students in priority fields
• Increasing research funding from sources other
  than state or institutions own funds
• Momentum Point attainment in two-year
  institutions