TERRE HAUTE —
Indiana State University’s state appropriation could be cut nearly $3.4 million under a performance-based funding formula recommended by the Indiana Commission for Higher Education.
The funding formula, approved last Friday, is a recommendation to the General Assembly for the 2013-15 biennial budget. The criteria include improvements in degree completion and college persistence or retention.
Under the formula, each of the seven public colleges and universities contributes a portion of its appropriation (6 percent in fiscal year 2014 and 7 percent in 2015) to a performance-based funding pool. The money is then reallocated back to the institutions based on performance in seven areas, according to ISU President Dan Bradley.
“The Commission’s recommendations would result in a cut in appropriation to Indiana State of nearly $3.4 million over the coming biennium,” he said. “It is important to remember that this is only the beginning of a lengthy process.”
Ultimately, the Legislature approves state funding levels for the colleges.
The seven performance criteria include overall degree completion (affecting all colleges); at-risk student degree completion (all colleges); high impact degree completion in STEM [science, technology, engineering, math] fields, which applies to four-year research campuses; student persistence (all non-research campuses); remediation success (two-year colleges); on-time graduation rates (all colleges); and an institution-defined measure that focuses on reducing the cost of attendance for students (all colleges).
ISU “strongly supports performance-based funding, and I believe it is an essential mechanism that will help both our university and the state of Indiana meet its goals,” Bradley stated in a communication to the campus community.
“However, I am concerned about the process being utilized to administer the performance-based funds. Of primary concern is basing the performance funding levels on data from 2006-2008. Students from the class of 2006 entered Indiana State 10 years ago. Using data this old does not provide an accurate assessment of current performance. Indiana State is on the right track in improving its performance metrics but the current formula does not recognize or reward the progress made in the past several years,” he stated.
According to the Commission’s recommendations, more than half (55 percent) of performance dollars would be earned through increases in overall degree completion and on-time graduation rates.
About a third (30 percent) of performance dollars would reward progress in student persistence rates and degrees earned by low-income students.
The remaining performance dollars would reward increases in high-impact degrees earned in STEM-related fields (science, technology engineering and mathematics) and improvements on an institution-defined metric that was proposed by each college and approved by the Commission.
Diann McKee, ISU vice president for business affairs, said that over the next biennium, ISU’s state appropriation would be reduced by $4.7 million to help create the funding pool, but it would gain back just $1.3 million based on how it does in the performance metrics.
ISU’s current state appropriation is about $67 million.
ISU does well for the criteria of “on time graduation,” McKee said. About half of the $1.3 million would be for on-time graduation.
ISU does not receive any additional funding for “overall degree completion,” which looks at the change in number of degrees (comparing the average of 2006-2008 to the average of 2009-2011).
There were some years of lower enrollments, and those lower-enrollment classes “are still working their way through the system,” she said.
What’s unknown at this time is whether the state will allocate any new money to higher education in the next biennium, McKee said.
She emphasized the Commission has made a recommendation, and “It’s the first part of a long process.”
Next month, Bradley will make the first of several biennial budget presentations starting with one to the Commission for Higher Education.
Bradley said he, McKee and Greg Goode — ISU’s legislative liaison — will work with the commission, the legislature and the state budget committee to advocate for ISU “and build awareness and understanding of the unique mission our university serves.”
Sue Loughlin can be reached at (812) 231-4235 or sue.loughlin@tribstar.com.
News
New formula would impact ISU’s budget
Recommendation to include performance criteria would cut $3.4M
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