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Editorial

Heed leaders’ cautions on college funds

Gora

Imagine legislator compensation based on the volume and quality of bills each lawmaker passes. Then imagine the formula used rewarded some at the expense of others. That would certainly not be a simple process to design or implement, but easier to meet than the goals driving performance-based funding for public colleges and universities.

As the General Assembly crafts a biennial budget with higher education allocations based on such a funding formula, it should come as no surprise that university leaders take issue with its application to their schools. As the front line in Indiana’s effort to increase the number of college graduates, their views shouldn’t be overlooked.

Beginning in 2007, 65 percent of the new money allocated for higher education was distributed based on performance: the increase in number of degrees awarded, number of degrees completed within four years and more. Adjustments were made in 2009, with no new funds added and 2 percent of base funding tied to performance. The 2011-13 budget increased that percentage to 5 percent, again with measurement changes. The Indiana Commission for Higher Education has recommended the percentage be increased to 7 percent by budget year 2015, with significant changes to the formula.

IPFW is facing more than an $8 million shortfall next year, $1 million of that due to the performance-based formula. Chancellor Vicky Carwein pointed out in a recent column that the calculation does not account for the high enrollment of first-generation or transfer students.

President Jo Ann Gora of Ball State University told legislators last month that a cumulative loss of $77 million is “unsustainable.” BSU is punished for raising admissions standards, she said.

“We would like a greater recognition of the quality of the education experience,” Gora said in an interview, noting that the university increased its graduation rate by 12 percent over the past decade. “We believe, and our trustees believe, in our approach. That is why we are so troubled that this formula does not recognize our success.”

President Daniel Bradley of Indiana State, in a meeting last week with The Journal Gazette editorial board, said the major drawback with the formula is the overall lack of funding involved.

“The real issue with performance funding is that it’s really difficult when there is no new money,” he said. “When the money comes out of someone else’s hide, it does nothing to encourage cross-campus cooperation.”

And Indiana University President Michael McRobbie told the editorial board Friday that, while the university wholeheartedly supports the concept of performance-based funding, the challenge is tying it to the varying missions of the state’s institutions.

“If one is to have a really workable formula, it needs to be tied more closely to mission and outcomes,” he said.

Fortunately, higher education Commissioner Teresa Lubbers seems to recognize the need to invest more dollars.

“Yes, there will be a cost associated with increasing degree-production and education-attainment levels,” she said in a State of Higher Education address last month. “But we must pay for what we value to keep pace with the growing workforce demand for skilled college graduates.”

More money for colleges and universities will help meet the goals of performance-based funding, but so will changes made at the recommendation of experienced leaders who work each day to help students become graduates.

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