Kathryn Funk-Baxter
Senior Associate Vice President
for Finance & Administration
Texas A&M University-Corpus Christi
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Flow of funds to universities
Funds flow to institutions of higher education in a
number of ways:
• Direct Appropriations-Formula funds and other
direct appropriations based on identified needs
•
Special Items
• Indirect Appropriations-not made directly to
institution in its portion of bill but used to cover
costs related to health insurance, retirement, and
social security
• Other Indirect Appropriations
• Higher Education Fund
• Higher Education Performance Incentive Funds
• Dramatic Nursing Shortage
Significance of Funding Formulas
Formula Funded
18%
Students
Tuition & Fees
30%
State
Funded
Debt Service
& Capital
11%
State
Benefits
5%
Restricted Income
21%
External Funds
Other Operating
Income
4%
State Funded
Non-Formula
11%
18% of TAMUCC budget is formula funding
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Formula Funding
Two funding formulas and two
supplements:
• Instruction and Operations Formula
•
Teaching Experience Supplement
• Infrastructure Formula
•
Small Institution Supplement
How does the formula generate
Instruction/Operations funds?
Two basic concepts:
•
Weighted Semester Credit Hours
•
Base Period
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Distribution of I/O Formula Funds to
Texas Institutions of Higher Education
UT
14%
Other
Academics
53%
A&M
13%
UH
7%
TX Tech
7%
UNT
6%
Source: LBB 2008-2009 Biennium
The Instruction and Operations Formula
E&G Space Support
5,418,403
Small Institution
Supplement
128,100
Teaching Experience
Supplement
1,262,558
All amounts include General Revenue and Dedicated Appropriated Funds
Instruction &
Operations
28,108,802
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What functions is it designed to fund?
 Faculty salaries
 Departmental operating expense
 Library
 Instructional support
 Research enhancement
 Student services
 Institutional support
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The Importance of Credit Hours
The two formulas are driven solely or partly by semester credit
hours taught.
 The Instruction and Operations formula is driven totally by
credit hours.
 The Infrastructure Support formula, in addition to credit hours
taught, includes academic program mix, staff size, research
expenditures, and Library collection size.
The supplements are driven by sch and headcount.
 The Teaching Experience supplement is driven by the number
of undergraduate credit hours taught by tenured or tenuretrack faculty.
 The Small Institution supplement is given to schools with less
than 10,000 students.
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The Financial Importance of Instruction
 The important research and service missions of the
university bring with them virtually no direct formula
funding. Special Items and Research Development Fund
appropriations can provide funding for these activities.
 From the formula’s perspective, teaching generates
semester credit hours and that counts in generating
most of our state formula funding.
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The “Base Period”
 The base period is the 12 month period used to
measure the SCH to be included in the appropriations
formulas.
 It is the summer and fall of even numbered years and
the spring of odd numbered years.
 This “base period” provides the most recent year of
semester credit hour data available when the
legislature meets in the spring of odd numbered years.
 Base period SCH determines formula appropriations for
the next two years.
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What are weighted credit hours?
We are funded by the number of credit hours we teach in
the base period, but not all credit hours are funded at the
same dollar value.
Semester Credit Hours X Program/Level Weight X Rate ($62.19)
 Conceptually, the formula weighting is supposed to reflect
the differences in cost related to teaching courses at
different levels and in different academic fields.
 Graduate courses, for example, are expected to be taught
in smaller class sections than undergraduate classes so
graduate credit hours are weighted heavier than
undergraduate credit hours.
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What are weighted credit hours?
Courses in different fields are also weighted relative
to each other.
 For example, a credit hour in a lower division
History course earns less formula funding than
that of a lower division course in Art or
Engineering.
 All these weightings are displayed in a chart
called the “Formula Matrix”.
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THECB Weighting Matrix
Weighting
Lower
Div.
Upper
Div.
Masters
Doctoral
Liberal Arts
1.00
1.72
4.18
9.29
Science
1.71
2.97
8.09
20.52
Fine Arts
1.39
2.32
5.43
7.19
Teacher Education
1.42
1.74
2.48
7.64
Agriculture
1.87
2.52
7.07
9.91
Engineering
2.41
3.87
7.63
15.96
Home Economics
1.06
1.70
2.86
6.62
Law
Special
Prof.
3.86
Social Services
1.94
2.05
2.97
13.84
Library Science
1.14
1.09
2.63
6.65
Vocational Training
1.66
1.97
Physical Training
1.29
1.28
Health Services
1.24
1.98
3.21
8.49
8.49
Pharmacy
0.71
4.24
19.87
29.55
3.79
Business Administration
1.11
1.73
3.42
24.27
5.46
19.12
Optometry
Teacher Ed Practice
1.30
1.78
Technology
1.90
2.38
4.41
3.37
Nursing
1.94
2.45
4.73
10.64
Developmental Ed
1.00
Veterinary Medicine
7.00
16.53
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Weighted Credit Hours
Weighted credit hours are credit hours taught
multiplied by the weighting matrix
For example:
 A 3 hour lower division history course with 20 students enrolled
would generate 60 weighted SCH (20 students x 3 SCH x 1.00
weight).
 A 3 hour masters level business course with 20 students enrolled
would generate 205 weighted SCH (20 students x 3 SCH x 3.42
weight).
 A 3 hour doctoral education course with 20 students enrolled
would generate 458 weighted SCH (20 students x 3 SCH x 7.64
weight).
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Getting from weighted SCH to
Instruction & Operations income
Each biennium, the appropriations act specifies the dollar
value of each weighted semester credit hour.

For FY 2010, the value is $62.19 per weighted SCH .
So, looking at our examples again:



The lower division History course earned $3,731
(60 wsch x $62.19).
The Masters Business course earned $12,749
(205 wsch x $62.19).
The Doctoral Education course earned $28,483
(458 wsch x $62.19).
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Teaching Experience Supplement
E&G Space Support
5,418,403
Small Institution
Supplement
128,100
Teaching Experience
Supplement
1,262,558
All amounts include General Revenue and Dedicated Appropriated Funds
Instruction &
Operations
28,108,802
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Teaching Experience
 This is a simple add-on to the Instruction and
Operations formula.
 It provides an extra 10% formula income bonus for
undergraduate credit hours that are taught by tenured
and tenure track faculty.
 The intent is to reward institutions for NOT using TA’s
and Adjuncts to teach undergraduates
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Distribution of Infrastructure Formula Funds
to Texas institutions of Higher Education
UT
17%
Other Academics
50%
A&M
14%
UH
7%
UNT
6%
Source: LBB 2008-2009 Biennium
TX Tech
6%
Infrastructure Support Formula
E&G Space Support
5,418,403
Small Institution
Supplement
128,100
Teaching Experience
Supplement
1,262,558
All amounts include General Revenue and Dedicated Appropriated Funds
Instruction &
Operations
28,108,802
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Infrastructure Support
 Funded on a space-need projection model
developed by the Coordinating Board
 Not on the space you actually have
The model has various dimensions:
 Teaching Space
 Library Space
 Research Space
 Office Space
 Support Space
 Utilities
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Small Institution Supplement
E&G Space Support
5,418,403
Small Institution
Supplement
128,100
Teaching Experience
Supplement
1,262,558
All amounts include General Revenue and Dedicated Appropriated Funds
Instruction &
Operations
28,108,802
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Small Institutions
 This is a simple add-on to the Infrastructure formula.
 It provides extra funds to institutions with fewer than
10,000 students.
 The intent is to provide space support equity to the
smaller institutions.
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