Community College Performance

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DRAFT for discussion purposes only
Massachusetts Department of Higher Education:
Community College Performance-Based Funding Model
Sean P. Nelson
Deputy Commissioner for Administration and Finance
Jonathan Keller
Senior Associate Commissioner for Research, Planning and
Information Systems
Presentation Topics
I. Background




The Charge
The Principles
The Process
The Funding
II. Formula
 The Basics of the Formula
 The Dashboard Detail
 The FY15 Budget and Next Steps
Background
Community College Funding Formula: Legislative Charge
Section 171 of the FY13 General Appropriations Act (GAA) states:
“The commissioner of higher education, in consultation with the presidents of
the community colleges and representatives of the Massachusetts Teachers
Association, shall develop a funding formula for the community colleges
which incorporates the allocation of appropriations to the individual
community colleges based, in part, on performance. “
 Additionally, MGL, Chapter 15A, Section 15B stipulates that:
“ Boards of trustees in each segment of the higher education system shall
prepare their budget request in accordance with funding formulas. The
board of higher education shall develop the formulas for the institutions
within the state university and community college segments in consultation
with the boards and trustees and the secretary.”
Community College Funding Formula: Why?
The funding formula was implemented to address three essential
issues:

The large inequities in per student funding that have
developed among the colleges over time as their annual
appropriations have risen by identical percentages while
their growth rates have varied significantly

Lack of a mechanism for allocating funds in relation to
aspects of institutional performance that reflect statewide
higher education goals

Governor/Legislature emphasis on the role of Community
Colleges in preparing students for jobs in the state’s
rapidly evolving economy
Community College Funding Formula: Establishing a Task Force

Immediately following the passage of the FY13 budget, Commissioner Freeland
established a Task Force on the Community College Funding Formula

To aid in the analysis and development of the formula, the Department of Higher
Education retained the National Center for Higher Education Management
Systems (NCHEMS) to assist the Taskforce in the design and development of the
funding formula.

Task Force held four meetings between July and December 2012 to confer on
the elements of the Formula including:
 Base and Performance funding metrics
 Proportion/Share allocated to Base vs Funding
 Weights to be applied to each individual metric
 Limits regarding annual institutional funding losses or gains

After the Task Force reached a general consensus on a formula, DHE drafted the
Task Force Report and submitted it to each campus president for comment. The
Task Force Report was also shared with other key stakeholders including: EOE,
Governor’s Office, Labor and Workforce Development, Housing and Economic
Development, the chairs of Senate and House Committees on Ways and Means,
and the co-chairs of the Joint Committee on Higher Education.
Community College Funding Formula: Source of Funding
 The formula reallocated the total amount appropriated to
the campuses through the individual line-items in the
FY13 state budget
 A total of $208.2M
 The FY14 collective bargaining costs that were added to the campus lineitems were not subject to the formula
 In FY14, an additional $20M of funding was appropriated
in a new line-item for the community colleges
 This funding was in addition to the individual campus line-item
appropriation
 All amounts were determined by the formula and communicated to the
legislature by the DHE. All Funds were earmarked, by campus, in the
appropriation and transferred to the institutions
In FY14, a total of $228.2M was reallocated using the formula methodology
FY14 Funding Mechanics
Line-item
Institution
Berkshire
Community College
Bristol Community
7503-0100
College
Bunker Hill
7518-0100
Community College
Cape Cod
7504-0100
Community College
7502-0100
7100-4000
Massachusetts
Community Colleges
Base
Appropriation
$20M Allocated
through 7100-4000
Total FY14 Allocation
$
8,569,374
$
1,094,424
$
9,663,798
$
15,224,011
$
2,940,286
$
18,164,297
$
19,194,201
$
2,282,913
$
21,477,114
$
10,536,601
$
343,833
$
10,880,434
$
20,000,000
7100-4000 Massachusetts Community Colleges
For funding to community college campuses in the Commonwealth; provided, that funds shall be expended for the continued implementation of
community college reform, for continued initiatives to strengthen the connections between the colleges, local businesses and regional workforce
investment boards and to improve workforce training at the colleges; provided further, that funding shall be allocated among the campuses using
the formula developed by the commissioner of higher education in consultation with the secretaries of education, labor and workforce
development and housing and economic development; provided further, that the allocation of funds shall be approved by the board of higher
education; provided further, that in developing the allocation among campuses, the commissioner shall ensure that no campus receives less in
fiscal year 2014 than in fiscal year 2013; and provided further, not less than the following amounts shall be made available to the respective
institutions named herein: (a) $1,091,424 to Berkshire Community College; (b) $2,940,286 to Bristol Community College; (c) $2,282,913 to
Bunker Hill Community College; (d) $343,833 to Cape Cod Community College; (e) $1,150,565 to Greenfield Community College; (f) $1,086,747 to
Holyoke Community College; (g) $1,937,548 to Massachusetts Bay Community College; (h) $608,165 to Massasoit Community College; (i)
$1,862,410 to Middlesex Community College; (j) $1,076,995 to Mount Wachusett Community College; (k) $617,047 to North Shore Community
College; (l) $570,697 to Northern Essex Community College; (m) $3,353,379 to Quinsigamond Community College; (n) $340,527 to Roxbury
Community College; and (o) $737,464 to Springfield Technical Community College
Formula
Funding Formula Dashboard
Stage One: Set Funding Allocations
New Funding Allocations FY14
No
Allocate new money directly to Performance?
New Funding Level - No Stop Loss
New Funding Level - With Stop Loss
Past Amounts
$208,154,311
Total State and Local Appropriations
Massachusetts Public Community Colleges
Base Allocation ($)
Base Funding Allocation
Performance Funding Allocation
Cost of Operation Subsidy ($)
Total Allocation
% Difference in
Funding 2013
Total Allocation After Stop
Loss Adjustment
Difference $ (+/-)
between Stop Loss and
FY13 GAA
Percentage Difference
in Funding from FY13
$80,327,156
50%
Amount Allocated:
$80,327,156
Berkshire Community College
$7,988,207
$
2,112,318
$
3,330,594
$
4,500,000
$
9,942,912
24.5%
$
9,207,281
$ 1,219,074
15.3%
Amount Allocated:
$20,000,000
Bristol Community College
$13,885,391
$
6,820,622
$
7,076,763
$
4,500,000
$
18,397,385
32.5%
$
16,699,347
$ 2,813,956
20.3%
Bunker Hill Community College
$17,496,631
$
8,912,763
$
7,603,525
$
4,500,000
$
21,016,288
20.1%
$
19,691,704
$ 2,195,073
12.5%
Cape Cod Community College
$9,823,796
$
3,224,452
$
2,444,272
$
4,500,000
$
10,168,724
3.5%
$
10,167,629
$
Ancillary Budget Amount
Stage Two: Define Weight and Multiplier Values for Performance Allocations
College Enrollment Variables
Performance Allocation ($)
FY13 Funding
Amount
50%
Amount Allocated:
College Completion Variables
Alignment Variables
343,833
3.5%
$ 1,242,322
15.9%
Liberal Arts
1.0
Certificate Completion Weight
10%
Greenfield Community College
$7,805,889
$
2,151,049
$
3,146,823
$
4,500,000
$
9,797,872
25.5%
$
9,048,211
Physical, Bio, Social Science
1.5
Associate Completion Weight
15%
At-Risk Multiplier: Pell
1.50
Holyoke Community College
$16,074,594
$
5,969,313
$
7,197,649
$
4,500,000
$
17,666,962
9.9%
$
17,067,692
$
993,098
6.2%
Math and Computer Science
2.0
Transfers Above 24 SCH Weight
5%
Priority Certificate Multiplier
1.30
Massachusetts Bay Community College
$11,859,106
$
4,470,668
$
6,223,780
$
4,500,000
$
15,194,448
28.1%
$
13,939,229
$ 2,080,123
17.5%
Visual & Performing Arts
1.5
30 Credits Hours Weight
5%
Priority Associate Multiplier
1.30
Pre-Education
1.5
Completions: English Weight
7%
Engineering / Architecture
2.0
Completions: Math Weight
8%
3.5%
Developmental Education
1.5
Awards per 100 FTE
5%
Define Stop-Gain / Alt. Maximum
Trades
2.5
ATD Success Rate (3 Year Average)
45%
100.0%
All weight percentages must equal
100%
100%
Technologies
2.0
Health/Allied Health
2.0
Business
1.0
Services
1.5
Define Stop-Loss / Alt. Minimum
Optional: Cost of Operation Subsidy
Massasoit Community College
$17,376,154
$
6,702,109
$
5,341,321
$
4,500,000
$
16,543,430
-4.8%
$
17,984,319
$
608,165
3.5%
Middlesex Community College
$17,121,183
$
8,213,614
$
7,471,748
$
4,500,000
$
20,185,362
17.9%
$
19,032,193
$ 1,911,010
11.2%
Mount Wachusett Community College
$11,007,508
$
4,743,484
$
3,445,542
$
4,500,000
$
12,689,027
15.3%
$
12,056,206
$ 1,048,698
9.5%
North Shore Community College
$17,629,906
$
6,369,881
$
6,444,258
$
4,500,000
$
17,314,139
-1.8%
$
18,246,953
$
617,047
3.5%
Northern Essex Community College
$16,305,635
$
5,380,009
$
6,239,967
$
4,500,000
$
16,119,976
-1.1%
$
16,876,332
$
570,697
3.5%
Quinsigamond Community College
$12,980,557
$
7,331,544
$
6,406,535
$
4,500,000
$
18,238,079
40.5%
$
16,259,469
$ 3,278,912
25.3%
Roxbury Community College
$9,729,356
$
2,178,260
$
1,079,715
$
4,500,000
$
7,757,974
-20.3%
$
10,069,883
$
340,527
3.5%
$21,070,398
$
5,747,069
$
6,874,664
$
4,500,000
$
17,121,733
-18.7%
$
21,807,862
$
737,464
3.5%
67,500,000 $
228,154,311
9.6%
$ 20,000,000
9.6%
Springfield Community College
2.7
$4,500,000
SYSTEM TOTAL
$208,154,311
$
80,327,156
$ 80,327,156
$
$ 228,154,311
Designed by NCHEMS, 2013
Non-Credit Workforce Development
1.0
The right side of the dashboard (“output side”) reflects the funding outcomes
The left side of the dashboard (“input side”) can be changed, enabling a dynamic
scenario-building assessment and development tool.
The Funding Formula Visualization Tool : The “input” side of the dashboard
Stage One: Set Funding Allocations
Allocate new money directly to Performance?
Total State and Local Appropriations
No
$208,154,311
Base Funding Allocation
50%
Amount Allocated:
$70,327,156
Performance Funding Allocation
50%
Amount Allocated:
$70,327,156
Amount Allocated:
$20,000,000
Ancillary Budget Amount
Stage Two: Define Weight and Multiplier Values for Performance Allocations
 The “Input” side of the
funding formula
includes all of the
component variables,
weights, and multipliers
College Enrollment Variables
Liberal Arts
Physical, Bio, Social
Science
Math and Computer
Science
Visual & Performing
Arts
Pre-Education
Engineering /
Architecture
Developmental
Education
1.0
1.5
2.0
1.5
1.5
2.0
1.5
Trades
2.5
Technologies
2.0
Health/Allied Health
2.0
Business
1.0
Services
Non-Credit Workforce
Development
1.5
1.0
College Completion Variables
Certificate Completion
10%
Weight
Associate Completion
15%
Weight
Transfers Above 24
5%
SCH Weight
30 Credits Hours
5%
Weight
Completions: English
7%
Weight
Completions: Math
8%
Weight
Awards per 100 FTE
5%
ATD Success Rate (3
45%
Year Average)
All weight percentages
100%
must equal 100%
Optional: Cost of Operation Subsidy
Alignment Variables
At-Risk Multiplier:
Pell
Priority Certificate
Multiplier
Priority Associate
Multiplier
1.50
1.30
1.30
Define Stop-Loss / Alt. Minimum
3.5%
Define Stop-Gain / Alt. Maximum
100.0%
2.7
$4,500,000
Designed by NCHEMS, 2013
The Funding Formula Visualization Tool : The “input” side of the
dashboard for funding amounts
Stage One: Set Funding Allocations
 FY14 total
available to be
allocated through
the funding
formula:
$228,154,311*
Allocate new money
directly to Performance?
Total State Appropriations
for Community Colleges
No
$208,154,311
Base Funding Allocation
50%
Performance Funding
Allocation
50%
Ancillary Budget Amount
Amount
Allocated:
Amount
Allocated:
Amount
Allocated:
$70,327,156
$70,327,156
$20,000,000
Cost of Operation Subsidy: $67,500,000
* In FY14 collective bargaining costs for all community college campuses were added
to the campus base appropriations directly and were not subject to reallocation by
the formula
Community College Funding Formula
Basics of the Formula: Cost of Operation Subsidy
 The Task Force recommended that every institution receive a “cost of operation
subsidy” reflective of the minimal requirement for operating a community
college without regard to scale
 $4.5M was recommended as the per-institution subsidy, based an
analyses conducted by NCHEMS
 The amount allocated to the Cost of Operation subsidy in FY14: $67.5M, or
approximately 30% of the total available funding. This amount was deducted
from the total available to be allocated through the Base and Performance
funding metrics.
 Amount available to reallocate after cost of operation subsidy: $160.7M
 The Cost of Operation subsidy is recognized as one of the key areas of
investigation for further refinement of the funding formula
Community College Funding Formula
Components of the Formula: Base Funding
 Base and Performance Funding allocations are split 50/50
The amount allocated to base funding in FY14: $80,327,155
 Base Funding is 35.4% of total amount allocated ($228M)
 Base Funding dollars are to be distributed based on student credit
hours completed in the most recent academic year for which data are
available (for the FY14 distribution, data from FY11 was used)
 By using Student Credit Hours the formula acknowledges
institutional scale. The formula allocates the total base funding pool
to the community colleges based on their percentage of total credit
hours completed.
 The various credit hours are assigned individual weights based on the
cost of instruction for the associated course or program. These weights
reflect research and analyses conducted by NCHEMS
Community College Funding Formula
Components of the Formula: Base Funding, Student Credit Hours Completed
Student credit hours completed
College Enrollment Variables
Liberal Arts
1.0
Physical, Bio, Social Science
1.5
Math and Computer Science
2.0
Visual & Performing Arts
1.5
Pre-Education
1.5
Engineering / Architecture
2.0
Developmental Education
1.5
Trades
2.5
Technologies
2.0
Health/Allied Health
2.0
Business
1.0
Services
1.5
Non-Credit Workforce
Development
1.0
The added emphasis on “noncredit workforce” training
was recommended by Labor
and Workforce Development
and Housing and Economic
Development
Community College Funding Formula
Components of the Formula: Base Funding, Application of Weights
How are the assigned individual weights applied?
 The credits completed in the various discipline clusters are
designated to have specific multipliers that range from 1.0 (no
increased value) to 2.5 (two and a half times the raw value).
The sum of the institutional credits (weighted by the discipline
cluster multipliers) are divided by the sum of weighted credits for
the entire segment to determine the share of base funds that will
be allocated to each institution.
Community College Funding Formula
Basics of the Formula: Performance Funding, College Completion
 College Completion Metrics include several measures of
institutional effectiveness in encouraging students to achieve
successful outcomes.
College Completion Variables
Certificate Completion Weight
10%
# of completed certificates
Associate Completion Weight
15%
# of associates degrees
Transfers Above 24 SCH Weight
5%
# who transfer having completed 24 credits
30 Credits Hours Weight
5%
# complete 30 credits in any given year
Completions: English Weight
7%
# completing a credit-bearing course in English
Completions: Math Weight
8%
# completing a credit-bearing course in Math
Awards per 100 FTE
5%
Degrees and certificates per (FTE) students
ATD Success Rate (3 Year Average)
45%
Achieving The Dream “Success Rate”
All weight percentages must equal
100%
100%
Community College Funding Formula
Basics of the Formula: Performance Funding, Alignment Weights
 The Alignment Metrics focus on areas of performance with specific relevance to
The Vision Project – the Board of Higher Education's strategic plan – and the
Governor’s educational goals. The weights are only applied to completions
 The first metric addresses the goal of
closing achievement gaps. [Weight applied
Alignment Variables
to degree and certificates earned by students
who were Pell Eligible]
At-Risk Multiplier: Pell
2.00
Priority Certificate Multiplier
1.30
Priority Associate Multiplier
1.30
 The last two metrics address the
Governor’s goals of adding credentials in
fields of high employer demand. [Weights
applied to certificates and associates in STEM
fields, health care, life sciences, and IT]
Community College Funding Formula
Basics of the Formula: Stop-Loss/Alternative Minimum Increase
 The Task Force determined that full implementation of the formula in year one would
likely result in overly burdensome financial disruptions for many of the colleges. (For
example, Springfield Tech would have experienced an 18.7% decrease in funds in year one)
 The Task Force initially agreed to include a 5% “stop-loss” provision that would prevent
any one institution from losing more than 5% of their previous year’s budget. It was
ultimately decided that the formula would instead include a 3.5% alternative minimum
provision, which ensures that each campus receives no less than a 3.5% increase.
 It was also decided that in subsequent years of funding there would be a transitional
step taken annually with the goal of full implementation over 4 years (FY14 – FY17). For
FY15, the discussion has focused on reducing the “alternative minimum increase.”
The Funding Formula Visualization Tool : The “output” side of the dashboard
New Funding Allocations FY14
New Funding Level - No Stop Loss
Past Amounts
Massachusetts Public Community
Colleges
FY13 Funding
Amount
Base Allocation
($)
Performance
Allocation ($)
Cost of Operation
Subsidy ($)
New Funding Level - With Stop Loss
%
Total Allocation
Difference
in Funding
2013
Difference $
Total Allocation
(+/-) between
After Stop Loss
Stop Loss and
Adjustment
FY13 GAA
Percentag
Difference
in Funding
from FY13
Berkshire Community College
$7,988,207
$
2,112,318 $
3,330,594 $
4,500,000 $
9,942,912
24.5%
$
9,207,281
$ 1,219,074
15.3%
Bristol Community College
$13,885,391
$
6,820,622 $
7,076,763 $
4,500,000 $
18,397,385
32.5%
$
16,699,347
$ 2,813,956
20.3%
Bunker Hill Community College
$17,496,631
$
8,912,763 $
7,603,525 $
4,500,000 $
21,016,288
20.1%
$
19,691,704
$ 2,195,073
12.5%
Cape Cod Community College
$9,823,796
$
3,224,452 $
2,444,272 $
4,500,000 $
10,168,724
3.5%
$
10,167,629
$
Greenfield Community College
$7,805,889
$
2,151,049 $
3,146,823 $
4,500,000 $
9,797,872
25.5%
$
9,048,211
Holyoke Community College
$16,074,594
$
5,969,313 $
7,197,649 $
4,500,000 $
17,666,962
9.9%
$
17,067,692
$
993,098
6.2%
Massachusetts Bay Community
College
$11,859,106
$
4,470,668 $
6,223,780 $
4,500,000 $
15,194,448
28.1%
$
13,939,229
$ 2,080,123
17.5%
Massasoit Community College
$17,376,154
$
6,702,109 $
5,341,321 $
4,500,000 $
16,543,430
-4.8%
$
17,984,319
$
608,165
3.5%
Middlesex Community College
$17,121,183
$
8,213,614 $
7,471,748 $
4,500,000 $
20,185,362
17.9%
$
19,032,193
$ 1,911,010
11.2%
Mount Wachusett Community College
$11,007,508
$
4,743,484 $
3,445,542 $
4,500,000 $
12,689,027
15.3%
$
12,056,206
$ 1,048,698
9.5%
North Shore Community College
$17,629,906
$
6,369,881 $
6,444,258 $
4,500,000 $
17,314,139
-1.8%
$
18,246,953
$
617,047
3.5%
Northern Essex Community College
$16,305,635
$
5,380,009 $
6,239,967 $
4,500,000 $
16,119,976
-1.1%
$
16,876,332
$
570,697
3.5%
Quinsigamond Community College
$12,980,557
$
7,331,544 $
6,406,535 $
4,500,000 $
18,238,079
40.5%
$
16,259,469
$ 3,278,912
25.3%
Roxbury Community College
$9,729,356
$
2,178,260 $
1,079,715 $
4,500,000 $
7,757,974
-20.3% $
10,069,883
$
340,527
3.5%
Springfield Community College
$21,070,398
$
5,747,069 $
6,874,664 $
4,500,000 $
17,121,733
-18.7% $
21,807,862
$
737,464
3.5%
$208,154,311
$
80,327,156
$ 80,327,156 $
67,500,000 $
228,154,311
SYSTEM TOTAL
9.6%
$ 228,154,311
FY14 GAA allocated the additional $20M via earmarks in line-item 7100-4000
343,833
3.5%
$ 1,242,322
15.9%
$ 20,000,000
9.6%
FY15 Budget Recommendation and
Next Steps
 Roll $20M of FY14 earmarked funds into base appropriations of
campus
 Recommend an additional $20M to be allocated using the same
metrics in FY14
 Hire a Data Auditor to test integrity and quality of data; ensuring
uniform standards and definitions
 Discussion now underway to review minimum gain in FY15 with a
goal of reaching a “no fee” consensus amongst all campuses
 Reconvene Formula Task Force to review and possibly refine
elements of formula for FY16
Keys to Implementation in FY14








Strategic plan at the system level that outlined specific long-term measurable goals,
including meeting projected workforce demand.
Appealed to legislative interest in linking academic performance to funding. To that end,
the Department of Higher Education was granted the statutory authority in FY12 to
“develop a funding formula for the community colleges which incorporates the allocation
of appropriations based, in part, on performance.”
Established task force of community college presidents to determine overall approach
and methodology. Critical to build consensus amongst campuses.
Third-party formula development and validation. Clear communication of data
standards, definitions, and measures.
Incorporated a “hold harmless” feature that prevented any campus from receiving less
than a 3.5% increase in year one.
Pledge to not increase fees if funding formula is implemented with an additional $20M
allocated over FY13.
Commitment by Commissioner Freeland to both the Task Force and the Council of
Presidents that the individual metrics, weights, multipliers, allocation balances, subsidy,
etc were still open to review and enhancement in future funding cycles.
A plan to establish an enhanced audit function to provide a greater assurance that
formula is based on solid, reliable and appropriate representations of institutional
accomplishments.
Additional
Questions?
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