Panel releases changed higher ed funding plan

Missouri's higher education system would be $388 million underfunded if lawmakers adopt a funding formula proposed Monday by the Legislature's Joint Committee on Education.

If that formula had been in place this year, only Lincoln University would be receiving more money than the formula proposes to distribute - $265,374, because of a funding boost the school received about six years ago, based on its land grant mission.

The 12 community colleges, Linn State Technical College and Missouri's nine other colleges and universities would be anywhere from $655,000 to $166 million behind where the formula says they should be.

Last year, the Legislature decided it would create a formula to provide state aid to all public higher education institutions, similar to the formula used for distributing money to Missouri's 520 public elementary and secondary school districts.

That law also requires the new, higher education formula to be in effect by the end of this year, so it can be used in next year's budget writing.

The formula released late Monday morning may not be the final plan submitted to lawmakers this year.

After taking several weeks of comments on a previous version of the proposal, state Sen. David Pearce, R-Warrensburg and the joint committee's chairman, told the committee, "We're going to take about another week's worth of comments (because) we know that the information we give out today will generate quite a bit of interest."

The proposed formula includes some money the schools would receive based on their performance.

"We have 13 unique institutions, and our funding doesn't reward performance," Pearce told the committee. "It's (only) historical funding so, if we decide to give increases, they all get increases. ...

"And that is, simply, a model that probably will not work in the future."

Trevor Foley of the Senate's Appropriations staff told committee members the proposed formula includes standardized rates for each credit hour of instruction, each school's costs for instruction, research, public service, student services, academic support and institutional support - and it takes into account the number of students at each school.

"The totals for the six categories then roll into one total, the formula grand total," Foley said.

"Basically, that is what the institutions should be spending in those six, core areas.

"And those are the six core areas that the state would be making an effort to support (financially)."

Mike Price of the House budget staff noted Monday's proposal "doesn't speculate on how we would appropriate the money - it is just what the model shows in a snapshot form."

The formula would distribute performance funding in a different way from what the schools asked for, or what Gov. Jay Nixon proposed in last week's State of the State address.

Stacey Preis, the joint committee's executive director, noted the higher education schools "asked that only half of new revenue be directed to performance funding, and not to exceed 3 percent of the base funding, (while) the governor's ... budget calls for all new revenue to be directed toward those performance measures.

"What we have proposed is that 10 percent of the calculated appropriation would be held until it's determined whether the institutions met their five performance measures."

Nixon told reporters at a Monday afternoon news conference: "I don't think performance funding should merely be based on the size of your appropriation the year before.

"And I think the cooperative, collaborative method that we've been able to put together the last two years will get more impact for students (and), I think, is the right policy."

Preis noted the committee's proposal "would be part of the budget every year," while the governor's plan relies on increased funding each year.

Pearce told reporters after Monday's meeting: "We felt it was important that, for example, if there are no increases, at least there will be some measures of performance that are taken into consideration" for each school's state aid.

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