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Linking Finance to Performance/Outcomes

Linking Finance to Performance/Outcomes. presented to Montana University System Helena, Montana March 11, 2010. Why?. What’s driving this policy shift?. What’s Driving this Policy Shift?. Increasing clarity of goals and an urgency about attaining them National level State level

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Linking Finance to Performance/Outcomes

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  1. Linking Finance to Performance/Outcomes presented to Montana University System Helena, Montana March 11, 2010

  2. Why? What’s driving this policy shift?

  3. What’s Driving this Policy Shift? • Increasing clarity of goals and an urgency about attaining them • National level • State level • Resource constraints

  4. National Level “By 2020, America will once again have the highest proportion of college graduates in the world” President Barack Obama, February 24, 2009

  5. State Level • Board of Regents Goals • Increase educational attainment of Montanans • Assist in the expansion and improvement of the economy • Improve institutional efficiency and effectiveness

  6. United States % OECD Counties Comparing Montana with Nations & Other States in the Percentage of Young-Adult Degree Attainment (ages 25-34) 56 Canada • Korea 54 Japan Massachusetts 52 North Dakota 50 Minnesota • New York 48 New Zealand Connecticut • Iowa • New Hampshire • New Jersey 46 Maryland Nebraska • South Dakota • Vermont 44 Ireland Illinois • Pennsylvania • Rhode Island Norway Virginia 42 Colorado • Hawaii• Kansas Australia • Belgium • France Wisconsin 40 Denmark • Sweden • United States Washington Finland • Spain Utah 38 Missouri Netherland • United Kingdom Indiana • Maine • Montana • Michigan • Ohio • North Carolina • Oregon 36 Luxembourg Florida Switzerland Georgia • Idaho • South Carolina • Wyoming 34 Alabama • Kentucky • Mississippi 32 Arizona • Tennessee • Texas Iceland Alaska • Oklahoma 30 Poland New Mexico Louisiana • Nevada • West Virginia 28 Greece Arkansas 26 24 Germany 22 Hungary Portugal 20 Austria • Italy • Mexico 18 California • Delaware • Slovak Republic (17%) Czech Republic (15%) Turkey (14%) Source: OECD Education at a Glance 2009

  7. Associate and Bachelors Degrees Needed to Become the Most Educated Country by 2020 Additional Annual Degree Production Needed – 150,528 per Year Current Annual Degree Production – 2,252,212 Increase in State and Local Funding at Current Cost per FTE Note: Assumes private institutions will maintain current share 7 7

  8. Annual Percent Increase Needed to Reach 2020 Goal of 51% Colorado New Jersey Minnesota North Dakota Connecticut New Hampshire Massachusetts Note: for Montana this translates to 596 per year.

  9. Undergraduate FTE Enrollment by Sector (2006-07)

  10. Education Measures Economic Development Measures Public High School Graduation Rates College-Going Rates of Students Directly Out of High School Three-Year Graduation Rates of Associate Students Six-Year Graduation Rates of Bachelor's Students Overall Results on Student Pipeline(Transition & Completion Rates, 9th Grade to College Completion) Migration Rate of College Graduates (Age 22-64) Difference in Earnings Between Associate & High School Diploma Difference in Earnings Between Bachelor's & High School Diploma Personal Income per Capita State New Economy Index How Montana Ranks Among Other States on Selected Measures for Education and Economic Development Source: Tom Mortenson, Postsecondary Opportunity; US Census Bureau, 2006 ACS Public Microdata Sample (PUMS) File, Kauffman Foundation, Regional Economic Information System, Bureau of Economic Analysis, US Department of Commerce

  11. United States Undergraduate Credentials & Degrees Awarded at All Colleges per 1,000 Adults Age 18-44 with No College Degree, 2006 58.7 48.7 33.5 32.0 14.7 Montana Source: NCES, IPEDS Completions Survey 2005-06; U.S. Census Bureau, 2006 ACS

  12. Undergraduate Awards per 100 FTE Undergraduates2006-07 Source: NCES IPEDS Peer Analysis System (http://www.nces.ed.gov/ipedspas/), IPEDS 2006-07 efia2007 Early Release Enrollment File; NCES IPEDS Peer Analysis System (http://www.nces.ed.gov/ipedspas/), IPEDS 2005-06 c2006_a Final Release Completions File Note: Completions reflect 2006-07 total undergraduate degrees (Associate, Bachelors) and certificates (less than 1-year, 1-2 year, 2-4 year) awarded at Title IV degree granting public and private institutions. Enrollments reflect 2006-07 annual FTE undergraduate enrollments at Title IV degree-granting public and private institutions as reported in the IPEDS 2006-07 12-month instructional activity enrollment file. Enrollment data were aggregated from an early release data file and are subject to change.

  13. Public Research Institutions - Bachelors Degrees Awarded per 100 FTE Undergraduates, 2006-07 Sources: NCES, IPEDS 2006-07 Completions File; c2007_a Early Release Data File Downloaded 04-28-08; NCES, IPEDS 2006-07 Instructional Activity File; efia2007 Final Release Data File; NCES, IPEDS 2006-07 Unduplicated Headcount File; effy2007 Final Release Data File.; NCES, IPEDS Fall 2006 Enrollment File; ef2006a Final Release Data File.

  14. Public Masters & Bachelors Institutions - Bachelors Degrees Awarded per 100 FTE Undergraduates, 2006-07 Sources: NCES, IPEDS 2006-07 Completions File; c2007_a Early Release Data File Downloaded 04-28-08; NCES, IPEDS 2006-07 Instructional Activity File; efia2007 Final Release Data File; NCES, IPEDS 2006-07 Unduplicated Headcount File; effy2007 Final Release Data File.; NCES, IPEDS Fall 2006 Enrollment File; ef2006a Final Release Data File.

  15. Public Associate Colleges - Total Credentials Awarded (Less than Bachelors) per 100 FTE Undergraduates, 2006-07

  16. The fiscal realities

  17. Federal Government Economy Available State and Local Govt. Funds Higher Education FederalGovernment The Flow of Funds Tax Policy Stimulus Funds • K-12 • Corrections • Health Care • Other Govt. Income Student Aid Appropriations/Grants Tuition Donors Foundations Corporations Institutions Students Scholarships &Waivers Student Aid (Restricted)

  18. Economy Available State and Local Govt. Funds Higher Education The Flow of Funds - State Tax Policy Income Student Aid Appropriations/Grants Tuition Students Institutions Scholarships &Waivers Student Aid Federal Government

  19. 1.7 DE 1.6 1.5 1.4 CT NJ 1.3 MA AK 1.2 WY State Tax Capacity (Total Taxable Resources Per Capita) MD NY VA NH 1.1 MN CO IL NV WA CA RI 1.0 US PA NE WI NC GA KS HI MO SD IA OH FL IN VT TX OR 0.9 TN AZ ND ME MI UT SC KY 0.8 ID NM LA AL OK WV MT AR 0.7 MS 0.6 0.6 0.8 1.0 1.2 1.4 State Tax Effort (Effective Tax Rate) Source: State Higher Education Executive Officers (SHEEO) State Tax Capacity and Effort—Indexed to U.S. Average

  20. Projected State & Local Budget Surplus (Gap) as a Percent of Revenues, 2016 Source: NCHEMS; Don Boyd (Rockefeller Institute of Government), 2009

  21. State/Local Funding plus Tuition Revenue per FTE StudentAll Institutions (Public) Source: SHEEO SHEF

  22. Revenues Per Student from Net Tuition, State, & Local AppropriationsPublic Research Sources: NCES, IPEDS 2006-07 Finance Files; f0607_f1a and f0607_f2 Final Release Data Files. NCES, IPEDS 2007-08 Institutional Characteristics File; hd2007 Final Release Data File. NCES, IPEDS 2006-07 Enrollment Files; ef2006a, effy2007, and efia2007 Final Release Data Files.

  23. Revenues Per Student from Net Tuition, State, & Local AppropriationsPublic Masters and Baccalaureate Sources: NCES, IPEDS 2006-07 Finance Files; f0607_f1a and f0607_f2 Final Release Data Files. NCES, IPEDS 2007-08 Institutional Characteristics File; hd2007 Final Release Data File. NCES, IPEDS 2006-07 Enrollment Files; ef2006a, effy2007, and efia2007 Final Release Data Files.

  24. Revenues Per Student from Net Tuition, State, & Local AppropriationsPublic 2-Year Sources: NCES, IPEDS 2006-07 Finance Files; f0607_f1a and f0607_f2 Final Release Data Files. NCES, IPEDS 2007-08 Institutional Characteristics File; hd2007 Final Release Data File. NCES, IPEDS 2006-07 Enrollment Files; ef2006a, effy2007, and efia2007 Final Release Data Files.

  25. Net Tuition as a Percent of Public Higher Education Total Educational Revenue by State, FY 2008 Note: Dollars adjusted by 2008 HECA, Cost of Living Adjustment, and Enrollment Mix Source: SHEEO SHEF

  26. Net Tuition Revenues per FTE and State-Funded Tuition Aid per FTE by State, FY 2008(Public Institutions Only) Note: Figures are adjusted for inflation, public system enrollment mix, and state cost of living. Funding and FTE data are for public non-medical students only. Source: SHEEO SHEF

  27. Affordability: Need-based Financial Aid State need-based aid as a proportion of federal need-based aid. Source: Measuring Up 2008

  28. Measuring Up: Affordability Source: Measuring Up 2008

  29. Median Earnings of Population Age 25-64 by Level of Education, 2006 Source: U.S. Census Bureau, 2006 American Community Survey PUMS File

  30. Education Attainment & Personal Income by Montana Counties Personal Income Per Capita Adults aged 25-64 with a Bachelor’s Degree or Higher (%)

  31. Adjusting to Changed Circumstances Improving Productivity

  32. Productivity: Total Funding per Degree/Certificate(Weighted*, 2006-2007) *Adjusted for value of degrees in the state employment market (median earnings by degree type and level)

  33. Degrees & Certificates awarded per FTE vs. Total Funding per FTE (2006-2007) Source: SHEEO State Higher Education Finance Survey 2008: NCES IPEDS Completions Survey

  34. Performance Relative to Funding: Bachelors Degrees Awarded per 100 FTE Undergraduates(Public Research Institutions) Performance (2006-07) Total Funding per FTE (2006-07) Source: NCES, IPEDS

  35. Performance Relative to Funding: Bachelors Degrees Awarded per 100 FTE Undergraduates(Public Bachelors and Masters) Performance (2006-07) Total Funding per FTE (2006-07) Source: NCES, IPEDS

  36. Performance Relative to Funding: All Credentials Awarded per 100 FTE Undergraduates(Public Two-Year Institutions) Performance (2006-07) Total Funding per FTE (2006-07) Source: NCES, IPEDS

  37. How? What are Emerging Best Practices?

  38. Basic Principles • Applied to allocation of base – not just a small add-on • Few factors that can be measured unambiguously • Different factors for different types of institutions • Research • 4-Year teaching • 2-Year • Methodology is transparent – incentives created are linked to goals in obvious ways • They can be applied in good times and bad

  39. Emerging Practices • Using completed SCH – not enrolled SCH – as driver in calculating base • Additional funds tied to specific goals • Increasing number of graduates – with variations for • At-risk students • Students in priority fields • Increasing research funding from sources other than state or institution’s own funds • “Momentum Point” attainment in two-year institutions

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