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WACTC 2014 Allocation and Accountability Recommendations - Briefing. SBCTC October 2014. Part I. Overview of Allocation Concepts Past and Present. The Allocation Formula – 1985 through 1999. From 1985 to 1999 a multi-stepped formula was used to divide funding among colleges.
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WACTC 2014 Allocation and Accountability Recommendations - Briefing SBCTC October 2014
Part I Overview of Allocation Concepts Past and Present
The Allocation Formula – 1985 through 1999 • From 1985 to 1999 a multi-stepped formula was used to divide funding among colleges. • Formula was provided input based on each college’s expenditure activities (both $ and FTE) from prior years. • Allocated all state funds every year • Five components, with an approach of cost reimbursement • Instruction • Libraries • Student Services • Administration • Plant • Formulas tried to account for: • Economies of scale (small school adjustment) • Variable costs
Environment Changes that impacted efficacy of Previous Allocation Formula • System Expansion • 1991 - Technical Colleges join system • Maintained a simple K12 formula • College Tuition Policy • When formula was adopted in 1985, tuition was collected by colleges and sent to state. • Tuition was a “General Fund Revenue” • System received a single state appropriation • In 1994 the Legislature changed tuition policy – Tuition stayed local • Formula continued to run as built – except now contained after formula adjustments • First adjustment occurred to reflect changing tuition policy • Later allocations were simply adjusted to fit available appropriations.
Internal Issues that Spelled the End of the Old Formula • Complexity of formula made it very difficult to understand. • Changes in statewide tuition policy. • Formula produced unpredictable funding for CCs from one year to the next. • Colleges affected their own and other college’s funding by altering local factors • Salaries, faculty full-time/part-time mix, course coding • Strategies introduced to dampen the impact of these, averaging and time lags, also had effect of slowing formula response to changing circumstances.
Development of Base Plus Allocation Model (currently in use) • Developed by WACTC in 1999-2000, adopted by State Board. • Adjustments made incrementally each year to base budgets rather than starting from zero. • State funding only – Tuition not considered • Outcomes? • College funding was more predictable from year to year • Local decisions & actions would not impact state allocation • Student Achievement has been a recent exception • Base plus method made incremental changes to budget easier to understand.
Base Plus Methodology • Starts with prior year funding and makes incremental changes mirroring legislative budget changes. • Allocates new funding on basis consistent with legislative purposes and an agreed upon ‘best fit’ method • Methods are discussed annually with presidents and approved by the State Board. • Allocates funding reductions based on each district’s proportionate share of state funding. • Used Enrollment Plan to allocate Budgeted General Enrollments • Plan served as the tool for an informed distribution of new funding. • Plan used to distribute new enrollments to each college based various factors (e.g., population growth). • Enrollment plan has lost visibility during era of reductions resulting from the Great Recession.
Bringing the timeline forward 14 years to the present • Ease and predictability in setting the annual allocation has left the process lacking in flexibility to react to changing environment • Overenrolled Districts • Years of budget reductions • Changes in Mission Mix • Growing level of dissatisfaction with Model • Multiple perceived problems in Base Plus that need fixing
WACTC Allocation and Accountability Task Force focused on FIVE problems with current allocation method
Problem Statements – Quick Glance • The current system does not put enough money into performance. Current 2015-17 Budget Request Level for SAI ($17.9 m) is a 21% increase in SAI funding. Ongoing SAI would be 3.5% of appropriation.
2. There is too much of a difference in funding per FTE across the system with no clear reasons for the differences. State Funding Per Target FTE Enrollment Districts
3. There is no recognition of different costs for different programs/mission areas.
4. District enrollment targets are not adjusted in any meaningful way - some districts are chronically over-enrolled, some under.
5.There is not enough focus on setting enrollment targets using agreed-to variables that result in a more equitable distribution of funding across the state.
Part II Allocation Methods: Principles Problems & Solutions
Principles An allocation system should: • Be stable • Be predictable • Be understandable • Treat all colleges consistently and impartially • Do as little harm as possible to other colleges • Allow for flexibility in local decisions about use of funding • Achieve an appropriate balance between access/enrollment and performance/student outcomes
NEXT STEPS Finalize Formula Criteria • WACTC to examine and recommend: • SAI percentage share • Criteria for inclusion as a High Cost, priority course/program • Value of weight to be applied to High Cost, priority courses/programs Finalize Implementation Strategies • Designed to graduate the impact of changing methodologies • Stop loss and Stop Gain measures • Implementation Timing
