Senate approves performance-based funding formula for universities

FRANKFORT — Postsecondary education funding would be guided by performance-based
measures, such as the number of students receiving degrees, under legislation
approved yesterday by the Kentucky Senate.

Supporters of the legislation say it will phase out a funding model that, instead of
basing funding on educational success, bases it on how much a school received in a
previous budget cycle.

The goal of Senate Bill 153 “is to change this funding model, to refocus us on that
goal of degree attainment,” said Senate President Pro Tem David Givens,
R-Greensburg, who is a primary sponsor of the legislation, along with Sen. Mike
Wilson, R-Bowling Green.

The legislation is the result of a work group made up of the president of the
Council on Postsecondary Education, university presidents, state budget officials
and legislators. The group’s final report endorsed the Council on Postsecondary
Education’s goal of raising the percentage of Kentuckians with postsecondary degrees
or certificates from the current level of 45 percent to 58 percent by 2025.

Under Senate Bill 153, the postsecondary funding formula would appropriate 35
percent of funds based on student success tied to outcomes, 35 percent would be tied
to total student credit hours, and 30 percent would be based on supporting “vital
campus operations and student support,” Givens said.

Prior to voting in favor of the bill, Senate Majority Floor Leader Damon Thayer,
R-Georgetown, described himself as “a tuition-paying parent” who’s grateful that the
state supports its universities. But he said university funding has lacked
accountability. “The universities are going to have to compete in order to get us up
to the national standard in degree attainment and the thresholds included in this
bill,” he said.

Senate Minority Leader Ray Jones, D-Pikeville, said he supported the legislation and
commended those who worked on it, but expressed some reservations.

“We can talk about performance-based funding and all the different goals that are
set out in the bill … but the simple fact of the matter is that unless this
General Assembly is willing to put more money into postsecondary education as we go
forward, the cost of a college degree will only continue to increase for tens of
thousands of Kentucky students who want to better their lives,” Jones said.

The funding model established by SB 153 would be phased in over several years.

“This four-year phase-in before we reach full implementation provides us a period of
confidence that the model is working correctly and provides stability for these
institutions as they move into what is a bold but very appropriate new funding
model,” Givens said.

The bill also calls for a postsecondary work group to review the results of the new
funding approach every three years to see if it is successful and make
recommendations to the General Assembly.

The Senate approved the bill on a 36-1 vote. The measure now goes to the House of
Representatives for consideration.