Is Outcomes Funding Incoming?

Outcomes Incoming?

The Governor of Texas has endorsed it, as have powerful members of the legislature from both parties. Universities have, over time, come to endorse it, too. And so has the Texas Higher Education Coordinating Board, the state’s clearinghouse for higher education issues. The state of Tennessee has embraced it wholeheartedly, and other states have begun to follow suit. It’s been a buzzed-about issue around the Capitol for years.

And yet the legislature has never approved an incentive-based funding scheme for Texas public universities. As higher education watchers have seen a growing need for credentialed workers, the notion of tying university funding to student success measurements, notably graduation or staying on track to graduate, has grown in popularity. But last session, despite seeming support from both sides of the aisle, outcomes funding plans languished. Universities have had to wait and see whether new plans would be adopted.

In 2015, the question remains: Will outcomes-based funding, as the idea is commonly known, ever really going to happen in Texas?

Perhaps that’s a bit misleading, because at least to some degree, it already has. In 2013, the lawmakers approved a plan that allocates 10 percent of base funding for two-year colleges according to a series of student success metrics. In plain English, a tenth of the budget for community, junior, and technical colleges is tied to things like completion of entry-level math, writing, and reading; students’ retention; and degrees awarded.

Similar plans for four-year universities haven’t been approved yet, but that doesn’t mean legislators aren’t trying.

State Sen. Judith Zaffirini, (D-Laredo), BS ’67, MA ’70, PhD ’78, Life Member, Distinguished Alumna, has introduced Senate Bill 22, which would create a mechanism for outcomes-based funding for universities. Once universities’ base academic budget—so-called formula funding—was met, additional funds would be distributed based on seven student completion metrics. With the data compiled, the institutions would assign one of seven weights (from zero to 25 percent) to each metric, allowing each university to more heavily weight the aspect at which it excels.

Another bill, by Senate higher education chair Kel Seliger (R-Amarillo), would tie the outcomes issue to another contentious collegiate topic: tuition. Specifically, it would bring together outcomes funding with regulating, or rather re-regulating tuition. In 2003, the state deregulated college tuition, allowing universities to set their own tuition rates. Meanwhile, state funding for public universities has been on a decades-long decline. When funding sources dry up, schools increase tuition, and since deregulation, tuition at Texas universities has doubled, according to the Houston Chronicle, which called this year’s session the most likely to regulate tuition since deregulation. Seliger’s Senate Bill 778 marries tuition regulations and outcomes-based funding by allowing institutions to raise tuition once certain performance goals are met.

Once again, outcomes-based plans have bipartisan support. Does outcomes-based funding have a chance this session? The answer, like so many in Texas politics, is the same as it ever was: We’ll just have to wait and see.


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