Marshall president concerned with performance funding bill
HUNTINGTON -- Marshall University President Stephen Kopp isn't against legislation to add performance-based funding to public higher education in West Virginia. He just has major concerns with the language in the legislation introduced this session by Sen. Bob Plymale, D-Wayne, and others.
"The devil will be in the details," Kopp said recently.
Among Kopp's chief concerns are that the public higher education institutions will be evaluated wholly, rather than on the outcomes of West Virginia students. That is, he contends, why the state appropriates millions of dollars each year, to see West Virginia students earn a college education.
Though he didn't mention West Virginia University specifically, the demographics of that institution in particular concern him. Why? Because about 52 percent of WVU's student body comes from other states -- many from Pennsylvania, Maryland and New Jersey. At Marshall, nearly 80 percent are from West Virginia, according to figures given to the Faculty Senate in February in a report from the Legislative Affairs Committee.
That means, Kopp said, the educational background that students bring from high school are unequal and can play a role in the outcomes that the performance-based funding is founded upon.
"For those of us who take 75 percent (of in-state students), to be held at the same level with those who have 50 percent coming from different K-12 backgrounds," he said.
While Kopp has his concerns, he said he is a strong advocate of setting benchmarks, citing research out of UCLA that uses formulas to calculate what the student outcomes should be based on a variety of factors that include ACT or SAT test scores.
The benchmarks in the legislation include:
Student success as represented by certificate or degree completion; student progression and persistence towards certificate or degree completion; affordability and productivity represented by on-time certificate or degree completion; institution differentiation as represented by a mission focus on research, job placement, workforce training, etc.; educating priority populations of adult and low-income students; and increasing certificates or degrees in high need fields.
The procedural rules would be set during the upcoming year to establish appropriate weights, based on student numbers, to be assigned to each of those goals. The appropriate weights shall be established to best accomplish the goal of an additional 20,000 certificates or degrees earned in the state system of higher education by July 2018.
Kopp said those weights and benchmarks need to be clearly defined and must be reasonable, because Kopp said at some point they could become cost prohibitive. He also said he would like to see any performance-based funding bill address quality measures and evidence of progress.
"I can't think of a single institution in the state that's not trying to improve," Kopp said.
The other concern is how the funding pool is created. The language in the bill states that starting in the 2014-2015 fiscal year, 5 percent of the institution's appropriations would be re-allocated among all the institutions in West Virginia based on performance among the objectives. Each subsequent year, that figure would increase by 5 percent until 25 percent of the appropriation would be subject to meeting performance goals.
Kopp said he had hoped the state would set aside additional funds, as some other states have, that would be like bonuses for meeting the outcomes. The current language, he said, means having to build a budget without that 5 percent because there's no guarantee, however hard the institution works, that it will reach the benchmarks.
For example, this year, Marshall received $57 million in state appropriations. That means $2.85 million would be gone, left to be earned. What compounds the problem is that Marshall and other public higher education institutions are facing budget cuts for the upcoming fiscal year. That 7.5 percent cut would take Marshall down to about $52 million. So, in a matter of two years, Marshall's budget would drop by nearly $8 million, with a chance to earn less than half back.
Kopp said having to build a budget each year that relies less and less on guaranteed money creates major problems that can't always be answered with tuition increases. A budget must be built on what you know you'll have, he said, not on what you think you could get.
"That percent cannot be base-funding commitments," Kopp said. "It would be ill advised to commit that to pay raises or personnel. It would have to be used for one-time funding."
He said if the policy is not monitored and set up correctly, it could have a catastrophic impact.
"I don't think that's the intent of the legislation," he said, noting that state appropriations are tied to personnel.
Higher education cost
The cost of higher education also is of utmost concern for Kopp and heads of institutions nationwide. According to a recent article from the Chronicle of Higher Education, net tuition revenue made up 47 percent of the public colleges' educational costs in 2012. That was an increase of more than 6 percentage points from the previous year, according to an annual report from the State Higher Education Executive Officers.
In 1987, the report says, net tuition revenue accounted for just 23 percent of those costs. In 2001, tuition was a little more than a third of the costs.
If the budget cuts take effect, then Marshall's $193 million budget will fall below 25 percent in terms of state appropriations.
Mary Ellen Heuton, the chief financial officer at Marshall, said the 2012 appropriation represented 28 percent of the budget. Tuition and fees represented 24 percent. If the budget cut does take place and tuition is increased, she said those percentages will be "pretty close to being even or even tuition overtaking state appropriations."
The remainder of the budget, she explained, comes from auxiliary fees, federal grants, contracts and the Marshall University Research Corporation.
Kopp said if the cuts keep coming and public higher education continues to be treated like a private business, it will be easier to just become a private institution. The consequences of that, he said, would be profits first and tuition hikes to meet those goals.
"Eventually there is a breaking point," Kopp said. "The issue of affordability is critical to this state. That's why public higher education was established. I don't mind paying my taxes to public higher ed."