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Marshall, WVU bill moving to House for first reading

Apr. 10, 2013 @ 11:27 PM

CHARLESTON -- Two high-profile higher education bills met different fates Wednesday.

Senate Bill 444, which gives Marshall and West Virginia universities more control over capital improvements and investment, was approved by the House Finance Committee and will be up for first reading in the floor session Thursday.

However, Senate Bill 326, which would have created a performance-based funding system for higher education, never made it on to the House Finance Committee's agenda after passing the Senate last week.

Delegate Doug Reynolds, D-Cabell, who serves as vice chairman on the committee, said there were just too many questions about the bill, specifically about the benchmarking system by which institutions would have been graded on.

"The biggest concern was what happens (when) you get further along," he said. "It's real easy in years one and two with benchmarks, but what happens long term?"

He said some of the stakeholders were concerned with the funding model, which would have tied a portion of the state appropriations to the benchmarks.

The benchmarks would have included: 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 bill, sponsored by Sen. Bob Plymale, D-Wayne, was hashed out during several months in 2012 on an interim committee that also included House Education Chairwoman Mary Poling.

Marshall President Stephen Kopp said last month that he supports a performance-based funding model, but his concerns lined up with what Reynolds talked about Wednesday.

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.

The bill's goal was to help meet a goal of 20,000 additional degrees or certificates by 2018.

The other concern was how the funding pool was to created. The language in the bill stated that starting in the 2014-2015 fiscal year, 5 percent of the institution's appropriations would be reallocated 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.

Plymale said he understands the political process and thinks the bill can be further researched and discussed in coming years. But he did say that it was a pilot project that would have included another level of legislative approval next year once the baseline data was looked at in the coming year.

"The finances of the state right now cause you to pause," he said of why some bills have stalled this session. "It's part of the process. Good policy changes don't happen overnight."

Senate Bill 444 received some major amendments in House Education on Tuesday and Finance on Wednesday.

The original version of the bill from the Senate gave more authority to Marshall and WVU in terms of investment power and also removed oversight from the Higher Education Policy Commission in terms of presidential compensation and capital improvement projects.

The House Education amendment took out the presidential compensation language and put in a $30 million cap for projects before seeking HEPC approval, up from $15 million that approved by lawmakers three years ago.

The finance committee amended that cap to $50 million before passing it on to the floor for first reading on Thursday. The language on investment power went unchanged -- Marshall would go from $30 million to $60 million and WVU from $40 million to $70 million. And that's the piece that Plymale said is most important.

"I introduced the bill with that provision," he said, added that he has no issues with the House Education Committee's amendment.

Marshall's chief financial officer Mary Ellen said the $30 million invested through the Marshall University Foundation during the second half of 2012 produced $1.7 million in earnings.

Comparatively, she said the state's $85 million in investments produced only $70,000. Heuton said the difference is the level of risk of the investments, along with having a more diversified portfolio.

If the House approves the bill, which would be on third reading Saturday -- the last day of the session -- the Senate would then also have to approve the changes. If the Senate does not accept the amended bill, it would likely go to a conference committee Saturday night to come to some compromise.

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