Murray State Officials: Performance Funding Formula "Stacked Against Smaller Schools"

Sep 3, 2018

Murray State University’s Board of Regents is considering a resolution expressing concerns about performance funding. Officials agreed at a recent meeting that the metrics are stacked against the state’s smaller public universities.

Murray State Director of Governmental Relations Jordan Smith attended a Budget Review Subcommittee on Education last week. In his subsequent report to Murray State’s Board of Regents, he noted six of the eight four-year university presidents are new along with many school board members. “There are a lot of folks who want this re-evaluated,” he said.

Smith said the two research universities gain the most and yet mandated pension obligations rest solely with four-year regional universities. When it comes to student success and underrepresented minorities (two performance funding metrics), Smith said, Murray State and Morehead State University are outperforming other regionals. Yet when it came time for the funding distribution, Morehead got $0 and Murray State got $557,800 and other universities received more funding. Kentucky State University also received $0. The Lexington Herald Leader reports Morehead has been vocal over the issue.

The numbers were not displayed publicly during Murray State's two Regents meetings, but a letter and charts describing performance funding for FY 2018-19 were uploaded here by KyForward.com.

Jordan Smith said it was “clear” from the subcommittee meeting that the Council on Postsecondary Education doesn’t want to change the model, but noted some lawmakers appeared open to tweaking the model for Murray State and Morehead. “So that’s, I think, a positive thing for us as we look to the upcoming [legislative] session,” he said.

Performance funding has universities competing against each other on several metrics including the number and type of degrees awarded, course completion and facility size. More about this on the Council on Postsecondary Education website.

In a retreat on Thursday, Murray State Vice President of Finance and Administration Jackie Dudley explained the $31 million appropriated by the General Assembly towards performance funding. Of that amount, $24 million was allocated to four-year schools and $6.8 million for community colleges. She said Murray State is not competing against community colleges and they have their own pool of money. She also described how Murray State stacked-up against other institutions on some metrics. Of all of the performance funding metrics, Murray State exceeded four and fell below seven, Dudley said.

Using the ‘student success’ metric, Dudley explained that if there were $1,000 allocated, Murray State would get 7.4% If Western Kentucky University decreased in that metric, they would get 11.8% because they are much larger. “It’s all driven on market share,” Dudley said. “You can get more if your market share goes up, but it’s got to significantly go up some of the larger schools to leapfrog over them in their overall market share that they already have. And that’s true of every metric on here.”

Regent Dan Kemp said, “It’s very much stacked against smaller schools, isn’t it?” Dudley replied, “It’s very much stacked against smaller schools.”

Explaining how Morehead State University received $0 this year, Dudley said it's because "instead of them losing money this year there was a hold-harmless clause. So they actually have funding - negative funding - sitting in a hold-harmless pool that will be determined -- Does that go away? Or does that go back to the pool for everybody to get through reallocation?” She said that will be reviewed in three years.

Interim President Bob Jackson said, "There’s an imbalance in regard to percent of appropriations being allocated for performance, good or bad." He said he fears when hold-harmless goes away, universities could be writing checks.

Regent Jerry Rhoads said “performance funding” is a misnomer and said “market-share funding” is a more appropriate title. He said the formula “comes down to enrollment and size and it’s weighted against us.” He said Murray State will try to align with Morehead and seek legislative support on the eastern and western ends of the state.

Regent Kemp said the board should talk to legislators about how the formula is “not fair” to Murray State and “needs to be modified in some way.” Kemp suggested the board pass a resolution with regard to the formula. Rhoads agreed an official pronouncement would be in order.

Regents discussed taking up this item at the October meeting.