Gov. Hutchinson promises $10 million if new higher ed funding formula approved

Gov. Asa Hutchinson said he will commit $10 million in additional funding for higher education in fiscal year 2019 – the first across-the-board funding increase for the state’s colleges and universities since 1996 and the first increase of any kind in six years.

However, the $10 million increase is conditioned on legislative passage of a new higher education funding formula that would make Arkansas the nation’s first to fund colleges and universities based entirely on productivity.

The productivity model as created by the Arkansas Department of Higher Education and higher education leaders is meant to help the state achieve goals of increasing college degree and certificate attainment. It bases funding on student success – completion and progress toward completion – rather than simple enrollment.

The formula will be based on efficiency, effectiveness and affordability. Eighty percent will be based on effectiveness – progression and credentials. Science and math majors are given higher weightings, and high-risk students get a 29% heavier weighting for each risk factor, such as coming from a lower-income family. No school would lose or gain more than 2% in a given year.

Hutchinson said 20 years ago, there was a broad increase in higher education funding, but since then the formula has been recalculated every year and then ignored, with the institutions getting the same funding as the previous year. He said the enrollment-based formula “is outdated, it is not really being followed at all in terms of the allocation of funds for our state, and it rewards numbers and enrollment versus attainment, goals and efficiencies.”

Increasing attainment would be “impossible” under that formula, he said Monday (Oct. 31). He said passing the new formula is “one of my highest priorities” in the upcoming session.

The $10 million will not be added until fiscal year 2019, the second year of the biennium, because the institutions need time to make the change and have a year to show their improvements. Funding will be flat for fiscal year 2018, or exactly the same as last year.

According to Dr. Maria Markham, director of the Arkansas Department of Higher Education, the legislation would give ADHE guidance on areas to measure, but the agency would decide on the types of measurements.

“We want to be very conscious in the new funding formula to the changing environment in higher education and workforce needs and how things might change in the state, so by not putting the specifics in legislation, we can make those changes as we see that we need to,” she told reporters.

Hutchinson and Markham were joined at the press conference by six university leaders, including Dr. Don Bobbitt, president of the University of Arkansas System; Dr. Chuck Welch, president of the Arkansas State University System; and leaders from Arkansas Tech, the University of Central Arkansas, Henderson State University and the University of Arkansas at Pine Bluff. Bill Stovall, executive director of Arkansas Community Colleges, which represents the state’s 22 community colleges, also stood with the governor.

Bobbitt said the new formula optimizes state needs over specific institutional needs.

“I want to commend my colleagues because it means that we sort of had to sort of forgo our individual interests and think more broadly about the state interests,” he said.

Asked if the new formula represents a consensus of the institutions, Markham told reporters that while some school leaders have more comfort with the formula, everyone is on board and there are no opponents. She said the promise of new funding will help gain support.

“They thought, without new money, you’re just taking from one group and giving to another group, and that was not something that they were ready to support,” she said. “I think that the announcement today for the infusion of cash into higher education has eased a lot of concerns. So I look forward to having some conversations after this with those who have been holding back a little bit from their full support.”