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March 2, 2015

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Proposed funding formula for Nevada colleges puts focus on degrees earned


Sam Morris

Chancellor Dan Klaich speaks during a town hall style meeting about education Tuesday, Nov. 29, 2011 on the CSN Cheyenne campus.

The framework for a new higher education funding formula is nearly complete after months of feedback from college presidents, faculty and students, Nevada's higher education chancellor said Friday.

"We're kind of in the red zone," Dan Klaich, chancellor of the Nevada System of Higher Education, said in an update to the Board of Regents. "We're about to be able to put this portion of this task to bed."

In January, Klaich unveiled a new funding model, which seeks to create a more equitable way to allocate state funds for higher education by shifting the focus from enrollment figures to performance – how many students each institution graduates.

The current formula – used by the Legislature to fund Nevada’s seven public universities and colleges – has been long criticized for being too complicated, unfair and increasingly different to understand, Klaich said.

Currently, student tuition and fees are collected from each institution and pooled into the state's general fund, a practice that is frowned upon by critics who believe it turns students into taxpayers and argue tuition dollars should remain on campus. The Legislature then allocates funding from the pool based on a school's enrollment, course offerings, cost of maintenance and whether it is urban or rural.

The proposed new formula allows institutions to keep tuition dollars and registration fees they collect. Those funds then would be supplemented with about $370 million in state funding.

The state would use an "instructional matrix" to distribute general fund dollars for higher education, Klaich said.

Under the matrix, each college-level course has been categorized into 11 disciplines: Liberal arts, basic skills, business, education, services, visual/performing arts, technical trades, sciences, law, engineering and health.

Each discipline would be weighted based on how much it costs the state to offer the course. Resource-intensive degrees in science, engineering and medical fields would be funded more than liberal arts programs. Doctoral programs would be funded more than undergraduate degrees.

The recommended weights were modeled after studies of funding formulas used in Texas, Ohio, Illinois and Florida, Klaich said. Courses at all institutions – from urban research universities to rural community colleges – will use the same matrix, he said.

"I'm not making a comment on the value of these courses but the cost of delivery," Klaich said, adding that final cost figures for courses would be announced in March.

Higher education leaders still are working on an adequate way to reward each institution's performance and "success" – defined by the number of students completing degrees. The more degree completions a college has, the more additional funding would be allocated, Klaich said.

The new model's shift in emphasis from enrollment to degrees completed has raised concerns among Nevada's community colleges, which serve large student populations that generally have a higher dropout rate than research universities. The average community college student also takes more time to complete a degree program, and many community college students require remediation courses not funded under the new formula.

Regent Rick Trachok questioned the new emphasis on degree completion, asking Klaich whether students who found personal educational fulfillment from courses would be considered "successes" under the formula. Community colleges serve a unique student population – such as retirees seeking continuing education and vocational students looking to forward their careers – that do not necessarily seek a full-fledged degree or certification, he said.

In a constrained budget period, state and national education leaders are focusing on degree "completers" who are more likely to find jobs, Klaich said.

"We can't take into account personal successes and desires," he said. "We've got an obligation (to taxpayers) to get students in and out and make sure they are successfully graduating."

Klaich suggested that local municipalities give additional support to community colleges, a hard sell for cash-strapped Las Vegas Valley cities and Clark County. No large state has such as system to fund community colleges, UNLV President Neal Smatresk said.

The new funding formula is expected to be complete by the 2013 legislative session and would be instituted in phases over several years, Klaich said. Regents seemed to largely support the direction of the new funding blueprint despite lingering questions from community colleges.

"I understand that community colleges may be negatively affected by this… (but) we have to give taxpayers a good deal," said Regent Robert Blakely, addressing Klaich. "I'm with you on this."

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  1. Due to the inherent inequities, increased complexity, and outright failures of performance-based-funding (PBF), the states where it has been tried have experienced: sharp drops in funding; lack of support by institutions; and weak support from businesses. One analysis said, "Between 1979 and 2007, 26 states enacted performance funding, while 14 abandoned their programs (two states, however, re-established programs). PBF was especially popular during the 1990s economic boom, when flush state coffers provided performance funds for colleges and universities. As state revenues declined during the early half of the 2000s, many PBF systems that were considered "add-ons" were eliminated in state budgets."

    Failures are already being seen in Nevada, including a disagreement over "success" -- which differs necessarily based on institutional goals. Even taking into account the increased Time to Degree found at community colleges -- most of which is financially-based, problems remain about how to serve non-degree students. Most rubrics fail to take into account the importance of these students to a community college's mission and presence -- essentially treating them all as failures. Many students who are making progress at their own rates are treated as failures by PBF systems. The open-door nature of most community-college systems prohibits them from taking the most logical action that is open to universities: raising standards to increase the likelihood of more rapid success.

    Other problems include the failure to find measurable criteria, the fact that PBF only seems to work well when rewarding with extra money during a "good" economy, and conflicts related to attempts to find a "one-size-fits-all" rubric.

    This is why so many states have abandoned PBF. Alas, Nevada appears to be stepping backward.

  2. The reality is that under the Legislature's budget for higher education, the State of Nevada is subsidizing each of its college and university students. However, the subsidy is unevenly distributed now, and will still be unevenly distributed under the new funding formula discussed in The Sun's story, above.

    To me, the State has a basic obligation, under the Equal Protection Clause of the U.S. Constitution (made applicable to the states by the 14th Amendment) as well as under the equal protection phrase in the Nevada Constitution, to give the same dollar amount of subsidy to each student OR to give no subsidies at all. There is no lawful excuse, for example, for the State to give a greater annual subsidy to a PhD candidate in biology than the amount of subsidy to a law student.

    Harkening back to 40 years ago, state Supreme Courts around the country found, and disallowed, funding of public schools in rich neighborhoods at a greater per-student dollar amount than funding of public schools in poor neighborhoods.

    It truly shocks me that Chancellor Dan Klaich, who went to law school, ignores the Equal Protection LAW in devising yet another unequal, punitive funding formula. It certainly looks like the man is clueless that students actually borrow money to pay for tuition and fees at UNLV and that if they have to borrow more money, because the Chancellor's formula lightens the load for others economically, the students can prove "actual monetary damages" due to the denial of equal protection, i.e. the right to be treated equally by the state government.

    This new proposal makes the Equal Protection problem even worse: "Each discipline would be weighted based on how much it costs the state to offer the course. Resource-intensive degrees in science, engineering and medical fields would be funded more than liberal arts programs. Doctoral programs would be funded more than undergraduate degrees." In other words, the more expensive the student's course of study, the less the student would pay towards the cost of delivering those educational services.

    I think it's getting pretty close to the time when a student who is "cheated" by the funding formula files a lawsuit against the Chancellor and the Regents. I've got the plaintiff sitting at my dinner table 2 nights per week, and I'm sure he can drum up a few of his fellow students who are sick of subsidizing UNR and the rural community colleges, let alone their having to subsidize the education of doctoral candidates.

  3. The new funding formula does fix a couple problems. Most importantly, having tuition dollars stay on campus prevents southern college students from supporting those in the north and community college students from subsidizing graduate students. That needed to be fixed, and I commend the new funding formula for doing that.

    However, the new formula has some provisions that will create potentially worse problems. Specifically, the performance funding that pays institutions for producing degrees is misguided. If enacted, that will severely punish community colleges and their open access mission.

    The production-of-degrees model only makes sense if a "company" (institution of higher education) can institute some form of quality control over its raw materials. A stringent admissions process at universities and state colleges performs this function, but the open access mission of community colleges prevents them from this crucial step in the "production" process. They are between a rock and a hard place, unless they institute more "quality control" over the "production inputs"--that means students. That would mean less opportunity for Nevadans and less skilled workers for the state economy.

    Instead of funding for degrees, performance funding for community colleges should be based on requiring them to document the removal of obstacles to earning degrees (for example, reconsidering prerequisites and streamlining the transfer credit process) and their efforts to encourage degree completion (such as processes to catch failing students before they fail). A more flexible mandate would allow each institution to address their particular areas that need to be improved. Moreover, instead of pay-for-degrees, community college performance funding could reward incremental increases in degree completion. There are probably many ways that performance funding could be tweaked so as not to penalize the community colleges, who after all educate more than half the college students in our state.

  4. This proposed funding formula is an absolute can of worms that violates equal protection under the law.

    Certainly, as Cynical Observer pointed out, "To me, the State has a basic obligation, under the Equal Protection Clause of the U.S. Constitution (made applicable to the states by the 14th Amendment) as well as under the equal protection phrase in the Nevada Constitution, to give the same dollar amount of subsidy to each student OR to give no subsidies at all," it becomes clear that this is becoming a "Southern Nevada versus Northern Nevada" feud, AND a outright war of funding pitting the university system versus the community college system.

    Not many citizens realize that there is a huge influx of high school graduates from Northern Nevada who come to Southern Nevada to earn their college degrees. We have to look at what is best for the WHOLE state of Nevada, not just one region or the other, or one kind of higher education institution or the other.

    It gives me some pause to read commenter Frank Daniel's assessment on Performance Based Funding and the fact that it has already been tried in other states and FAILED! What is Chancellor Dan Klaich trying to do with our state and taxpayer funding with such a program???

    Maybe the Regents can come up with something that does work and is PROVEN.

    Blessings and Peace,

  5. I would like to thank everybody for interesting and enlightening comments--whether or not we agree on everything, I have learned from reading these.

    My meager contribution is this: the proposed formula rewards degree completion where I teach, at CSN, while reducing money for remedial classes. Now, whether we should have such classes is not the point; we have them and we need them, to my dismay (and if you want to eliminate them, you're talking about far broader educational reform than just the funding formula or even higher education). The chancellor's plan would stick it to the institutions that serve that purpose. Further, as I point out in the attached article, this formula DISCOURAGES student (and, by connection, faculty) excellence by doing the following. Since CSN would rely on degree completion for funding, it becomes in my interest to discourage a student who has the opportunity to go to a four-year school, whether UNLV or someplace else, even on a scholarship, because my school gets more money for keeping the student there. The plan also would discourage community colleges from one of their longtime missions, which is providing low-cost education to those who live in the community (as in community colleges) and want to learn something but don't want or need a degree.

    Thus the big question: why are the CSN administration and faculty leadership not screaming from the rooftops about this?