Massachusetts bets on performance funding

Massachusetts is betting that funding community colleges based on performance will close the job skills gap, reports Governing. Most states with performance funding link less than 10 percent of higher education to results. Massachusetts will tie half of its community college funds to results. Only Tennessee goes that far.

performance fundingMassachusetts also increased its community college funding by $20 million after years of cutbacks. It dropped a funding formula that gave some campuses  nearly $6,000 per full-time student while others received only $2,500.

In addition to Massachusetts and Tennessee, 11 states have added performance criteria to community college (and sometimes university) budgets. Four other states are moving in that direction.

Demands for accountability are rising, says Richard Kazis, vice president of Jobs for the Future, which promotes workforce development. “There’s a sense that we shouldn’t just fund institutions for getting people to sit in seats briefly; we should fund them for succeeding and moving people forward. How do you make the most out of each dollar?”

Massachusetts will tie funding to each community college’s ability to improve graduation rates, contribute to the state’s workforce needs and help more minority students succeed. Within three years, half of each college’s funding will hinge on these benchmarks. The other half will be determined by course credits completed.

Community college presidents accepted performance funding “as the price of getting a rational funding formula,” says Bill Messner, president of Holyoke Community College.

South Carolina jumped to 100 percent performance funding for colleges and universities in 1996. The system used dozen of metrics.

 “They built a system they couldn’t deliver,” says Kazis of Jobs for the Future. The funding formula was never embraced by university faculty and administrators, who were not included in the process of designing it. Administrators who tried to implement the program were overloaded with unfamiliar demands. After seven years, the program was abandoned.

Massachusetts and Tennessee going slow and collaborating with the higher education community, notes Governing.

To prevent colleges from boost success rates by limiting access, both states award points for outcomes achieved by low-income, adult or minority students.

During the first two years of the new performance funding system, all but one of Tennessee’s 13 community colleges increased the number of associate degrees awarded to low-income students. At the state’s nine universities, all succeeded in increasing the number of bachelor’s degrees awarded to low-income students.

Rewarding enrollment growth and ignoring results sends the wrong message, says Richard Freeland, higher education commissioner in Massachusetts. “It leads to too many students coming in the door and dropping by the wayside.”