PERFORMANCE-BASED FUNDING
As we all know, the state budget as well as the overall economy booms and busts with regularity. At the present time, community colleges are paid by the number of students they serve. There is a well-known correlation between the unemployment rate and our student population. When the economy is bad, folks without a job wind up in the community college system, training themselves for new employment opportunities by earning certificates and degrees offered by the hundreds of career technical training programs provided by our system statewide. However, when the economy is bad, this is exactly the time when state tax revenues dry up and colleges get underfunded because the state lacks the money to pay for all the students attending college. This happened during the “Great Recession” at Santa Monica College, when we were serving literally thousands of “unfunded” students which meant that our college received no state funding for many of the students in our classes. Conversely, when the economy is booming, our students get jobs and leave the community college system. While this is a successful outcome for that particular employed person, this means we go begging for students to fill our classes.
In response to this boom and bust funding cycle, over the years, many folks have dreamed about a different kind of funding formula. It is against this backdrop that Governor Brown is proposing moving to a performance-based funding model that would not be strictly based on students served. Instead, colleges could receive funding for outcomes, like degrees awarded and transfers to four-year schools. Colleges could get rewarded for velocity, getting students to complete certificates in three years or less. Colleges could get rewarded for serving first-time college students or those with a demonstrated financial need.
Of course, the devil is in the details of such a proposal. Big time.
At the present time, the Governor and the Department of Finance have suggested one set of performance-based metrics. Different workgroups are suggesting alternatives and there are dueling approaches being discussed at the state-level. For example, college CEOs have developed an alternative plan which would phase-in changes to our funding model over seven years with 25% of a district’s revenue eventually coming from outcome metrics at the end of this seven-year period.
Rather than creating incentives for colleges to lower standards, inflate grades, and reduce access to at-risk and underprepared students, we should propose funding incentives for those practices that will most reliably improve the quality of teaching and advising. The practices that we see that directly lead to better student outcomes include increasing the percentage of classes taught by full-time faculty, decreasing counselor-to-student ratios, and providing better support for part-time faculty (paid office hours; pay equity and health care). Investing in more full-time teaching and counseling positions will help our colleges diversify their faculty as well and improve equity for students.
Nationwide, performance-based funding models have been attempted elsewhere and have resulted in failure in every state where they have been touted as the great new thing. Research summarized in Performance Funding for Higher Education by Kevin J. Dougherty et al shows that “performance funding does not have a significant impact on student outcomes such as retention and graduation.” They find no evidence anywhere to suggest that outcomes-based funding actually works to improve outcomes. They do note, however, that “research finds that performance funding policies can produce sizable unintended, negative impacts” and “have the potential to negatively affect the very students who are already the least likely to be successful.” Outcomes funding, they warn, can lower quality and weaken standards; undermine morale; lesson institutional cooperation; divert resources away from needy students; restrict student access; decrease the faculty voice in academic governance; and shift emphasis away from those parts of the mission not specificallyrewarded in the funding formula.
We really don’t need to provide an incentive for colleges to turn themselves into diploma mills. How threatening to divert money from colleges that are losers under the new formula will help to improve outcomes at those very same colleges is not quite clear to me or anyone else who has studied this issue. In addition, this seems to be yet another stake in the heart of the mission of our system. Lost in these formula proposals is any recognition of our life-long learning mission. No Emeritus College students will be on a transfer pathway or be a recipient of a Pell Grant or BOG fee waiver because their classes are already free of any fees. Many of the metrics being discussed in a new funding formula simply don’t apply to any Emeritus college students. What kind of incentive would that create for our district to continue offering classes like these to our community?
Many different faculty groups as well as FACCC (the Faculty Association of California Community Colleges) are working to defeat these unsound proposals. If only the legislature actually listened to educators instead of lobbyists and consultants.
