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Legislative analyst slams higher ed performance funding plan

The state’s plan for performance funding of state colleges and universities is “not likely to work very well,” a staff analyst told the Joint Budget Committee on Tuesday.

JBC analysts are known for regular criticism of state agencies and provocative policy suggestions. But analyst Amanda Bickel’s analysis of the Department of Higher Education’s proposed performance funding plan was unusually harsh.

“Staff has significant concerns about the department’s proposal,” she wrote in a memo to the six-member committee. “Staff is dubious that the proposed performance system can provide a fair basis for comparing institutional performance or serve as a reasonable basis for funding.” She presented her memo and discussed the issue with the committee during a morning briefing.

“I’m really concerned about it,” she said. “As presently structured it’s not likely to work very well.”

A 2011 law required the Colorado Commission on Higher Education to develop a master plan for the state’s colleges and universities and to negotiate performance contacts with state colleges and universities. Those contracts are supposed to detail what each institution will do to move towards achievement of those goals, which include increasing the number of postsecondary credentials issued, improving student success in remedial education, reducing attainment gaps among demographic groups and improving the financial health of the higher education system.

A performance funding system is supposed to kick in later this decade, but only after direct state support of higher education reaches $706 million. (Even with the proposed $100 million increase in higher ed funding for 2014-15, total college support still would be about $100 million short of the performance funding threshold.) If the program ever goes into effect, only a small portion of college support would be based on performance.

The CCHE recently completed a plan for how performance funding would work, and it was that document on which Bickel trained her sights.

She criticized the wide variety – and lack of uniformity – in the performance measurements chosen by colleges. She noted that CCHE suggested 23 indicators – of which colleges had to select only two – and that 16 college governing boards are using 71 different measures to rate their performance.

“Essentially, each institution has been allowed to choose its own test,” Bickel wrote. “Under this system, institutions may be rewarded primarily for their skills at selecting metrics. Those who chose poorly will suffer; those that chose well will benefit.”

She concluded, “In staff’s opinion the approach will need to be substantially changed if the General Assembly hopes to use this data to compare institutional performance or provide a basis for funding the institutions.”

Interestingly enough, committee members didn’t seem particularly stirred by Bickel’s analysis. Rep. Cheri Gerou, R-Evergreen, said she didn’t think performance funding is a particularly good idea. Sen. Kent Lambert, R-Colorado Springs, wondered why tuition rates and student debt were used as performance measurements.

“I just think there are a lot of different opinions on this,” blandly observed JBC chair Rep. Crisanta Duran, D-Denver. The committee didn’t pick up on either of Bickel’s two key suggestions, that lawmakers change the performance-funding law or at least send a letter to CCHE outlining concerns about the program. The panel merely agreed to let Bickel send her memo to members of the House and Senate education committees.

In an interview later with Chalkbeat Colorado, Lt. Gov. Joe Garcia acknowledged the challenges to performance funding but said there’s time to work out the kinks.

“We recognize this is going to be complicated. … We have two years to work this out. … We have the opportunity to do a dry run,” said Garcia, who’s also director of the Department of Higher Education. “If we find it to be unworkable we will sit down with the institutions” and make improvements in the system.

Garcia also alluded to what may be the real reason behind the wide variations in institutional performance contracts – Colorado colleges and universities have significant independence while his department and the CCHE are relatively weak.

“There’s a great deal of autonomy” for institutions, he said. “These institutions have significant political influence as well.” Colleges and universities, sensitive to their varying missions and different study bodies, “were all concerned that they all would be held to the same standard.”

As an example, he noted that Metropolitan State University probably will never have the same graduation rate as the University of Colorado Boulder, but that Boulder likely will never enroll as many minority students as Metro does.

During her briefing Bickel also alluded to the realities of higher education politics. “The institutions are quite influential compared to CCHE, and each feels it’s special and should have a special approach.”

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