NKU’s Mearns to legislators: Funding model for state’s universities should be based on performance

By Greg Paeth
NKyTribune Reporter

Northern Kentucky University President Geoffrey S. Mearns made an appeal to state legislators Thursday to eliminate what he considers serious inequities in the process that’s used to distribute funds to state-supported universities.

In his remarks before the budget review subcommittee on postsecondary education and its counterpart for primary and secondary education, Mearns argued in favor of a formula that emphasizes how a university performs in a variety of categories, whether that performance reflects its mission, and its enrollment.

Although no final decisions were made about recommendations that will be presented to Kentucky lawmakers and a new governor next year, Mearns may be paddling against a strong current.

Robert L. King, president of the state’s Council on Postsecondary Education, told the subcommittees that he and the presidents of the other universities may wind up recommending a different formula to determine how taxpayer funds are allocated.

Both subcommittees as well as three others and two joint House-Senate committees met at NKU’s METS Center in Erlanger as part of a “Northern Kentucky United” event organized by the Northern Kentucky Chamber of Commerce in an effort to showcase the region for Kentucky lawmakers.

State Rep. Arnold Simpson, a Covington Democrat, chaired the 90-minute hearing. He is the co-chair of the budget review subcommittee with State Sen. C. B. Embry, a Republican from Morgantown.

Mearns and other university presidents and King have been working since November of 2013 to come up with a more clearly defined formula to determine how higher education funds are allocated throughout the college system. For the fiscal year that ends June 30, NKU will receive about $48.5m, a spokeswoman for the university said.

The NKU president used a hypothetical example to point out that flaws in the current system become glaringly evident if the university decided not to admit a freshman class of students in the fall. “We would get the same amount of money (from the state), which illustrates why this is not a fundamentally sound approach,” he said.

King said he and the university presidents have been weighing a long list of complicated factors in trying to devise a formula. Kentucky spends about $1 billion a year on postsecondary education.

One of the biggest problems is overall funding, King said. Since 2008, the state has trimmed nearly $900m in funding for its university system, he said.

In a nine-year period that ended in 2009, before the budget cuts took root, the state ranked first in the country in the percentage of improvement on the number of students who finished a four-year degree inside of six years. Kentucky also ranked second in the percentage of improvement for students 25-44 who had completed at least a two-year associates degree, King said.

But those numbers declined dramatically after the funding cuts, he said.

“What you saw is that when investments were made in the institutions, they delivered,” King said in response to a question from Rep. Kelly Flood, a Lexington Democrat who is the co-chair of the budget review subcommittee for primary and secondary education.

In response to a question from Simpson, King said it was too early to say what kind of a formula will be presented next year.

The general belief is that the current funding process favors the University of Kentucky and the University of Louisville because of their long histories of strong support throughout the state and among legislators.

Mearns borrowed a quote from HCM Strategists in Washington, D.C., when he emphasized in his presentation that funding models should “…reflect the needs of the state and citizens, not merely the needs of the institution.”

“I think it should be performance-based rather than who has the most political clout,” said Rep. Jim DeCesare, a Bowling Green Republican who serves on the postsecondary education subcommittee.

Mearns comments, during and after the appearance before the lawmakers, reflected to a large degree one of the “outcomes-based funding models” outlined in a report by HCM, which describes itself as an advocacy and consulting firm that specializes in health and education.

Key elements of the model Mearns favors include completion and attainment goals for students, a stable base of funding from year to year, inclusion of all universities in the model, some variances in the metrics that are used to measure performance and in the weighting of the metrics. Degree and credential completion also would be examined closely.

Mearns said the model outlined by HCM that seems to be getting the most support from King and the other college officials takes an approach that is, in some cases, a direct opposite of the formula he supports.

The NKU president supported his argument with some numbers that compared Northern to other universities with the exclusion of the UK and U of L.

Mearns said, for example, that in the 15-year period that ended last year, NKU increased the number of bachelor’s degrees that it has awarded by 84 percent.

Western Kentucky University finished second over that time period with a 44 percent increase. Morehead State was sixth of the six schools that were listed with a 26 percent increase.

Mearns also presented a chart showing that the “net state appropriation” for a degree from NKU was just over $16,000 per student for some 2,900 graduates for the 2013-14 budget year. At the high end of that comparison was Morehead, where that net appropriation was just over $24,000 per student for nearly 1,800 graduates.