STATE BOARD OF EDUCATION – TOPIC SUMMARY

Topic: CCWD Budget Note #2: SmallSchool Base Funding Proposal

Date: January 16, 2009

Staff/Office: Camille Preus, CCWD

Action Requested: Information only Policy Adoption Policy Adoption/Consent Calendar

ISSUE BEFORE THE BOARD:SmallSchool Based Funding Proposal.

BACKGROUND:2007 CCWD Final Legislatively Approved Budget contained two budget notes, one that dealt with key performance measures and the second that dealt with the distribution formula.

College Performance Measures:

The nature of the governance structure in our community colleges creates a challenge with respect to relating funding levels to educational outcomes. Community colleges are governed by independent locally elected boards. However, state funds are appropriated to the Department of Community Colleges and Workforce Development, which is not directly responsible for college performance. The Legislature intends that each community college district governing board shall be responsible for meeting the key performance measures for its respective institution, and communicating the results to the Department, and that the Department shall be responsible for assuring that results of successful programs and best practices are shared among the 17 college districts to maximize the results at each institution; and managing the decision-making for distribution of resources among the institutions to maximize statewide performance, recognize local investment, and reward success.

Budget note #1 resulted in a year of study and collaborative work that generated the Oregon Community College Student Success Report and Plan. The work continues around student success and the board will receive routine updates on progress and emerging policy issues.

CCSF Distribution Formula:

The Department shall include a report on the Community College Support Fund distribution formula with its budget request to the 2009 Legislative Assembly. In preparing this report, the Department shall seek input from community college presidents through the Oregon Presidents Council. The report shall evaluate the effect on each local institution’s performance outcomes of:

1. state funds appropriated through the distribution formula;

2. state funds provided through specific grants or special appropriations;

3. local ad valorem levies, including operating and capital;

4. federal funds provided through grants or special programs;

5. tuition and fees; and

6. other factors that the Department finds to be significant.

The Department may also include in the report recommendations for changes in the distribution formula to enhance statewide success in meeting Key Performance Measures across the system.

Budget Note #2 was approached differently – as the language calls for the Department to seek input from the community college presidents on any proposal, with emphasis on the interplay between performance outcomes and funding streams. After a call for input with the college presidents, lead by then-president of President’s Council Dr. Greg Hamann, a list of funding issues was generated and initial research/information was gathered for each area. The areas included:

  • Growth factor
  • A small school adjustment
  • All for one and one for all (translation: good things come to those who are united).

The third area of interest – unity – was reaffirmed that speaking with a single voice was the most powerful message to funders and policy makers. Over the next several months conversation and information gathering continued on the small school base and growth factor. The growth group researched other states models including Montana, Iowa, and Washington. The committee discussion centered on the following issues:

  1. Differential funding (for growth goals) v. maximizing the total amount of the support fund.
  2. Expand the strategic reserve fund to support growth funding depending upon a designated focus (i.e. market share of college age population).
  3. Would creating a focus create special interest lobbying? Would it be more effective to have growth funding distributed within the current formula?
  4. Again, the group expressed concerns that we have no guarantees that we will have any funding increases at all with slowing economic state projections.

The growth group did not reach consensus in their discussion although they remain interested in pursuing the topic and providing policy recommendations in the future.

The small school adjustment group also pursued several different approaches to providing a stable and reliable operational base for each college. Over the last few months the dialogue with the President’s Council on the small school base has resulted in a consensus recommendation to the Commissioner. I concur with the recommendation, which is attached, and with your agreement will bring back to the board changes to the distribution formula OAR for final approval.

Oregon Community Colleges

Oregon President’s Council

Proposed Change for

OAR 589-002-0100: Distribution of Community College Support Fund

Section (8) Paragraph (a): Base Payment

“Small Schools Base”

Background

Through much discussion and feedback from various community colleges, some consensus has emerged that the current Small Schools Base may not be sufficient to adequately compensate for the higher cost of providing access to quality education at Oregon’s smaller colleges. Much anecdotal information and analysis of historical patterns of Direct Instruction expenditures for the 17 community colleges seems to support this conclusion. Therefore, an adjustment in the Small Schools Base component of the Distribution Formula is proposed.

Proposal

  • It is proposed that the “base payment of $600 for each Weighted Reimbursable FTE” be changed from $600 to $720. This represents a 20% increase, reflecting both inflation and changes in the total CCSF.
  • It is also proposed that the base payment amount be adjusted annually, in accordance with the CPI-U for Portland, Oregon.
  • It is proposed that this change would become effective with the FY 09-11 Budget.
  • It is proposed that:

- for FY09-10, 100% of the negative budgetary impact (calculated to be $943,747) be covered by the Strategic Reserve Fund.

-for PY10-11 that 50% of the impact ($471,873) be covered by the Strategic Reserve Fund.

  • No other changes are proposed.

Current and Proposed Base Funding per FTE by Institution