Branch says 25 percent of higher education funding should be outcomes-based

by Reeve Hamilton of The Texas Tribune

Other states have tied all of their higher education appropriations to achievement goals.

DALLAS — On Monday afternoon, at a press conference at Thomas Jefferson High School in Dallas, Gov. Rick Perry called for 10 percent of state funding for higher education to be tied to outcomes such as graduation totals rather than basing the entire amount on enrollment, as is the case now.

House Higher Education Committee Chairman Rep. Dan Branch, R-Dallas, joined Perry at the event. Afterward, he told The Texas Tribune that he thinks the state should go even further than 10 percent. Branch would like to see up to 25 percent of the state's higher education money determined by outcomes.

"Maybe 10 percent was the right amount two years ago," he said, "but I think now we can do more."

Two years ago, in the 2011 session, the Legislature passed House Bill 9, which instructed the Texas Higher Education Coordinating Board to return in the upcoming 2013 session with proposals for funding formulas that included outcomes-based approaches. Many interpreted the bill as a strong signal of support for a shift in policy.

In the 2011 discussion, policymakers struggled to agree which outcomes to measure, how best to encourage them and how much to tinker with funding formulas while budgets were being slashed. But after the passage of HB 9, Texas Higher Education Commissioner Raymund Paredes, a proponent of the change, told the Tribune, “We’ve essentially come to a concurrence that outcomes-based funding is something that we ought to do.”

Still, it's not a sure thing. While the concept appears to have momentum, Senate Higher Education Chairwoman Sen. Judith Zaffirini, D-Laredo, told the Tribune after the 2011 session that it was still a matter of "if, not when" the state adopts such an policy.

Since the proposal to cap outcomes-based funding at 10 percent of a school's state dollars was already controversial, Branch's desire to raise that amount as high as 25 percent could make some nervous.

Other states have done much more, though. Tennessee tied all of its state higher education appropriations to certain achievement goals in 2010. Branch said Tennessee's experience may ultimately demonstrate that such an approach is actually more predictable for colleges and universities than the current model in Texas, which is based on how many students are enrolled on the 12th day of classes.

Branch conceded that it may be difficult to get everyone on board with dedicating 25 percent of a university's appropriations to outcomes right off the bat, and he said he was open to phased-in approach.

Perry, who only called for 10 percent of funding to be altered in this way, stressed the importance of improving the state's graduation numbers. Today, fewer than one-third of students in the state's public universities graduate in four years, and fewer than two-thirds do so in six years.

Following Perry's press conference, University of Texas at Austin spokesman Gary Susswein issued a statement indicating that the state's largest institution was open to such a change. He didn't specify, though, how much of the school's funding officials would be open to seeing changed.

"UT Austin graduates more students — and more students on time — than any other public university in Texas," he said. "So if state funding is tied to graduation rates, the university will do well. The state’s funding formulas currently reward institutions that offer more credit hours each semester. Shifting the incentive towards degrees is something we would welcome."