Missouri Senate

Senate Committee Substitute

The higher education funding model provides that institutions will be funded based on both costs and outcomes. The model calculates institutions' core operational expenditures, which are divided into six categories: academic support, institutional support, instruction, public service, research, and student services. The calculations for these components are described in the act.

The model uses a grouping of ten peer states when calculating institutions' funding - the five states next higher than Missouri and the five states next lower than Missouri based on a rank-ordering of all states according to the Bureau of Economic Analysis using the 2011 midyear population estimates of the census data, as described in the act. Missouri institutions are classified in different sectors using, in part, the Carnegie Classification system: associate's sector; statewide technical education institution sector; baccalaureate sector; master's sector; and research sector.

For institutions in all sectors, the state share of the operating budget estimate will be the sum of the institution's totals for academic support and institutional support and instruction and public service and research and student services multiplied by the sector-specific modifier.

All courses that are completed at an institution will be weighted based on their discipline and level and divided into clusters. Weights are assigned in the act. The Coordinating Board for Higher Education must review the disciplines, clusters, and weights every five years and make recommendations to the General Assembly on their revision.

All calculations will use a three year rolling average of final data from the Integrated Postsecondary Education Data System (IPEDS), except for fiscal year 2015. Fiscal year 2015 will use an average of the final data for fiscal years 2010 and 2011. (Sections 173.1500, 173.1505, 173.1510, 173.1515, 173.1530)

COMMUNITY COLLEGES: Currently, community colleges receive one appropriation for the entire sector that is divided amongst them by a community college resource allocation model. This act removes this resource allocation model and requires that each community college's state funding be calculated separately by the new funding model. (Section 163.191)

PERFORMANCE FUNDING: Ten percent of each public institution of higher education's state appropriation must be designated and set aside as performance funding. This amount of money will be placed into the Higher Education Performance Fund.

The Coordinating Board for Higher Education must adopt institutional performance measures specific to the funding model in collaboration with the institutions by January 1, 2014. These performance measures must be updated every five years beginning in 2019.

An institution will receive performance funding if it satisfies the performance measures. If an institution satisfies all of its institutional performance measures, it will receive all of its performance funding. If it meets at least one, but not all, of its institutional performance measures, it will receive a prorated amount of its performance funding. The Coordinating Board will then authorize the release of the appropriate amount of performance funds to the institution. (Section 173.1520)

STOP-LOSS PROVISION: If an institution's funding as calculated by the model is less than what the institution receives under the current method of state funding, the institution will receive ninety-eight percent of the previous year's funding until such time as the institution is on the model. (Section 173.1525)

JOINT COMMITTEE ON EDUCATION REVIEW OF THE MODEL: The Joint Committee on Education must review the functionality of the higher education funding model every five years beginning in academic year 2018-2019. The Joint Committee must consult with the Coordinating Board for Higher Education, the Department of Higher Education, at least two academic researchers, the Midwest Higher Education Compact, and the Education Commission of the States. The Joint Committee must submit a written report. (Section 173.1535)

MICHAEL RUFF