Higher education performance-based funding: benefits and burdens for four-year universities in the state of Texas
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How to finance higher education remains controversial among policy makers across the United States and Texas is not exempt from the controversy. In 2011, House Bill 9 (H.B. 9) was enacted in Texas to dedicate a portion of state funding to public colleges and universities that meet specific performance-based standards. Although H.B. 9 has been passed and signed into law, it still has not been determined how funding will be distributed or how effective it will be. The study compared expenditures of the 37 public four-year colleges and universities in Texas to anticipated funding amounts based on performance-based indicators established in H.B. 9. The study was descriptive in nature and involved three phases with the third phase culminating in an article for publication. The first phase examined the major aspects and driving forces to performance based funding as it changes the paradigm of how colleges and universities receive public funding. Phase one produced an article published in British Journal of Education, Society, & Behavioral Science (Ellis & Bowden, 2014). The second phase analyzed data from several states with similar performance-based funding standards to help bring to light to the possible effects H.B. 9 will have on Texas’ public. Phase two produced a second published article in the Journal of Educational Issues (Ellis & Bowden, 2015). Phase three examined benefits and burdens among public four-year institutions based on funding for performance-based indicators established in H.B. 9. Results showed if general academic, operations and teaching, and space (GAOTS) allocations are made through 2030, institutions benefit through performance-based funding ($4.5 billion support). If they have to rely on bonus dollars only, they will be burdened to reallocate funding from their current budgets on each campus to subsidize ($2 billion) the state’s strategic plan to achieve 60x30TX graduation goals. There were several recommendations for future research. First, all institutions stand to gain or lose. However, overall, the regional system institutions stand to gain and lose the most, whereas flagship institutions stand to gain and lose the least. Second, institutions need to be intentional about developing strategies that significantly improve student success, uncovering barriers and enablers to degree and credential attainment, as well as to understanding factors that enable student success. Third, institutions need to rethink student success strategies especially with regard to nontraditional and economically disadvantaged students that make up the majority of the student population at public comprehensive colleges and universities in Texas.