Higher Education Funding Study

The Missouri Department of Higher Education and Workforce Development (MDHEWD) has contracted with the National Center for Higher Education Management Systems, also referred to as NCHEMS, for services to fulfill a directive of the Missouri General Assembly. The directive was included in HB 3003 (2022), the appropriation bill that includes funding for the department’s budget; public higher education institutions; student financial aid programs; and other programs, projects, and services. Through the bill, the General Assembly directed MDHEWD to use the appropriated funds:

 

“For commissioning a study which provides recommendations to the Governor and General Assembly on public higher education performance funding models, considering state fiscal climate and institutional mission, to be completed by December 15, 2022; and for commissioning a study that makes recommendations to the Governor and General Assembly regarding higher education efficiency and possible reforms, considering current institutional missions and state fiscal resources, to be completed by July 1, 2023."

 

On Friday, October 21, DHEWD hosted a virtual town hall meeting to discuss the conceptual framework developed by NCHEMS for the study.  All public college and university presidents and chancellors, interested legislators, and members of the Coordinating Board were invited but the meeting was open to anyone interested.  After a welcome and background provided by Interim Commissioner Leroy Wade and state representative John Black, sponsor of the HB 3003 directive, NCHEMS presented information about the framework, deliverables, and timeline for the study and responded to questions from the participants. 

 

Study 1: Study on Performance Funding Models

Copies of the NCHEMS slides and the proposed work plan are linked below.

 

The First Report Draft from NCHEMS.

 

Final Study 1 Report: A Framework to Guide Revisions to Missouri’s Public Higher Education Funding Model and to Incorporate a Performance Component - Study on Higher Education Performance Funding and Efficiency/Reform

 

Study 2: Final Report - Higher Education Performance Funding and Efficiency/Reform

Study 2: Final Report. Study on Higher Education Performance Funding and Efficiency/Reform

 

Background

 

Overview

MDHEWD is the administrative arm of the Coordinating Board for Higher Education ("CBHE"). MDHEWD's core functions include coordination of the public higher education system, including approval of new academic programs and instruction sites; offering programs that make postsecondary education more affordable; improving student success; and administering public workforce programs. Until 2019, MDHEWD's functions did not include functions related to the public workforce system and the department was called the Missouri Department of Higher Education ("MDHE"). Details about Missouri's public colleges and universities are included in the department's Higher Education Factbook.

 

Performance Funding

Missouri has a long, intermittent history with performance funding for higher education. The most recent model originated in 2012. The model was based on recommendations from a task force of representatives from public higher education institutions, legislative staff, then-Governor Jay Nixon’s office, and the MDHE. The model is reflected in language that was added to § 173.1006, RSMo, in 2014. The statute requires public colleges and universities to submit five performance measures to be approved by the CBHE and used for performance funding. It also requires institutions to adopt an additional measure relating to job placement.

 

Funds were first allocated through the performance funding model in Fiscal Year (“FY”) 2014, which ran from July 1, 2012 through June 30, 2014. Colleges and universities received new funding through the performance funding model for FYs 2014-2016. In FY 2017, funds were appropriated through the performance funding model, but they were eventually withheld by then-Governor Eric Greitens.


In 2017, MDHE convened a task force to update the previous performance funding model. The task force included representatives from public higher education institutions, legislative staff, then-Governor Eric Greitens’ office, and the MDHE. Governor Greitens recommended that ten percent of each institutions’ core funding be allocated based on the new model. The General Assembly did not adopt the governor’s recommendations.
MDHE/MDHEWD continued to include performance funding in its budget recommendations through FY 2021, before the March 2020 COVID-19 state of emergency. However, current Governor Mike Parson has not included performance funding in his recommendations nor has the General Assembly included performance funding in their budget decisions. As a result, MDHEWD stopped including performance funding in its budget recommendations in advance of the FY 2022 budget.

 

Efficiency

Section 173.020, RSMo, gives the CBHE authority to develop “arrangements for more effective and economical specialization among institutions in types of education programs offered and students served, and for more effective coordination and mutual support among institutions in the utilization of facilities, faculty and other resources.” Other provisions in Chapter 173, RSMo, and other state laws support that role.
The department’s most recent exercise of this authority came in 2016, when MDHE established a Higher Education System Review Task Force. The task force’s final report is available here.