February 4, 2013

New UMaine funding formula rewards Farmington, Augusta campuses for performance

By Susan McMillan smcmillan@centralmaine.com
Staff Writer

AUGUSTA — The universities in Augusta and Farmington will reap major benefits under a new funding plan for the state’s university system if they stay on track producing graduates.

click image to enlarge

Stephanie Pooler, of Waterville, who received a bachelor of science degree in mental health and human services, speaks during the University of Maine at Augusta commencement in May 2011 at the Augusta Civic Center. A new funding plan for the state's universities will reward the Augusta and Farmington campuses if they continue to successfully graduate students.

Staff file photo by Joe Phelan

NEW FUNDING FORMULA

The University of Maine System will change the way it portions the system’s state appropriations to its seven universities, based on performance of students and the schools. The amounts below show the percentage each university is currently receiving and the percentage under the new model, which would at first be applied to 5 percent of the state funding for the Umaine system. 

University % of appropriations now % of new model, 2013-14
UMaine 50.5 41.8
USM 25.4 30.3
UM-Augusta 8.6 11.7
UM-Farmington 6.3 7.3
UM-Presque Isle 3.9 4.2
UM-Fort Kent 2.6 3.1
UM-Machias 2.6 1.4

 

A gradually increasing portion of the money the state gives to the University of Maine System’s seven universities will be based on performance of both students and the universities themselves.

Since the formation of the university system in 1968, the flagship campus in Orono has received about 50 percent of the annual state appropriation, the University of Southern Maine in Portland has received 25 percent and the other five institutions have split the remaining 25 percent.

The portion to be divvied up with the new distribution process will initially be applied to 5 percent of the state appropriation for the 2013-14 year — $7.8 million out of $155 million earmarked for the university system in Gov. Paul LePage’s budget — and increase to 30 percent of that total by 2018-19. That’s if the university system’s trustees do not change the model they have approved.

The universities will split that pot of money based on a formula designed to encourage degree completion, research and development and efficiency.

“Awarding funds in a way that is intentional seems like a better plan than just doing it the way we’ve always done it,” said Rebecca Wyke, the system’s vice chancellor for finance and a member of the team that created the outcome-based model.

Maine is joining a national trend of states awarding higher education funding based on the performance of colleges and universities. 

According to the National Conference of State Legislatures, 10 states use some form of performance-based funding, five other than Maine are making the transition to such a system and 18 have formally explored options.

Some of the states that have used performance-based funding later scrapped it, and knowledge about the effectiveness of such systems is limited, according to the National Conference of State Legislatures. 

In the past few years, however, some states have committed to distributing more of their higher education funding based on performance, going as high as 100 percent in Tennessee.

After working with a consultant from the nonprofit National Center for Higher Education Management Systems, Wyke said, the University of Maine System hopes to avoid some of the pitfalls experienced by other states, such as making the incentives too complicated or not reallocating enough money to encourage changes.

“We know it’s not perfect,” Wyke said. “That’s why it’s important to revisit it on an annual basis.”

Maine’s outcomes-based model starts with four goals: increase the number of adults with degrees or certificates, meet the workforce needs of employers, contribute to economic development through research and improve the productivity of the universities, measured in degrees per $100,000.

The formula is weighted toward advanced degrees and degrees awarded to transfer students or to adults older than 30. There are also extra points for degrees in health care; science, technology, engineering and mathematics, known as STEM; and other statewide and regional needs, which have not been determined.

Money matters

Preliminary figures for the 2013-14 year show that the universities in Orono and Machias will get less money with the new formula, while those in Augusta, Farmington, Fort Kent, Portland and Presque Isle will benefit.

The University of Maine at Augusta should receive about $910,000, or 11.7 percent of the $7.8 million in the pot, and the University of Maine at Farmington would get about $570,000, or 7.3 percent. By comparison, UMA is receiving 8.6 percent of state appropriations this year, and UMF is getting 6.3 percent.

UMA President Allyson Handley said she’s pleased the outcomes-based model rewards her university’s strengths, such as educating older students, but it’s likely to create anxiety in some quarters.

(Continued on page 2)

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