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Missouri universities, colleges $388 million shy of target funding, report states

Monday, February 4, 2013 | 8:42 p.m. CST; updated 9:44 p.m. CST, Monday, February 4, 2013

JEFFERSON CITY — House Hearing Room 2 was packed at the Capitol on Monday morning when state officials and members of the Joint Committee on Education gathered for the release of a new draft model for funding higher education based on performance.

The new model, intended to be similar to the formula used to fund public school districts, estimates it would take an additional $388 million in state appropriations to meet desirable targets.

The draft plan proposes that 10 percent of total state funding for higher education be based solely on a school's performance — primarily the number of student credit hours completed — and includes estimated operational costs for Missouri colleges and universities. The estimates are based on a simulation created by looking at schools in 10 states with per-capita personal income levels closest to Missouri's, according to the new proposal.

The numbers show that nearly all of the state's higher education institutions need much more state support than they are receiving now. The University of Missouri System, the simulation shows, could use an additional $166 million in state appropriations.

“We rolled out the formula by which state aid can be distributed to the schools,” committee vice chair and state Rep. Mike Lair, R-Chillicothe, said. “That’s all this is.”

Comments on the draft plan will be accepted until Feb. 11 and can be submitted by email to the committee's executive director, Stacey Preis, at stacey.preis@senate.mo.gov.

“They’ve got another week for people to say, ‘Wait a minute, we don’t think that was fair,’ or ‘Wow, what a great job you did,’” Lair said. “But guess what? We won’t hear any of that. We will hear, ‘What the hell did you do to my school?’”

The formula breaks down targeted core operational costs for each school into six categories — instruction, research, public service, academic support, student services and institutional support — all of which are combined to create a grand total for each school. All four campuses in the UM System were lumped together.

The simulation created as part of the draft listed the university system target operational costs as: 

  • $1.34 billion for instruction.
  • $59.9 million for research. (Research spending was not based on comparative data from peer institutions.)
  • $50 million for public service.
  • $255.5 million for academic support.
  • $70.6 million for student services.
  • $200.8 million for institutional support.

The total simulated operational costs for the UM System were $1.97 billion per year. Operational costs as defined did not include expenses related to residence halls, bookstores, hospital services and other revenue-generating operations, the committee's report said.

If the target for state appropriations is 28.61 percent of total costs, the state appropriation would need to be $564.3 million, the committee's analysis showed. In fiscal 2013, the state budgeted $398 million for the UM System. That means it fell 30 percent short of the committee model's target.

Statewide, the simulation found that the target for total state appropriations to Missouri's public colleges and universities should be $1.31 billion. By comparison, the fiscal 2013 appropriation was $850.7 million.

The draft funding model unveiled Monday was a revised version of another that was released Dec. 10. Over the past several weeks, the committee has held public hearings across the state and offered two written comment periods to get input.

UM System spokeswoman Jennifer Hollingshead said Monday afternoon that university administrators were reviewing the latest version of the funding strategy.

Preis said that she, along with House Budget Director Mike Price and Senate Appropriations Analyst Trevor Foley, has been invited to meet with the Council on Public Higher Education to discuss the proposal Wednesday.

“They’re free to comment on whatever they want to,” she said.

HB 1731, passed last year, assigned the joint committee the task of coming up with a “comprehensive funding formula” for higher education by Dec. 31. That plan needs to be implemented by July 1, 2014, according to the bill.

Also, Gov. Jay Nixon announced Monday that another $8.4 million will be allocated to higher education for fiscal 2013. A total of about $3.98 million will go to the UM System. The additional money is available because general revenue for the state is ahead of budget projections.

Hollingshead said the UM System will be looking at student financial aid and other "strategic initiatives" as possible places to spend the new money.

Supervising editor is Scott Swafford.


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