Understanding the work processes of Texas higher education is
crucial in understanding how the system works. According to one
university president, the chaotic nature of the work processes,
combined with a weak central system, serves to maintain a prominent
role for local politics in establishing and implementing state
higher education policy.
A formula advisory committee, made up of committee chairs, faculty,
and members of the public, makes recommendations to the commissioner.
The commissioner recommends adjusted formulas to the board. In
recent years the commissioner's recommendations have been based
on his estimate of the amount necessary to bring per-student funding
up to the average of the ten most populous states.
The commissioner's recommendations are rarely contested by the
board, the presidents or the system chancellors. Once approved
by the Coordinating Board, the formulas are sent to the Legislature,
which decides at what level to fund each formula. While funding
for each formula must be across the board, not all formulas are
funded equally. For example, since faculty salaries have been
the highest priority for the Legislature, the formula for faculty
salaries is likely to be funded at a higher rate than say, the
formula for libraries.
The formula appropriations made by the Legislature and approved
by the Governor's office become the base-level appropriation for
each institution. Formula appropriations are supplemented by non-formula
elements of cost and "special items." While formulas are used
to develop lump-sum funding to each institution, they are not
used as an allocation mechanism within the institutions, and each
institution can allocate their own budget. There are expectations,
however, that presidents will not deviate too much from the formula
allocations outlined in the budget.
For 1996-97, the formulas were funded at approximately 87 percent,
with a greater percentage of the salary formula funded as compared
to the other formulas.
Formulas are widely regarded as the great equalizer in Texas.
Most of the individuals we interviewed said that the formula process,
though not perfect, keeps the institutions from getting into political
battles over state resources. Interviewees described the formula
approach as "equitable," "fair" and "keeping us from tearing at
each other's throats." While everyone thinks there are problems
with the formulas, most of those we spoke with said that using
formulas is much better than the alternative. Prior to the formulas,
said one political staff member, Texas had funding based on clout,
and legislators do not want to move back to that inequitable system.
One problem with the formula funding system, according to some
of our respondents, is that it does not allow for the targeting
of priorities. One university administrator said that the formulas
are not based on any qualitative dimensions. Another argued that
formulas do not adjust to state priorities like access for minority
students or work-force preparation.
Some of those we spoke with suggested that the "special-item funding,"
which involves appropriations to individual institutions for specific
programs or activities, is a way for the Legislature to address
priorities in the funding process. Special items can range from
7 to 20 percent of an institution's annual budget. The problem
with addressing priorities in this way is that this funding is,
in effect, soft money that may or may not appear in the next budget
cycle. There are also individuals who see special-item funding
as "pork," a way for legislators to fund their pet projects rather
than to address state priorities.
There has been some discussion in the Legislature about decreasing
the amount of money allocated to special items and increasing
the allocation to formulas. One community college president said
that special-item funding leads to a "break-down" of the equitable
system that formulas try to preserve. The Legislature has asked
the Coordinating Board to study the special-item funding process
to determine whether this is an appropriate way to fund higher
education.
The Permanent University Fund and Higher Education Assistance
Fund
While some institutions come out slightly ahead in the budget
process due to the awarding of special-item funding, the real
difference in funding for the systems comes from the Permanent
University Fund (PUF). Income from this fund is treated as an
endowment. The money is divided, with two-thirds going to the
UT system and one-third going to the A & M system. Some of the
income is used as the guarantee for construction bonds. Income
can be used for renovation, major library acquisitions, and major
instructional and research equipment, subject to approval of the
Board of Regents. After bond obligations are met, the remainder
of funds goes to either UT Austin or to the A & M flagship campus
for "excellence." At one time, as much as $90 million was available
to UT Austin for excellence projects; that number is now down
to about $70 million. One respondent expressed concern that "excellence"
has become fairly broadly defined. Others suggested, however,
that the current president at UT Austin is trying to narrow the
definition and truly focus on projects of excellence.
PUF funding is not available to all institutions in the UT and
A & M systems-only to those that were part of the system in 1985
when the PUF criteria were last changed. Because a constitutional
amendment would be required to increase the number of institutions
eligible for PUF money, this is not likely to happen soon. Instead,
those institutions, along with those not in either the UT or A
& M systems receive construction money under the Higher Education
Assistance Fund (HEAF).
HEAF money is distributed primarily through a formula that includes
student population, complexity of programs, current physical facilities,
and predicted growth at the institution. HEAF funds can only be
used for four things: construction, remodeling, equipment, and
resources for the libraries. The Legislature appropriated $450
million to HEAF for the 1996-1997 biennium. Of that, $350 million
will be available to HEAF institutions and $100 million will be
set aside to establish an endowment fund similar to PUF.
Performance Funding
The 1991 appropriations bill called on the Coordinating Board
to develop and implement a new system of funding distribution
based on performance. The bill did not specify how much funding
should be allocated by performance criteria, but left that up
to the board.
The Coordinating Board first proposed to institutions that five
to ten percent of each institution's appropriations, as calculated
by the regular formulas, be set aside to be earned back based
on a set of performance criteria. Performance would be measured
against a set of ten performance standards, some recommended by
the Coordinating Board as measures of statewide concern, others
selected by the institutions.
There were several objections to this proposal: first, institutional
representatives thought that the amount to be earned back was
too high, that it should be no more than two or three percent;
second, they wanted the money to be added on top of the formulas,
not taken away from institutions. The process of negotiating with
35 institutions to develop standards of performance and establish
data collection procedures was very complex.
A second plan was then developed to address concerns about complexity
and lack of data. Under this model, which was subsequently recommended
to the Legislature, the Legislature would decide how much of the
total higher education appropriations should be applied to performance,
either as an addition or a set-aside. The Coordinating Board recommended
a number of possible performance measures, from which the Legislature
would choose. The Legislature would then divide the money into
pools of funding for each goal and all institutions would compete
with one another. This second approach also brought criticisms
from institutions regarding the performance measures, the distribution
of funding, rewards for performance measures already accomplished,
and inherent advantages or disadvantages that would accrue to
institutions.
Ultimately, neither of these methods was implemented because the
legislative advocates of performance funding lost their influential
positions in the 1993 session, and institutions were able to convince
the new power structure that the existing funding process should
be maintained.
In the 1995 legislative session, however, Texas attempted to implement
a performance funding process for all state agencies. According
to a representative of the legislative budget board, this has
worked very well in most state agencies, except for higher education.
In higher education, he argued, no one knows how to measure quality.
"We are too concerned with trying to be equitable and trying to
treat everyone the same," said this representative, and "this
is not possible when we look at most institutions compared with
UT Austin."
The legislative budget board and others who were asked to put forth proposals for performance funding got "brutalized" by the Legislature, according to one respondent, because each legislator wanted to protect his or her local institution and was not interested in developing performance measures that might make a local institution look less effective. While this process seemed to work well for some state agencies, the local support characteristics of the higher education system prevented this type of performance system from being adopted.
In 1987, the Legislature authorized the board to develop and regularly
update a master plan. At the same time, the Legislature rejected
a proposal by the Select Committee on Higher Education to enact
specific missions for each public university. This was interpreted
by many to mean that the development of a highly specific master
plan was not politically viable. This impression was reinforced
when the board's first draft of a master plan was resisted by
institutional presidents as too specific and prescriptive. Currently,
however, the chair of the Senate Education Committee is proposing
the need for a master plan "similar to California's," which is
viewed by some as providing better control for the development
of higher education. It remains questionable, however, whether
systems would be more supportive of a stronger role for the Coordinating
Board or the development of a more detailed master plan with highly
specific missions for each institution.
While the master plan is seen as relatively ineffective, it does
appear that the Coordinating Board engages in a number of processes
that might be called "discreet planning."
The greatest influence on institutional planning may come through
the establishment of the table of programs, which is a list of
each institution's current academic programs and those they are
authorized to plan. Each institution negotiates its table of programs
with the Coordinating Board every five years in conjunction with
the submission of a mission statement. The mission statements
essentially serve as a rationale for the table of programs. Through
this process, the Coordinating Board does have some control over
statewide program planning.
A second form of "discreet planning" might be the enrollment projections
developed by the board. These projections, according to board
staff, have been used to foster enrollment management planning
by institutions. In addition, the board can set enrollment limits
for institutions. In this regard, the board has called institutions
before it so they could present their enrollment management plans.
Program approval provides the board with another way to enhance
statewide planning. One university administrator calls it one
of the board's "big clubs," along with facilities approval. The
Coordinating Board has the authority to review all new academic
program proposals by public institutions in the state. There have
been some suggestions that the state should control the program
approval process by statute, but these suggestions have never
been adopted. Most of our respondents said that program approval
was an important role for the Coordinating Board.
Three criteria are used for approval of any proposed degree program:
cost, need and potential quality. These criteria include whether
the proposed program fits into the institution's mission and whether
it would result in unnecessary duplication. Master's degrees are
sequentially more difficult to obtain and given somewhat more
rigorous review than bachelors degrees. Doctoral program review
is the most demanding, and the board utilizes out-of-state consultants
to examine these proposals. Some of our respondents said that
the board focused most of its attention on the doctoral programs
in the review process; the board argued that these reviews are
simply more visible because of the use of outside consultants.
Some individuals suggested that there is a disparity in the way
that campuses are treated in the program approval and review process.
A university president, for example, argued that the "big boys"
(UT and A & M), receive preferential treatment. Comprehensive
institutions receive second priority, he said, while the community
colleges are third. An administrator from UT commented that the
only time UT Austin had a problem with the Coordinating Board
in terms of program approval was during the South Texas Initiative,
when they had one or two requests denied. Essentially, the University
just withdrew its requests, and resubmitted them later, after
the controversy had passed.
One of the problems in Texas has been that institutional or system
plans for new programs rarely take statewide needs or capacities
into consideration, setting the stage for conflict when these
programs are considered by the Coordinating Board. For example,
in 1995, three doctoral programs in nursing were proposed by UT
institutions. The system approved all three proposals, sending
them to the Coordinating Board to make the difficult decision
as to which one-or ones-to approve. Moreover, institutions often
do not pay attention to the enrollment plans of other institutions.
As a result, several institutions have focused their recruiting
efforts on the same geographic or program area, each of them overestimating
their enrollment growth. Again, it is the role of the Coordinating
Board to influence institutional planning from a statewide perspective.
The Coordinating Board also reviews existing doctoral programs
through focusing on all doctoral programs in a given subject area
statewide. The review process is described as no more burdensome
than the internal review process established by many universities.
There are two stages to the process. First, institutions conduct
a self study of the program being reviewed. The material is sent
on to the Coordinating Board, which gathers a committee of outside
peer reviewers to look at the program. If the review is satisfactory,
the review process ends at that point. If the committee raises
significant questions, the committee conducts site visits to each
campus to further examine the program.
The review process does result in the termination of some programs. At UT and Texas A & M, the eliminated programs were described as those that the systems wanted to discontinue anyway.
Coordinating Board staff members argued that the transfer function
is receiving less emphasis than it should because of the lack
of emphasis on the associate degree and the absence of a common
core for transfer among community colleges and universities in
the state. There are exceptions, primarily among those institutions
that have historically had a strong transfer orientation, but
the focus of most community colleges now is further blurred by
work-force and career preparation. In addition, the financial
incentives for universities are to recruit freshmen, not to steer
students to the community colleges.
According to one observer, the Coordinating Board has been essentially
neutral on enrollment in community colleges, neither encouraging
nor discouraging it. There is no general statewide effort to foster
transfer, although there are local initiatives under way, particularly
where a university and community college are located in the same
community. The community colleges and universities have voluntarily
developed a common course-numbering system by which similar courses
at all colleges can be identified, thus fostering better transfer
between institutions. The Coordinating Board does issue a guide
to transfer curricula and transfer of credit, which includes approved
transfer curricula for individual majors. In addition, the board
makes final determinations in any disputes concerning transfer
of course credit from one institution to another.
One Coordinating Board staff member said that there is more discussion
of transfer now than there ever has been, but he attributed most
of this talk to concerns over remedial education. According to
this interviewee, universities are beginning to acknowledge community
colleges, but they do so primarily through suggesting that remedial
education should take place at the community colleges rather than
at the universities; once students are "brought up to speed,"
they can enroll in a four-year institution.
Many of our respondents cautioned that community colleges have a mission that is much larger than simply preparing students for transfer. They said that focusing too much on transfer and articulation ignores the other important contributions made by these institutions.
The Coordinating Board collects data statewide, and regularly
collects information on faculty assignments, enrollment by class,
and student records. The board is able to track students across
two- and four-year sectors, providing cohort data for each institution.
The Legislature requests both technical and policy information from the Coordinating Board. Every bill that is filed requires a fiscal note. The Legislative Budget Board requests fiscal notes from the Coordinating Board on all bills related to higher education. Staff members say that they receive anywhere from three to five hundred requests for fiscal notes in a given legislative session. In addition, the Coordinating Board receives over 200 requests from the Legislature annually for information related to higher education.
The TASP test measures skills in reading, writing and mathematics.
All incoming students at public institutions (two- and four-year)
are required to take the exam before completing the first nine
semester-hours at the college or university. TASP requirements
do not apply to students at private institutions unless they transfer
to a public institution on a permanent basis. Students in certificate
programs of less than 42 semester credit-hours are not liable
for TASP requirements. Students who have not taken the TASP test
prior to the end of the term in which they accumulate nine or
more semester hours (or the equivalent) cannot enroll for subsequent
collegiate hours until the test is taken. Students cannot move
on to upper-division courses without passing the exam. The purpose
of the exam is to identify students with difficulties in the three
major skill areas, and then to provide them with activities and
support to address those deficiencies. All institutions are required
to provide remedial assistance to their students.
Subsequent studies conducted by the Coordinating Board suggest that the TASP program has been effective, and that students who have required and completed remedial programs generally perform comparably to those who do not require remediation. There were concerns initially that this program would have a negative impact on minority students, but Coordinating Board reports indicate otherwise.
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