STATE BOARD OF EDUCATION – TOPIC SUMMARY
Topic: CCWD: Small School Base Funding Proposal and Distribution Policy Leverage
Date: April 17, 2009
Staff/Office: Camille Preus, CCWD
Action Requested: Information only Policy Adoption Policy Adoption/Consent Calendar
ISSUE BEFORE THE BOARD: The Board will be reviewing the Small School Based Funding Proposal submitted by the Oregon Presidents Council and the Distribution Policy Levers which include
adopting a harm limit for FY 2009-10 and determining the level of the Strategic Fund for the 2009-11.
Small School Based Funding Proposal
BACKGROUND: The 2007 CCWD Final Legislatively Approved Budget contained a budget note that dealt with the distribution formula. It required the Department to report on the Community College Support Fund distribution formula with its budget request to the 2009 Legislative Assembly. The report evaluates the effect on each local institution’s performance outcomes of:
1. State funds appropriated through the distribution formula;
2. State funds provided through specific grants or special appropriations;
3. Local ad valorem levies, including operating and capital;
4. Federal funds provided through grants or special programs;
5. Tuition and fees; and
6. Other factors that the Department finds to be significant.
Dr. Greg Hamann led the work with the college Presidents, which resulted in a list of funding issues and initial research/information for each area. The recommendation from the Presidents is a proposal for a small school adjustment. Several approaches were pursued to provide a stable and reliable operational base for each college. Over the last few months the dialogue with the President’s Council on the small school base has resulted in a consensus recommendation to the Commissioner. After discussion with the Board, a final recommendation will come to the board and changes to the distribution formula OAR will be provided for final approval.
The small school base proposal summary and recommendation follows on the next page.
Page 1 of 14
Oregon Community Colleges
Oregon President’s Council
Proposed Change for
OAR 589-002-0100: Distribution of Community College Support Fund
Section (8) Paragraph (a): Base Payment
“Small Schools Base”
Background
After much discussion and feedback from various community colleges, there is consensus that the current Small Schools Base does not adequately compensate for the higher cost of providing access to a quality education at Oregon’s smaller colleges. Anecdotal information and analysis of historical patterns of direct instruction expenditures for the 17 community colleges supports this conclusion. An adjustment in the Small Schools Base component of the Distribution Formula is proposed.
Proposal
· It is proposed that the “base payment of $600 for each Weighted Reimbursable FTE” be changed from $600 to $720. This represents a 20% increase, reflecting both inflation and changes in the total CCSF.
· It is proposed that this change become effective with the FY 09-11 Budget.
· It is proposed that:
- For FY09-10, 100% of the negative budgetary impact (calculated to be $943,747) be covered by the Strategic Reserve Fund.
- For PY10-11 that 50% of the impact ($471,873) be covered by the Strategic Reserve Fund.
· It is also proposed that the Base Payment amount be adjusted annually, in accordance with the CPI-U for Portland, Oregon. The inflation would not be applied until the 20011-13 biennium.
The change in the small school based funding for FY 2009-10 would be an increase of $2.35 million and for FY 2010-11 there would be an increase of $2.34 million.
Current and Proposed Base Funding per FTE by Institution
Distribution Policy Levers
BACKGROUND: Three elements of the Community College Distribution Formula for the Community College Support Fund (CCSF) require annual and/or biennial review and approval by the Board: the harm limit (annual), the split of significant additional resources (biennial), if any are available, and the Strategic Fund (biennial).
Since there is significant uncertainty about what the final CCSF appropriation will be for 2009-11, CCWD has prepared recommendations and resolutions for three levels of CCSF appropriations. The analysis provided focuses on the Governor’s worst case scenario with funding at $412 million. Recommendations are also included for funding levels at $440 million and the level in the Governor’s Recommended Budget which is $485 million.
The Distribution Formula elements are highly interdependent, so changes to one element can affect other formula components. The recommendations included in this report were developed by reviewing each of the three components individually and as a group at each potential funding level.
A summary of the recommendations is included here, with additional detail included in the remainder of the report. There is not a recommendation for the split of additional resources, since additional resources are not expected.
Summary of Recommendations
Resolution – CCSF @ / $412 million / $440 million / $485 millionHarm Limit / 5.00% / 5.00% / 5.25%
Level of Significance: Split of Additional CCSF / None Anticipated / None Anticipated / None Anticipated
Strategic Fund: Percent of CCSF Appropriation / 0.75% / 1% / 1%
THE HARM LIMIT (ANNUAL)
What it is: When implemented, the harm limit prevents colleges from losing more than a certain percentage of non-base total public resources, compared to the prior year, due to the move to equalization. The harm limit allows losses in non-base total public resources due to equalization up to that set percent. It does not protect colleges from losses due to any other changes, such as declines in FTE or public resources.
Past harm limits: 2005-06 Fiscal Year: 3.00% - Funds used for Harm Limit: $121,619
2006-07 Fiscal Year: 3.35% - Funds used for Harm Limit: $18,061
2007-08 Fiscal Year: 4.35% - Funds used for Harm Limit: $5,033
2008-09 Fiscal Year: 4.75% - Funds used for Harm Limit: $0 to date
Harm Limit Recommendations for 2009-10 with a funding level of $412 million: 5.00%
The harm limit recommendations for all levels of funding are based on the goal of continuing the movement towards full equity by 2011. The harm limit recommendation is set high enough so that no community college would be compensated for a loss of resources due to the movement toward equity. If there were a decision to use the harm limit to affect the move towards equalization, the harm limit would need to be below 4.00%. If the harm limit were between 3.90% and 3.50%, one college would benefit. If the harm limit were 3.00%, four colleges would benefit. The distribution of Total Public Resources (TPR) without the base and with a harm limit of 5.00% is shown in Table 1 and Table 2 show the distribution of TPR with the base.
Page 1 of 14
TABLE 1
CHANGE IN FUNDING BY COLLEGE BY COMPONENTAppropriation Level $412 million
Fiscal Year 2009-10
(NO BASE, INCLUDES PROPERTY TAXES) / Harm Limit / 5% / Equals the Change in Total Resources
College / FY 2008-09
TPR
without Base / FY 2009-10
TPR
without Base / Change in Funding
2008-09 TO 2009-10 / % Change 2008-09 TO 2009-10 / % due to FTE / % Change in TPR Due to Change in Total Public Resources Allocated According to Equity / % Change in TPR Due to Change in Total Public Resources Allocated According to Historic Share / % Change Due to Move Towards Equalization / % Harm Limit
Blue Mountain / 8,387,447 / 7,420,717 / (966,730) / -11.5% / 1.2% / -0.3% / -11.4% / -1.0% / 0.0%
Central Oregon / 17,181,927 / 14,625,606 / (2,556,321) / -14.9% / 1.6% / -1.1% / -11.4% / -4.0% / 0.0%
Chemeketa / 42,576,726 / 38,124,342 / (4,452,384) / -10.5% / 1.1% / 0.0% / -11.4% / -0.1% / 0.0%
Clackamas / 31,527,875 / 27,007,593 / (4,520,283) / -14.3% / -1.5% / -0.3% / -11.4% / -1.2% / 0.0%
Clatsop / 5,978,798 / 4,963,487 / (1,015,312) / -17.0% / -1.8% / -0.8% / -11.4% / -3.0% / 0.0%
Columbia Gorge / 4,265,815 / 3,575,873 / (689,942) / -16.2% / -0.9% / -0.8% / -11.4% / -3.0% / 0.0%
Klamath / 5,217,791 / 4,611,971 / (605,820) / -11.6% / -1.5% / 0.3% / -11.4% / 1.0% / 0.0%
Lane / 44,668,412 / 40,031,208 / (4,637,203) / -10.4% / -0.1% / 0.2% / -11.4% / 0.8% / 0.0%
Linn Benton / 25,550,531 / 22,800,611 / (2,749,921) / -10.8% / -0.4% / 0.2% / -11.4% / 0.8% / 0.0%
Mt. Hood / 33,356,675 / 29,998,862 / (3,357,814) / -10.1% / -0.3% / 0.3% / -11.4% / 1.2% / 0.0%
Oregon Coast / 1,684,987 / 1,529,559 / (155,428) / -9.2% / 0.9% / 0.3% / -11.4% / 1.0% / 0.0%
Portland / 90,216,579 / 80,995,289 / (9,221,290) / -10.2% / 0.1% / 0.2% / -11.4% / 0.8% / 0.0%
Rogue / 18,096,044 / 15,698,775 / (2,397,270) / -13.2% / 0.3% / -0.5% / -11.4% / -1.7% / 0.0%
Southwestern Oregon / 12,575,692 / 10,989,122 / (1,586,570) / -12.6% / -0.1% / -0.2% / -11.4% / -0.9% / 0.0%
Tillamook Bay / 1,263,335 / 1,228,656 / (34,678) / -2.7% / 4.1% / 1.0% / -11.4% / 3.6% / 0.0%
Treasure Valley / 7,232,539 / 6,318,390 / (914,149) / -12.6% / -0.9% / -0.1% / -11.4% / -0.2% / 0.0%
Umpqua / 13,547,523 / 12,045,163 / (1,502,360) / -11.1% / -0.3% / 0.1% / -11.4% / 0.5% / 0.0%
Total / 363,328,696 / 321,965,224 / (41,363,472) / -11.4% / 0.1% / -11.4%
TABLE 2
CHANGE IN FUNDING BY COLLEGE BY COMPONENTAppropriation Level $412 million
Fiscal Year 2009-10 (WITH BASE) / Harm Limit / 5% / Reflects Appropriation Level
College / 2008-09
TPR
with Base / 2009-10
TPR
with Base / Change in Funding from 08-09 / % Change from 08-09 / % due to FTE / % Change in TPR Due to Change in Total Public Resources Allocated According to Equity / % Change in TPR Due to Change in Total Public Resources Allocated According to Historic Share / % Change Due to Move Towards Equalization / % Harm Limit
Blue Mountain / 9,136,349 / 8,169,619 / (966,730) / -10.6% / 1.1% / -0.3% / -10.5% / -0.9% / 0.0%
Central Oregon / 17,847,273 / 15,289,170 / (2,558,103) / -14.3% / 1.5% / -1.1% / -11.0% / -3.8% / 0.0%
Chemeketa / 43,236,726 / 38,784,342 / (4,452,384) / -10.3% / 1.1% / 0.0% / -11.2% / -0.1% / 0.0%
Clackamas / 32,187,875 / 27,667,593 / (4,520,283) / -14.0% / -1.4% / -0.3% / -11.2% / -1.1% / 0.0%
Clatsop / 6,774,890 / 5,759,579 / (1,015,312) / -15.0% / -1.5% / -0.7% / -10.0% / -2.7% / 0.0%
Columbia Gorge / 5,053,652 / 4,363,506 / (690,147) / -13.7% / -0.8% / -0.7% / -9.6% / -2.6% / 0.0%
Klamath / 6,013,883 / 5,408,063 / (605,820) / -10.1% / -1.3% / 0.2% / -9.9% / 0.9% / 0.0%
Lane / 45,328,412 / 40,691,208 / (4,637,203) / -10.2% / -0.1% / 0.2% / -11.2% / 0.8% / 0.0%
Linn Benton / 26,210,531 / 23,460,611 / (2,749,921) / -10.5% / -0.4% / 0.2% / -11.1% / 0.8% / 0.0%
Mt. Hood / 34,016,675 / 30,658,862 / (3,357,814) / -9.9% / -0.3% / 0.3% / -11.2% / 1.2% / 0.0%
Oregon Coast / 2,299,907 / 2,147,957 / (151,949) / -6.6% / 0.7% / 0.2% / -8.3% / 0.7% / 0.0%
Portland / 90,876,579 / 81,655,289 / (9,221,290) / -10.1% / 0.1% / 0.2% / -11.3% / 0.8% / 0.0%
Rogue / 18,759,608 / 16,360,557 / (2,399,052) / -12.8% / 0.3% / -0.4% / -11.0% / -1.6% / 0.0%
Southwestern Oregon / 13,242,820 / 11,656,250 / (1,586,570) / -12.0% / -0.1% / -0.2% / -10.8% / -0.8% / 0.0%
Tillamook Bay / 1,843,787 / 1,816,263 / (27,523) / -1.5% / 2.8% / 0.7% / -7.8% / 2.5% / 0.0%
Treasure Valley / 8,028,631 / 7,114,482 / (914,149) / -11.4% / -0.8% / -0.1% / -10.3% / -0.2% / 0.0%
Umpqua / 14,214,651 / 12,710,509 / (1,504,142) / -10.6% / -0.3% / 0.1% / -10.9% / 0.5% / 0.0%
Total / 375,072,249 / 333,713,860 / (41,358,389) / -11.0% / -11.0%
Page 1 of 14
THE STRATEGIC FUND: PERCENT OF CCSF APPROPRIATION (BIENNIAL)
What it is: The Board established a Strategic Fund that serves two purposes: 1) proposals to incentivize statewide initiatives and activities, and 2) requests from individual institutions for assistance in meeting new expectations stemming from legislative change.
How it works: On matters incentivizing statewide initiatives or activities, the Commissioner has discretion to review, rank and approve proposals. As each proposal is approved, the Commissioner provides the Board with a report detailing the purpose of the activity, the amount of Strategic Fund monies approved, and the proposal’s merit as assessed under the following parameters:
1. Purpose of the proposal
2. How does the activity support the initiatives and work plans of the Department and the State Board?
3. Does the activity relate to the Department’s Key Performance Measures or other program-specific measures?
4. Is the funding one time (for this biennium) or will additional funding be needed in the future?
5. If future funding is needed, how will those resources be obtained? Is the activity sustainable?
6. What is the activity’s impact on the State three years from now? Five years from now?
7. What change is anticipated?
8. How will progress be measured?
On requests for one-time assistance from individual institutions to meet new expectations stemming from legislative change, CCWD brings the requests to the Board for discussion and consideration. CCWD assesses requests based on the parameters outlined below and provides a recommendation and reasoning to the Board on whether the request merits funding.