STATE BOARD OF EDUCATION – TOPIC SUMMARY
Topic: CCWD: Distribution Policy Leverage
Date: March 11, 2011
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 Distribution Policy Levers which includes
adopting a harm limit for FY 2011-12 and determining the level of the Strategic Fund for the 2011-13. This month the docket is prepared for discussion on our draft recommendation and for soliciting your feedback prior to the formal, final recommendation.
Distribution Policy Levers
BACKGROUND: Three elements of the Community College Distribution Formula for the Community College Support Fund (CCSF) have required 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 2011-13, CCWD has prepared recommendations and resolutions for two levels of CCSF appropriations. The analysis provided focuses on the Governor’s Balanced Budget with funding at $410 million. Recommendations are also included for funding levels at $440 million, just in case.
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 significant additional resources, since additional resources are not expected.
Summary of Recommendations
Resolution – CCSF @ / $410 million / $440 millionHarm Limit (for 2011-12 only) / 5.00% / 5.00%
Level of Significance: Split of Additional CCSF / None Anticipated / None Anticipated
Strategic Fund: Percent of CCSF Appropriation / 0.75% / 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
2009-10 Fiscal Year: 5.00% - Funds used for Harm Limit: $0 to date
2010-11 Fiscal Year: 5.00% - Funds used for Harm Limit: $0 to date
Recommendation for the 2011-12 Harm Limit at 5 %.
The harm limit recommendation is based on the goal of accomplishing full equalization by 2012. 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.
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.
1. Purpose of the proposal.
2. How will the funds be used? To sustain or increase enrollment (not supplanting existing funds)?
3. Is the funding one time (for this biennium) or will additional funding be needed in the future?
4. If future funding is needed, how will those resources be obtained? Is the activity sustainable?
5. What is the proposal’s impact on the Community College three years from now? Five years from now?
6. How will progress be measured?
Current Strategic Funds: For the 2009-11 Biennium, the Board established a Strategic Fund of 1.33% of the total legislatively approved Community College Support Fund allocation. The increase, from 1% to 1.33%, was necessary to cover the implementation costs of a change to the small school base recommended by OPC and approved by the SBE in April of 2009.
Recommend Strategic Fund of no more than one percent of the CCSF appropriation. The table below shows 0.75% if the appropriation level is $410 million. If the CCSF appropriation level is $440 million or higher, the amount of Strategic Funding is recommended at 1%.
Resolution / CCSF = $410 million / CCSF = $440 million or abovePercent of CCSF Appropriation / 0.75% / 1%
Strategic Fund / $3,075,000 / $4,400,000
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