Governor Little to further study “outcomes based” funding over the next year

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For the past 29 years, Enrollment Workload Adjustment (EWA) has been the funding model used to allocate state funds to Idaho’s public universities, community colleges and technical institutions. The model funds institutions based on the number of enrolled students they have. However, Idaho State Board of Education President Linda Clark explained that during Idaho’s economic downturn of 2008 the funding for EWA was frozen.

While enrollment numbers increased in institutions like Boise State and College of Western Idaho, the funding was not adjusted to match the increase. The years of 2010, 2011 and 2012 stand out due to consistent EWA underfunding in light of enrollment increase, according to Mark Heil, Boise State’s vice president and chief financial officer. In looking to create a new model to replace the perceivably outdated EWA, an “outcomes based funding” was created by the Idaho State Board of Education and presented to the state legislature last fall.

What is “outcomes based” funding?

Outcomes Based Funding (OBF) is a funding model proposed in October after three years of planning. According to Mike Keckler, chief communications and legislative affairs officer of the Idaho State Board of Education, there has been a technical committee made up of representatives from the Board, businesses, the higher education institutions and additional experts working on the formula.

Keckler explained that at the base level, OBF rewards institutions for an increase in amount of graduates with an increase in funding based upon a set pool of funds that is divided among Idaho’s institutions. This is opposed to the current model, which focuses strictly on entry numbers.

Additionally, OBF rewards institutions who produce graduates in six areas: STEM, health, business and education fields, graduating in four years and graduating need-based students, according to Clark.

However, it all remains dependent upon if the legislature chooses to fund OBF year-to-year. Heil explained that OBF could easily fall victim to the same issues faced by EWA: under-funding from the State resulting in low money distribution.

What does it look like?

According to the OBF model, there are three years of implementation mapped out. However, over three years, funding provided by the legislature decreases and funding by the institutions themselves increases.

“Both models have similar benefit, but both are subject to inherent weakness in whether or not EWA is funded and how much gets placed in the OBF pool,” Heil said. “OBF could fall victim to the exact same scenario where we have an increase in enrollment that through the formula would drive increased funding for the university, and the legislature could decide not to fund it.”

Heil explained that funding depends on the legislature’s input which may result in a potential decrease of funds over time.

“This model, if done right, would adequately fund institutions, just like EWA. EWA I am not a fan of because in tough times, the legislature doesn’t fund it,” Heil said. “But with OBF, as the pool of money decreases, the model doesn’t work either. You have to be willing to put enough money into the pool cover the increase either enrollment or graduates.”

The proposal from the Idaho State Board of Education shows a steady decrease in new legislature funds that would decrease funding from EWA and one budget line item. During the first year, Boise State and other four-year institutions would have a pool of $11 million, $7.5 million the second year and $4 million the third.

“If you look at the models, the first year we are slightly better on OBF than the EWA. In year two we are probably slightly better off with EWA then we would be with OBF. In the third year, the model is even lower where we are probably better with EWA,” Heil said. “The impact to Boise State is very similar, it just depends on how much money the legislature decides to put into the OBF model.”

It is unknown what would happen with the funds following year three, according to Heil.

Clark and Heil agree that overall, the main difference between the two models is the philosophical and value approach.

Clark proposes that across the country, focusing on incoming numbers in not an incentive to finish with a meaningful degree.

“It’s (OBF) more of a different theory. Do you want to reward the progression toward a degree or do you want to reward the degree or certificate? There is a trend going around the country and it kind of fits with some of the social beliefs in Idaho that we want to reward the actual outcome and objective, not just working toward it,” Heil said. “It’s a noble theory. I agree with it. But in the long run it would not significantly change what Boise State gets with EWA now.”

Looking forward

On Jan. 7, Governor Brad Little released his budget recommendations to the state legislature. Little chose to not provide any funding towards OBF, instead continuing funding EWA and increased the Idaho Opportunity Scholarship in response.

“We had the old program, EWA, and I looked at the old program and said, ‘look if we just provide scholarship for these kids they can decide where they are going,’” Little told The Arbiter in a press conference. “We had 1,700-1,800 kids last year that applied for Opportunity Scholarships. If we just make scholarships available, let them decide what institution they go to.”

Little explained that although he is not providing immediate funding right now, he plans to study OBF to further understand the costs and benefits of the policy switch.

“The Governor recognizes that the transition from the current enrollment workload adjustment funding model to the State Board of Education’s proposed outcomes based funding model is a major policy switch,” according to the Fiscal Year 2020 Executive Budget Summary. “As such, he wishes to further study the advantages and disadvantages to both models over the next year before making a decision.”

Heil explained that the end question for either is if the legislature and the governor value higher education. For now, the governor’s deferring of OBF moves the timeline further down.

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