Chancellor Nussbaum proposed to the Board of Governors at their September meeting a $100 million budget request for 1998-99 which he has entitled “Academic Excellence.” If in voting for this proposal, the Board believed they were supporting excellence in community colleges, they couldn’t have been more mistaken. In fact, upon closer examination, the proposed approach could undermine educational excellence in our system.
The Chancellor’s proposal would tie additional funding for the colleges to specified outcomes. Performance on a selected set of indicators would be rewarded with extra moneys. While the particulars of the price list kept changing, the indicators under discussion at the Board meeting were successful course completions, defined as “C” or better. ($45), associate degrees awarded ($125), certificates earned ($75) and transfers to UC, CSU and independent colleges ($130). The Board approved the plan “in concept,” without deciding the specifics of the formula. This means that the proposal will be presented to the Department of Finance, while the Consultation Council has been directed to work out the “details.”
To tie monetary incentives to the awarding of grades and degrees does not seem in accord with a commitment to “excellence.” Institutional pressure toward grade inflation, reduced rigor and lowered requirements enshrined in budgetary rewards would not enhance education for students. Faculty should not be placed under this kind pressure, nor should administrators have to manage their institutions with such a reward structure. Educational standards would likely have to be maintained in spite of such a budget structure, not because of it. Certainly, a perception that our system “pays” for grades – and for degrees – would portend a potential loss of creditability with our four-year partners. Such pressures on academic integrity could undermine the improved and hard-won respect community college faculty have earned with our colleagues at transfer institutions since the passage of AB 1725.
As might be imagined, such a pricing structure for student “achievement” would end up favoring some districts over others. In the formulas drafted by the Chancellor’s office, suburban districts would be clearly favored over urban and rural districts. Districts with larger percentage of already well-prepared students would have an institutional advantage over those with larger percentages of underprepared students. Similarly, districts with more students from higher socioeconomic backgrounds would likely enjoy funding advantages over districts or colleges with a higher percentage of students who had to work while attending college. (Scroggins)
Any formula focused on student achievement of certificates, degrees and transfer would penalize colleges with a higher proportion of part-time students and students whose goals were not degree related. In fact, the emphasis on degrees and certificates fails to reflect the reality of our mission; the majority of our students are part-time and tend to have shorter-term educational goals for training, employment or the enhancement of job skills.
An outcomes approach to educational funding for community colleges ignores the basic foundation upon which our system is built: open access. Studies by the UCLA Higher Education Research Institute in 1993 found that, “regardless of where they attended college, the least well-prepared students were five times more likely to drop out than the best-prepared students.” Thus, retention rates tend to reflect admission policies rather than retention practices. Graduation rates are even more misleading. Comparisons of expected graduation rates (based upon high school grades and admissions scores) to actual graduation rates would reveal a much ore accurate picture of the performance and success of educational institutions. (Astin) To ignore our institutional mission in constructing performance indicators surely would skew the “outcomes” of the new funding approach.
The cumulative effect of such a reward structure over time would be the reallocation of system resources to those districts with relatively more affluent populations and a corresponding disinvestment of system resources in relatively less affluent districts. Funding of such outcomes would encourage colleges to shift resources away from student support services and away from the already more expensive basic skills and vocational fields, toward degree and transfer courses. Such developments surely would challenge the commitments laid out in the California Master Plan for Higher Education, and would upset the complex balance of system resources currently allocated among the multiple missions of transfer, basic skills, vocational education, and economic development. While some may believe that precisely such a reconsideration is in order, such a fundamental system-wide change needs to be made consciously and deliberatively – with opportunities not only for internal dialogue about expected educational implications, but with public scrutiny and opportunity to discuss and debate the likely public policy impacts such an incentive structure would produce.
Beyond the issue of how “details” could be “work out,” or formulas “tweaked” to mitigate damages to particular colleges, the performance based funding approach mistakenly equates accountability with budget schemes. Since AB 1725 mandated regular accountability reporting, the Chancellor’s Office has done an admirable job of collecting and reporting upon an increasing number of performance indicators. While a broad concept of “accountability” cannot be reduced to simple performance measures, it should be noted that the California Community Colleges report openly and frequently on some 54 measures in the areas of student access, success, and satisfaction as well as fiscal condition and staff composition. The Academic Senate worked closely with the Chancellor’s Office in setting up the accountability measures and advocated for and worked hard to implement regulations regarding student success. Indeed, having plans to address student success on a range of measures is now a minimum standard for the receipt of state apportionment dollars. However, these measures were not designed to support funding decisions.
An examination of one such measure should illustrate the problem. Certificates are the least prescribed and regulated awards within the system. They vary widely from district to district with regard to the required number of units and difficulty. Even within given occupations, these is wide variation among certificates, depending on the needs and requirements of local businesses and skill levels available in given populations. Funding colleges for the sheer number on non-comparable certificates awarded would surely be unsound policy. It would likely build in rewards for the proliferation of certificates without any concomitant assurance to students of the currency of certificates with employers. While this might generate increased levels of paperwork and create an illusion of “improvement,” it is hard to see just how this would be an improvement for students or for the state.
The Chancellor has stated that his main goal in forwarding this proposal was to secure increased funding for the system. He has indicated a belief that this approach would “sell” well in legislative circles. The Governor, according to this reasoning, would not “go for” program based funding anymore. And, since legislators have become enamored of “performance sensitive” funding schemes, it would be politic for us as a system to offer to do it ourselves first, before it’s done to us.
While performance based funding for higher education seemed “fashionable” as a state legislative mandate in the early 1990’s, according to a recent Rockefeller Institutes report, “developments in several states with newly adopted programs suggest that its momentum may have stalled.” (Burke, p.1) Of the 11 states which adopted this approach, Texas and Arkansas have already dropped it, Kentucky is currently re-examining it, and Florida has recently postponed full implementation. The future of performance funding looks unpredictable in Connecticut. The first state to try such an incentive approach for a portion of its higher education budget, Tennessee, has recently debated its merits and scaled back the amount of funds so devoted. (Burke, Burke & Serban) Why should the California Community College system commit “in concept” to such an approach without a careful and thorough examination of the lessons to be learned from the experiences of these states?
Performance based approaches shift the focus of educational funding from “inputs” to “outcomes.” Not surprisingly, a retreat from the commitment to access has been a hallmark of changing funding patterns in states which have adopted performance funding for higher education. Indeed, concern for efficiency over educational quality and access seems to be the main value driving the performance based movement. (Burke; Burke & Serban)
Hastiness of the reform has been a major drawback. Often done in the rush of the political process, the efforts to revamp complex educational systems by budgetary incentives have spelled predictable and costly problems in actual implementation. In the Texas case, a major reason cited for failure was the rush to institute this data driven approach with inadequate data collection capability and lack of clear definition at the inception of what actually constitutes performance and quality. (Bateman and Elliot) Yet this is precisely the process which our system has utilized. At the Chancellor’s urging, the Board of Governors committed the system up front to this politically expedient approach, while demanding that the details “be worked out” in the next six weeks.
The Chancellor brought the proposal for “Academic Excellence” to the Consultation Council over the summer, without time for full discussion of its merits and drawbacks. The Chancellor then proposed this plan to the Board, over the opposition of the Consultation Council. The Board took action despite the unified opposition and testimony of representatives from the Academic Senate for the California Community Colleges, the Community College League of California (representing CEOs and Trustees), the California Federation of Teachers, the California Teachers Association, the Faculty Association of California Community Colleges, and CalSACC.
The Chancellor and the Board may be responding to public perception that the community college system is not doing enough. What does seem clear is that we as a system have not done a good enough job of keeping both the legislature and the public informed of the many and phenomenal accomplishments of our colleges. Nor have the legislature and the public realized just how precious a public asset are the California community colleges. We’ve all made heroic efforts in the face of consideration underfunding and mounting social demands. We need to take that case to the public. All of us could probably agree with the Chancellor on one thing the system needs more money.
As the Texas experiment illustrated, the end is in the beginning. Performance based funding is not an approach which will work for the California community colleges. But the Chancellor has enjoined and important debate academic excellence. We need to devote our time and energies both to further define what academic excellence means and to insist upon that excellence as the ongoing standard. We need to work together to forge sound approaches to securing additional revenue streams to fund such academic excellence for the students we serve.
Astin, A. “College Retention Rates Are Often Misleading,” Chronicle of Higher Education, September 22, 1993, A48 Bateman and Elliot, “An Attempt to Implement Performance Based Funding in Texas Higher Education, A Case Study,” In Epper, R.M. (ed.), Focus on the budget; Rethinking Current Practice, Denver: Education Commision of the States, 1994.
Burke, J.C., Performance Funding Indicators: Concerns, Values, and Models for Two- and Four-Year Colleges and Universities, Albany, NY: Rockefeller Institues of Government, Albany, 1997.
Burke, J.C. and Serban, A.M., State Performance Funding and Budgeting for Public Higher Education: Current Status and Future Prospects, Albany, NY: Rockefeller Institute of Government, Albany, 1997.
Scroggings, B. “Performance Based Budgeting: The Stark Reality,” FACCCTS, Sacrament CA. Faculty Association of the California Community Colleges forthcoming.
Serban, A.M., Performance Funding for Public Higher Education: Views of Critical Stakeholders, Albany, NY: Rockefeller Institute of Government, Albany, 1997.