State funding to universities could be more ‘fair’ with new formula

By MARY SELL, Alabama Daily News

The record $7.1 billion education budget approved in the Alabama Senate on April 30, 2019, contains at least 5 percent increases for the state’s public four-year universities, but a formula to get more money to under-funded institutions met with some concern.

“I represent an institution that feels like they were not made whole in the budget,” Sen. Tom Whatley, R-Auburn, said in a budget committee meeting last week.

His complaint was about the Alabama Commission of Higher Education’s attempt to address what it says are “the most egregious inequities in funding” at some universities.

Athens State University, the University of North Alabama, Jacksonville State University, Troy University, the University of Alabama Tuscaloosa campus, the University of Montevallo, the University of South Alabama and the University of West Alabama all saw small increases based on comparisons of funding at other schools across the nation with similar missions, student bodies and degree production. The “peer gap adjustment” formula in Gov. Kay Ivey’s recommended budget represented about half a percent of higher education funding.

Alabama A&M, Alabama State University, Auburn University, Auburn University Montgomery, the University of Alabama at Birmingham and the University of Alabama at Huntsville did not get peer gap increases. Universities were given additional money in the Senate-passed budget that now goes to the Alabama House.

Sen. Vivian Figures, D-Mobile, was one of two “no” votes on the budget. The peer-group process was part of the Jacksonville State University trustee’s objections to the budget.

“I’m still waiting for who those peer groups are, how were they judged against each other, how did they come up with who was going to get what,” Figures said after the Senate vote. “I’m still waiting for that report.”

To address concerns about the new formula, a $10 million “equalization fund” was added to the budget, along with a process for universities to dispute the peer-group study recommendations. The budget was amended on the Senate floor to clarify it would be the Legislature, not ACHE, that distributes that money.

“If someone ruins Thanksgiving dinner, why would you invite them to come cook for Christmas?” Whatley said in a committee meeting. He voted for the budget after the amendment was added.

Any leftover funds from the $10 million will be split among all schools.

“Auburn provides a healthy return on every dollar invested in us by the state as we educate more Alabama students than any university in the nation,” Auburn officials said in a written statement. “We’re thankful that leaders in Montgomery have been receptive to our concerns over ACHE’s methodology to determine funding recommendations, and we’re optimistic as the budget process moves from the Senate to the House.”

Some lawmakers have for years said that the state’s per-student funding for universities is not equitable. Recent per-student state funding information wasn’t immediately available late last week. The TimesDaily has previously reported that in the fiscal year 2015, the University of North Alabama’s per-student funding was $4,618. Only the University of West Alabama had a lower amount. Athens State’s per-student funding was $5,978. The median for all universities was $6,381.

“Quite frankly, in years past, it’s been a test of political muscle a lot of times on who got what out of the budget,” Sen. Arthur Orr, R-Decatur, said after the Senate approved the budget on Thursday. He’s chairman of the Senate education budget committee.

Part of the problem, ACHE executive director Jim Purcell said, is that during the recession, higher education funding was cut. Then, increases of 1 to 3 percent across the board didn’t take into consideration changes in enrollment and costs of different academic programs.

Orr and others say the goal is to get to an outcome-based funding model, where at least part of universities’ state dollars are tied to factors like graduation rates. Orr said more than 30 states already fund higher education that way and it would make institutions more accountable and efficient.

But first, Purcell said, funding gaps need to be filled.

“It’s hard to have performance-based funding when some universities are underfunded,” Purcell said.

Senate President Pro Tem Del Marsh, R-Anniston, said the Legislature has never had a formula for higher education funding.

“I like that we’re sticking to a process, I think it’s going to be better for higher education in the long run and make them more accountable,” Marsh said.

Some Senators are pleased with the peer-group boost.

“This is a step in the direction of trying to develop a formula for higher education funding and not just have whoever can lobby for the most money,” Sen. Larry Stutts, R-Tuscumbia, said. His district includes the University of North Alabama.

“I am happy we got more, but not satisfied with where we are.”

Ross Alexander, UNA’s vice president for academic affairs and provost, said the school supports efforts to a use data-driven methodology to determine funding.

“Despite any prospective gains with this year’s budget, UNA remains chronically and significantly underfunded compared to its peers within and outside of Alabama,” Alexander said.

The biggest percentage increase in funding in the Ivey proposed budget was 11 percent for Athens State.

“We sincerely appreciate the work of the Alabama legislature and their efforts to provide funding which will result in increased opportunities for all Alabamians,” school officials said in a written statement.

About 68 percent of the $7.1 billion budget is K-12 funding, which Orr said is now at 2008 pre-recession levels. Higher education funding is not yet back to what it was more than a decade ago.

The fiscal year 2020 budget also includes a 4 percent raise for K-12 and community college educators, more money for multiple K-12 programs, $25 million more to expand the state’s voluntary pre-K program to more schools, and additional funds for community colleges, including dual enrollment for high school students also taking college courses.

Senators did not fund a proposed raise for retired educators. Orr said he had “pages and pages” of other funding requests that could not be filled.

Alabama Daily News reporter Todd Stacy contributed to this report.