January 9, 2004
Welcome to the New Year and the first
Friday after the holiday recess. This report continues discussion found in
the December 5, 2003, First Friday regarding public funding issues in
Arkansas higher education. An attachment to that report depicted early
work on a “new” funding formula being developed by the Department of
There have been additional discussions
among the universities to refine the first iteration of the formula, and
the following changes are depicted on Attachment A of today’s report:
- Since all of higher education is funded
from the same “pot” of money, and we realize our proportional share of
the “pot” in relation to other institutions, it seems worthwhile to
consider on the same page all entities which receive appropriations.
That way, we can all see clearly what the proposed distributions will be
to everyone, including the medical campus and division of agriculture
(two big budgets), and the smaller entities, such as technical centers
and system budgets. Attachment A shows a range of all of the larger
institutions, their budget figures and other details.
- It seems worthwhile to define a “least
appropriation” scenario, historically a sum sufficient to equal 2.7% of
educational and general budgeted salaries, excluding auxiliary salaries
and those paid by grants. That sum is indicated for each entity on the
yellow line, or fifth row of numbers. For ASU-Jonesboro, our number is
$947,267, using 2002-03 salary data.
- It seems important to establish an
arbitrary baseline (in this case 75%) to identify equity needs for those
entities which currently fall below a specific level of full formula
funding requirements. The sixth row of numbers indicate that Arkansas
Tech University and the medical campus have equity needs, but that the
rest of us fall somewhere above 75% of full funding requirements without
additional appropriation of new money.
- When every increase is factored in the
distribution of new money necessary to achieve 75% of recommendation and
2.7% salary money, ASU-Jonesboro receives 7.07% ($947,267) of the
$10,575,252 in new money required for these objectives.
- We also wondered in the last report how
a formula distribution could be scaled in an equitable manner if varying
amounts of appropriations were received, as indicated toward the bottom
of Attachment A. For example, if $50,000,000 in new money could be found
and appropriated to higher education, ASU-Jonesboro would receive
$3,729,580 in addition to the 2.7% salary figure of $947,267.
As we study Attachment A, we can see that
our sister university, the University of Central Arkansas, which has fewer
students, passes the ASU-Jonesboro distribution as more than $100,000,000
is appropriated. UALR, a companion institution similar to our size and
scope of programs, starts out ahead of ASU-Jonesboro in appropriations
required, even though their enrollment and 2.7% salary adjustment need is
less than ours. How can these variations occur if we follow the formula?
Answers may be found in Attachment B, which
defines how the ASU-Jonesboro formula is defined. The formula is derived
from a matrix which includes the cost of various teaching disciplines at
the university, the definition of FTE faculty required to teach the credit
hours generated in those disciplines, and the average salaries needed to
pay faculty at the undergraduate, graduate (masters and specialists), and
doctoral levels. A summary of related expense allocations is included
toward the bottom of the page. Several things may be seen by comparing
these charts for all universities:
- Among the Level 3 institutions (UCA,
UALR, and ASU-J), we have fewer post-baccalaureate credit hours than our
peers. UCA passes us, and UALR begins ahead of our appropriation because
of graduate-level enrollments.
- More money is produced in the formula by
post-baccalaureate credit hour activity.
- Although ASU-Jonesboro has remained
relatively constant in FTE student enrollments, other institutions have
increased enrollments and credit hour production to the point that our
share of the formula distribution has been diminished.
- These data reflect only the four-year
universities and big budget entities, but not the two-year institutions.
If the “whole pie” includes all providers, the two-year schools have
increased their share of the pie faster than other entities, and they
have a different funding methodology.
- Some aspects of the expense categories
at the bottom of the formula page are still being defined, such as
funding for facilities or library costs, but the numbers depicted
typically do not reflect actual expenses necessary in these areas.
This information is provided to prompt your
response to any aspect of the formula distribution plan or the conceptual
basis of this developmental effort. Your commentary will be helpful in
- It will help form our response to ADHE
and the legislature about a method of distribution of funds which seems
equitable to all of us. Or, if something appears out of order,
commentary will help us bring things forward in discussion and
- The collective response will represent a
unified voice for higher education instead of fragmentary approaches to
funding, an aspect of previous operations which has been faulted by the
- Our local responses and considerations
will be important in our current strategic planning activity. For
example, if we determine to focus on post-baccalaureate credit-hour
production, we may develop specific plans and focused activities to
achieve those goals.
- If we can produce an equitable formula
and understand how our campus activity changes the delivery of funds, we
may determine how additional funding can be produced.
Much more work remains to be done on the
funding formula, but any iteration of a needs-based formula indicates that
more money is needed for higher education in Arkansas. That objective also
will require much more work before our funding needs are realized, but we
can start on it today.
I would welcome and value your comments on
this material, and urge that you contact me at email@example.com.
Les Wyatt, President