CHARLESTON — The Finance Committee of the West Virginia Senate signed off on a bill taking the first steps in creating a new funding formula for colleges and universities and also giving some higher education institutions freedom from oversight.
Committee members recommended Senate Bill 550 for passage Thursday afternoon, relating to funding for higher education institutions. The bill now heads to the full Senate for consideration.
SB 550 would empower the state Higher Education Policy Commission and the Community and Technical College System of West Virginia to develop a performance-based funding formula for the state’s 10 four-year colleges and universities, and the nine two-year community and technical colleges.
Sarah Armstrong Tucker, chancellor for both state higher education oversight agencies, said the colleges/universities and CTCs have been working on developing a performance-based funding formula for the last two years. The bill would require the funding formula to be in place by fiscal year 2024 beginning in July 2023.
The funding formula would determine how much each college and university received from state taxpayers every fiscal year based on a set criteria and educational outcomes, focused on strengthening the state’s workforce and economy.
Any new formula must take into account some of the following metrics: the number of credit hours or workforce training hours completed by students; the number of degrees, academic certificates and workforce certificates awarded; the number of graduates working in West Virginia or pursuing further educational opportunities; research and development; and other criteria. The formula is based on a similar model adopted by Tennessee.
The Legislature asked the HEPC to create a pilot program for a performance-based funding model for the state’s four-year colleges and universities in 2017. That pilot project was put on hold after Gov. Jim Justice created the Blue Ribbon Commission on Four-Year Higher Education in July 2018. That commission dissolved at the beginning of 2019 with few new recommendations, but it did call for a short-term funding formula.
Rob Alsop, vice president for strategic initiatives for West Virginia University, said WVU supported the new formula.
“We really started in earnest before COVID and then COVID hit. And then once we sort of got our sea legs there, (Tucker) brought us all together,” Alsop said. “The legislation and the rule that they’ve been working on, I think it makes us accountable. I think it’s transparent and we are fully supportive of getting a funding formula in place and the basic provisions of that in the legislation.
An earlier version of SB 550 reviewed by the committee Thursday morning did not sit well with lawmakers. The bill originally included a section that would allow schools and community and technical colleges whose state appropriation is less than 40 percent of their gross annual revenue for a three-year period to be exempt from most oversight by the HEPC or WVCTCS.
“The idea is to encourage those schools who rely less on state funds to flourish with less state oversight that may allow them to become more successful under the parameters of the new funding formula,” explained Jeff Johnson, counsel for the Senate Finance Committee.
WVU, Marshall University, and the West Virginia School of Osteopathic Medicine are already statutorily exempt from oversight. Shepherd University and Fairmont State University have administrative exemptions. According to Tucker, every college/university and CTC in the state would be free from HEPC/WVCTCS oversight except for West Virginia Northern Community College.
“I think the funding formula portion of this bill has been worked on for two years and we are at a place where the funding formula is stable and I have agreement across the 19 colleges for it,” Tucker said. “I have concerns about the exemption portion of this bill. I have no concerns about the funding formula portion of this bill.”
Senate Finance Committee Chairman Eric Tarr, R-Putnam, said the exemption portion of the bill would likely force poorly performing colleges and CTCs to raise their tuition and show the value of their programs, while successful programs would likely receive more state funding through the new performance-based funding formula.
By Thursday afternoon, a new committee substitute for SB 550 was moved. The new version of the bill removed CTCs from the exemption portion of the bill. The bill allows exemptions from HEPC oversight for new college programs that would be incentivized by the new funding formula. It also says that four-year higher education institutions have to have a state appropriation that is 40 percent less than the operating expense of the college or university in order to be exempt from HEPC oversight.
Speaking Thursday morning, state Sen. Ron Stollings, D-Boone, said the bill should have been referred to the Senate Education Committee where he is a member.
“I just don’t want to harm our community colleges at a time that I think is critical for fast, nimble education,” Stollings said. “Apparently, this bill did not go to Education, so it’s just here in Finance. We haven’t had a chance to talk about it from an education standpoint, just a finance standpoint. And that worries me a little bit.”
“I don’t think that’s necessary,” Tarr said. “This has been the year-long work. All the university presidents have been involved with this … The HEPC has been involved with it. I’ve been involved with those discussions as well.”