Facing a perennial budget shortfall, the Alabama Legislature is forced to consider how to best spend each and every hard-earned taxpayer-dollar each year.
Which is exactly why Anniston-Republican Sen. Del Marsh and Decatur-Republican Sen. Arthur Orr submitted a plan in the Alabama Legislature that seeks to establish greater accountability for the state’s higher education spending by creating the Alabama Community College Council on Outcome-Based Funding. The council would be tasked with rethinking the current postsecondary funding model and create a plan to shift to outcome-based funding for Alabama’s community colleges.
Like many state across the country, Alabama currently allocates funds on the basis of enrollment, which by-and-large ensures equitable distribution of per-student spending across institutions. Essentially, dollars follow students high school to higher education.
But the current system doesn’t always take in account whether or not students complete their college courses, transfer to other institutions, or even graduate. Which is why Marsh and Orr are hoping to change the system to one where dollars don’t simply follow students, but rather they follow successful students, by shifting the funding to what educators call an outcome-based or performance-based system.
Switching to an outcome-based system, endeavors to ensure taxpayer investments yield the best possible returns as they incentivize not only college access, but also college completion
“The goal here is to bring more accountability to taxpayer dollars that are spent by higher education institutions,” Orr remarked. “The Legislature appropriates over $1.5 billion annually to Alabama’s colleges and universities, and we need a mechanism for rewarding those institutions that are providing great value to Alabama’s students.”
According to the plan set forth — Senate Joint Resolution 85 — an advisory council will develop a specific outcome-based funding model for the allocation of Education Trust Fund appropriations to publicly-supported community and technical colleges in Alabama.
“Making government more accountable to the taxpayers is a top priority of the Alabama Legislature,” Marsh said. “We are committed to making any changes necessary in order to achieve that goal.”
Alabama isn’t the only state looking to make a change. Across the country, other budget-strapped states have been forced to carefully consider how their limited dollars are spent on higher education. Currently, thirty-two states — including neighbor-states Florida, Georgia, and Tennessee — now use, or are in the process of transitioning to performance-based formulas to determine higher education spending.
“Historically, many colleges have received state funding based on how many full-time equivalent students are enrolled at the beginning of the semester,” said the National Conference of State Legislatures. This model provides incentives for colleges to enroll students and thus provide access to postsecondary education, but this model does not necessarily provide incentives for institutions to help students successfully complete degree programs. Many states are reconsidering the enrollment-based funding model and instead are aligning funding models with state goals and priorities.”
Pending what the advisory council puts together, Alabama could be poised to join them soon.
A shift in process could not only help the state’s ongoing budget crisis, but also bolster state’s higher education graduation rate. Only 23.5 percent of Alabamians between the ages of 25 and 64 have an associate’s degree or better. In comparison, 40.4 percent of Americans in the same demographic do, according to the U.S. Census Bureau’s 2011-2015 data.
“This process is in line with our vision of providing all Alabamians with an affordable pathway to succeed through quality education and training,” said Jimmy Baker, Chancellor of the Alabama Community College System.
“We look forward to working with the Legislature to create a funding model that ensures we are accountable with every dollar provided to us and shows the successes of our students.”
According to SJR85, “the advisory council shall report its findings, conclusions, and recommendations to the Governor, the Chair of the House Ways and Means Education Committee, and the Chair of the Senate Finance and Taxation Education Committee not later than January 1, 2018” to be considered during the 2018 Legislative Session.