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Colleges’ Financial Incentives At Risk

ALBUQUERQUE, N.M. — A new method of funding colleges would use an extra $32 million in state money to reward schools for increasing the number of degrees awarded and student courses completed.

But days after the funding formula proposal was released by a Higher Education Department committee, department Secretary Jose Z. Garcia warned Friday that the state can’t afford the rewards.

Colleges should expect flat budgets, Garcia said. That means incentives might still be available, but schools won’t be able to earn money for their good performance.

The changes would also save the state money by funding completed college classes.

Currently, colleges are funded based in part on the number of students enrolled as of the 20th day of the semester.

The new incentive money was expected to help schools offset losses expected because the proposed new funding strategy would pay only for courses completed, according to committee officials.

For example, at Central New Mexico Community College, the change to course completions would cost the school more than $810,000 in lost funding next year, according to data released in the funding formula draft. UNM, which has fewer students dropping classes, would lose more than $400,000.

“We felt it would save money and it would be helpful if we calculated and rewarded institutions not for having someone in a seat on the 20th day of the semester, but for having that same seat (filled) on the day of the final,” Garcia said.

Garcia previously pledged to craft an incentive-based funding formula this year for colleges and universities. “What we’re going to do is tweak that formula and scale back. We’re going to sand the thing down and make the decisions according to the way that formula is working, without new money,” Garcia said Friday.

The proposed $32 million in incentives from the formula draft represents a 5.6 percent increase above the $577 million the state is paying for higher education this year. The number was compiled by the HED Funding Formula Task Force, which has worked since January to create the proposal.

University presidents are scheduled to comment on it later this month.

“They know that this will not happen,” Garcia said.

If new appropriations are available, the best performing colleges might receive up to 2 percent extra, Garcia said. It’s unclear how that would be determined, committee members said. The draft formula recommended increases between 10 percent and 16 percent for the top schools.

Curtis Porter, chairman of Garcia’s appointed Funding Formula Task Force, said eliminating the proposed incentive structure to produce more degrees and to focus on academic programs that train scientists, engineers and health-care professionals defeats the goals of the formula overhaul. Without the proposed incentives, the new formula can’t encourage necessary educational improvements, he said.

“That is totally contrary to everything that task force stands for,” Porter said of the cut reward programs. “(Garcia) was, as far as I knew, totally behind them. It makes no sense to me, that he wants to somehow make sure nobody gains more than so much.”

Porter, a University of New Mexico associate vice president, said Garcia’s mandate on Friday was the first he heard of changes to the funding model nine months in the making.

Institutions recognized changes could improve college academics, despite the potential losses to colleges because of course completion funding, said Kathy Ulibarri, CNM vice president for finance and operations. Ulibarri also served on the funding formula committee.

“We’ll have to deal with the short-term political realities,” she said of conflict over the draft. “But when you create a funding formula, you really want to think about the long-term and what’s going to serve higher education in the state of New Mexico.”
— This article appeared on page A1 of the Albuquerque Journal