The way universities are paid by the state may be affected by input from SIU faculty and administrators.

After Jan. 1, 2012, universities will receive state funding based on numbers of enrollment, retention, and graduation rates thanks to legislation signed into law in August.

The Illinois Board of Higher Education Steering Committee is designing new measurements for how much money universities receive from the state. The committee members met Wednesday at Richland Community College in Decatur, where they discussed factors including how performance will be evaluated and where funding will come from.

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“The whole idea behind performance funding is that schools will be rewarded for output rather than input,” said  Allan Karnes, associate dean and professor in the school of accounting. In other words, don’t tell us how many students you have, but rather, how many degrees were awarded.”

Karnes, who is a member of the IBHE steering committee, said some committee members believe the new measures should be developed and implemented regardless of whether new funding is made available by the state. He said the measures could cause schools to compete.

“They’re saying we ought to use all of these metrics and take a piece of each school’s budget and put that in a pot and have the school’s compete for it,” he said. “So the best you could do is to get back to zero and maybe steal a little bit of money from another school. That’s a bad idea, and there’s research that shows other states that have done it, that if they do it on a peel-back method like that, it eventually fails.”

Chancellor Rita Cheng, who is also on the steering committee, said the competition for the funding is a major concern.

“I think the most important thing is the system can’t be gamed. We don’t want one university trying to attract students away from another university,” she said.

Cheng said she’s worried some universities would have an advantage in competition because they already have more resources.

“We also don’t want universities that have more money to be able to be more successful because they can attract students though scholarship or activities,” she said. “So, I think it’s really important we have a quality measure included … and that we have everything directed at the ultimate graduation of students from high quality programs.”

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Quality of a performance within a program is one of the metrics Cheng and Karnes proposed to the steering committee.

“One of the reactions to performance based funding is ‘Well heck, we can increase the number of degrees, we’ll just give them easy grades and we’ll graduate more people’,” Karnes said.

To dispel that fear, Karnes said the committee has considered measuring overall grade point average and the percentage of accredited programs at schools.

While the IBHE will decide what measures are used, one way the university has been involved in the decision is to help develop metrics by forming an advisory committee that consists of faculty.

Jim Allen, associate provost for academic programs, is a member of the advisory committee, which he said has worked to offer input on how the metrics can be shaped to better reflect the university’s performance. Allen said one significant concern is how transfer and minority students are factored in.

Some of the proposed metrics consider how many credit hours students have accumulated upon graduation.

While the university’s proposed measures reward schools that graduate students in less than 144 credit hours, Allen said students graduate with an average of 137 credits at SIUC. He said a part of performance funding should be rewarding universities for being more efficient with students’ money such as saving tuition for extra credit hours.

“Our strategy was to look at ourselves, our students, and to find what the state is considering, to find how we can be ahead at performance funding,” he said.

Proposed measures Karnes and Cheng brought to the steering committee that would reflect on four-year universities include the number of undergraduate degrees granted at the university; the number of degrees granted in comparison to the student population; remedial student success; first-year student credit hour completion; the number of credits student acquire before graduation; how many credits transfer students graduate with; and the number of graduate degrees granted.

Within many of those metrics, points would be distributed to the university for how successful sub-populations were in each area.

Some of the metrics look specifically at underrepresented groups including MAP and Pell Grant recipients, minorities, female- and male-dominated fields, degrees earned by transfers students, degrees earned by remedial students and degrees in high-demand.

“If we reward schools for providing degrees in high demand areas, then they’re able to contribute to getting rid of that shortage,” Karnes said.

A final area of measuring performance is research. Proposed measures for research include money that comes into the university as a result of research; how much students are involved in research; patents, copyrights, and trademarks that come as a result of university research; and performance, services and activities in the community by students in the field of study.

By improving areas defined in the measures, Cheng said the university could increase the funding received.

“If we can have more success in graduating students and retaining them it will be good for the economy of the state … and so it’s really important for us to look at ways to secure additional funding to accomplish our goals,” she said.

While measures are still being developed by the steering committee, Karnes said many members of the group that consists of state representatives, business people, and educators, are also focusing on the concern of how money will be distributed.

“What we are advocating for is to take the new money and leave the budgets the same, and then make new money available for competition,” he said. “That is being endorsed by the subcommittee, and I think it’s generally the opinion of the steering committee as well.”

From January to June 2012, Karnes said the committee would like to collect data, and then in June 2013 the state could evaluate how each school did in the past year, and depending on the school’s performance, it would receive its performance funding.

The steering committee may be in charge of developing measures, but the state will still be responsible for paying universities.

“There’s nothing that’s holding the state responsible for adequate funding for the universities themselves and adequate funding for student aid,” Karnes said. “I think we ought to have some measure of accountability on the state’s part as well.”

Karnes said the committee did not finish its discussion Wednesday, hwever, it will look closer at metrics for performance funding before presenting finalized measures to the IBHE in January.