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meeting those goals.
This strategy, known as
performance funding, has been
used for decades in other guises.
Typically it was employed as
a reward, or cherry, on top of
an enrollment-based funding
formula. If college administrators
achieved certain goals they
would be favored with a few extra
percentage points of funding.
The Tennessee plan tosses out
the enrollment formula altogether
and puts performance funding on
steroids. Henceforth, in Tennessee,
100 percent of funding will be
based on outcomes and none on
It comes as no surprise that
this idea did not come bubbling
up from the campuses.The
architects, rather, were a handful
of officials at the Tennessee Higher Education Commission
(THEC), working with the legislature and the office of then-
Governor Bredeson.
“A lot of things came together at once,” said Richard Rhoda,
executive director of the commission. “We had a governor who
would ask questions like, ‘Why aren’t students graduating from
our colleges?’ At the same time the state was reforming its K–12
system, and the issue became, how are we going to provide for
the larger number of kids successfully graduating fromhigh
Bredeson was a Democrat, and a plan to alter the higher
education system typically would set the stage for a political
battle in the legislature. But that did not happen, largely because
the proposals emanating fromTHEC and its consultants
emphasized accountability, cost savings, and the production
of educated workers—themes beloved to
Gordon Fee, a retired Lockheed
Martin executive at the Oak Ridge
National Laboratory, said state
businessmen were ready to support a
change in direction because they were
increasingly frustrated by the lack of
skilled and educated workers in the state.
“I would hear stories that managers
were going further and further outside the
state to attract people who could fill the
jobs they had,” said Fee. “You got the sense
that the state was producing graduates
with the wrong skills or in the wrong field,
and that we needed tomake a change.”
By early 2010, the Complete College Tennessee Act
was passed with hardly a dissent in the legislature.The first
provision of the act directed THEC to link higher education to
“the state’s economic and workforce development.”
College leaders initially were a harder sell. Dennis Jones,
president of the National Center for Higher Education
Management Systems and a Tennessee consultant, saidmany
campus presidents saw danger signals in the legislation but were
eventually persuaded that amajor change was necessary to pull
the state out of its trough.
“Tennessee is so far below the national average that small
tweaks weren’t going to work,” said Jones. “And a big selling
point was the economic impact of success. If higher education
met the new graduation goals, Tennessee’s per capita income
could rise 20 percent.That’s huge.”
The THEC plan that grew out of the legislation developed
several strategies to ease students’ path toward a degree, such
as uniform core courses and uniform course numbering in
community colleges and universities.
In addition, all remedial or developmental education was
handed over to community colleges, whether students are
enrolled in a community college or a university. Cleveland State
Community College in southeastern Tennessee has become a
national leader in designing computer-assisted developmental
courses, and it is hoped that the Cleveland successes will be
adopted on a larger scale.
But, in general, Tennessee laid out few such programs.
According to DavidWright, director of policy at THEC, the
planners inNashville decided they would determine “the what
and not the how” of the reform.
“We did not want to pretend that we had all the answers
here inNashville,”Wright said. “It seemed a better idea to let
each institution handle the issue of how to achieve the goals.
And if a particular institution comes up with a great approach,
it’s our hope that we can seize on those good ideas and scale
themup across the system.”
And so Tennessee’s fate in higher education rests almost
exclusively on the success of its incentive funding. And in that
area, the state planners have broken new ground.
To begin, each campus was assigned amission statement,
an otherwise innocuous-looking document that has the effect
of defining—and limiting—that institution’s academic pursuits.
The University of Tennessee at Knoxville’s mission statement,
for example, heavily emphasizes research, professional
education such as nuclear engineering, and, curiously,
In effect, the mission statement gives UTKnoxville a license
to pursue and expand those programs. And because other
institutions’ mission statements will not include some of UT’s
programs, UTKnoxville will be protected from incursions into
its turf. For the time being, printmaking appears to be safe at
the home of the Vols.
But what the mission statement gives, it also takes away.
Nowhere does UTKnoxville’s mission statement mention a
medical school.The campus does not have amedical school—
the mainUTmedical school is located inMemphis—and the
mission statement makes it more certain that the situation will
remain so.
Those limitations were intentional. “Under the old funding
formula using enrollment, the way (for a campus) to get
more money was to start new programs, and sometimes we
saw a duplication of programs,” said Rhoda. “Under the new
plan, which rewards the production of graduates, a lot more
thought will be given to where programs are likely to be high
“We will see some institutions with improved
performance who receive fewer dollars because
others improved even more,” says Joseph
DiPietro, president of the University of Tennessee.
“That’s when the in-fighting will start.”
The Complete College
Tennessee Act of 2010
spells out specific goals
for each institution,
then ties future funding
to the achievement
of those goals.
Wade Payne, Black Star, for CrossTalk