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Not surprisingly, the development of themission statements
set off a lively round of lobbying by campus presidents tomake
sure their institutions were defined in the most satisfactory and
rewarding fashion.
At the University of Memphis, President Shirley Raines said
she tried, and ultimately failed, to have her campus described as
a research institutionmore or less equivalent to UTKnoxville.
The difference between what she wanted and what she got
might appear subtle to a casual observer, but Raines said the
distinction looms large because a broader research role would
ultimately bringmore dollars into her university.
“We produce something like 150 doctorals a year,” she said.
“I think we compare very favorably to UTKnoxville on that
score, and we haven’t given up on this issue.There’s going to be
an opportunity to tweak these things over the next year, and I
expect we will take advantage of that.”
The mission statements have another, more nervous-
making purpose. By defining each campus, they serve as the
basis for that campus’ funding formula, the metric that will be
used to judge its performance.
The metric, in fact, is the beating heart of the Tennessee
system. It employs ten criteria, ranging from freshman
retention to research dollars gained. Each year an institution
will receive a score for each criterion.The higher the total score,
the more funding that campus will receive.
But the criteria are weighted differently for each institution
according to its mission statement.Thus the University of
Memphis, whose research component is not described as
loftily as UTKnoxville’s, will be rewarded less vigorously for an
increase in research activity than will the UT campus.
According to Raines, that difference could amount to
millions of dollars per year. Raines says she verymuch supports
the concept of an outcome-based approach to university
funding but is wary of what she sees as the devils in the details.
“I firmly believe that the people (at THEC) are working in good
conscience, and these issues will get resolved,” she said.
The new funding systembegins this year but will
incorporate what one education official termed a “soft roll-
out.” In effect, that means the impact of campus performance
on funding will grow slowly over the next three years until it
reaches the 100 percent level.
Because of the soft roll-out, no campus will experience
a sharp uptick or downtick in funding. And even after three
years, when the new system is fully operational, the formulas
will limit the annual loss or gain for an individual campus to
approximately two percent a year, according to Russ Deaton,
director of fiscal affairs at THEC. “It is designed to produce
incremental impacts,” he said. “Of course, over time those
impacts could compound for an institution with consistent low
scores.”
The reality that campuses will be competing with each
other for available dollars has not been lost on college
presidents in the state. All presidents and other campus officials
interviewed for this article expressed at least guarded support
for the new system, but the uncertainties have lent a breathless
quality to the experience.
A two percent swing at the University of Memphis, for
example, could amount tomore than $5million a year. With a
metric containing ten criteria, and a different weight assigned
to each criterion, predicting the result in
advance at any campus becomes virtually
impossible.
“I applaud Tennessee for being bold
with this plan,” said Carl Hite, president
of Cleveland State Community College
in southeastern Tennessee. “No other
state has come close to going from100
percent seat-count funding to 100 percent
outcome funding. At this point, though, I
don’t think anyone knows how the system
will play out for their campus.”
To add some clarity—and perhaps
to get the juices flowing—THEC has
posted a “dynamic model” of the new fundingmechanism
on its website that allows administrators to play with different
outcomes. A college president, for example, can plug in an
improvement in freshmen retention and see the extra dollars
flowing to the campus. Since the dynamic model assumes a
zero-sum environment, he can also see equivalent dollars being
subtracted fromother campuses.
Hite said he suspects every campus president has spent
some time with the dynamic model, spinning out scenarios,
and he laughs about his own experiences. “If I have a target of
100 in a certain area and I type in a result of 110, I can see how
much we get, and then I can see who’s going to be mad at me
because I took their money. When someone wins, someone
else loses.”
The complexity of the systemalso raises the question of
whether it could be gamed by clever campus officials. For
example, if retention and graduation rates reign supreme in
the new system, could some institutions raise their scores by
judiciously reducing the number of risky freshmen they admit?
Could graduation awards, or other criteria results, be shifted
fromone year to the next?
Rhoda, the executive director
of THEC, concedes that any
funding system is vulnerable to
manipulation, but he believes the
newmodel will prove to be more
honest than its predecessor. “In the
past, with enrollment funding, the
game was to bulk up in the fall when
students were counted,” he said.
“The new approach has been pored
over by campus presidents and
chief academic officers, and we’ve
tried to keep it as straightforward as
possible. If soft spots show up with
the new system, we can fix them.”
JohnMorgan, the Board of
Regents chancellor, says another
wrinkle lies in the system’s subtle but
perverse incentive for administrators
to withhold strategies that prove
successful. “If you are a campus
president and you find the secret of
success, youmight want to keep it
to yourself because your discovery
An analysis by Complete
College America shows
that only 12 percent
of Tennessee’s ninth
graders will eventually
earn a four-year or
two-year degree.
“Tennessee has become the leading edge
of change in higher education,” says John
Morgan, chancellor of the Tennessee Board of
Regents. “Other states are now looking at us
to see what’s going to happen.”
Wade Payne, Black Star, for CrossTalk