Performance standard agreement could allow tuition freeze

Legislators and higher-education officials have reached an agreement to tie a portion of the Montana University System’s (MUS) funding to performance standards as part of a plan to keep tuition steady over the next two years.

The yet-to-be developed standards will focus on each individual university’s ability to help students complete their degrees, and are intended to hold campuses accountable for their contribution to Montana’s economy.

Under the agreement, which has bipartisan support despite not yet being formally approved by the Legislature, the university system will have a year to study potential metrics, intended to focus on measuring its ability to help students graduate. Then, for the 2014-15 school year, around 5 percent of the state’s higher-education funding will be divided between campuses based on their performance with the chosen measures.

Every other year, the Montana Legislature allocates a lump sum of money to support the state’s higher-education system, which includes MSU and UM as well as satellite campuses throughout the state. The Board of Regents, which oversees the university system’s operation, is responsible for allocating that sum between campuses and setting corresponding tuition levels. About a third of the MUS’s educational budget is supported by state funding, with the remaining two-thirds coming from tuition revenue.

Regents have said they can avoid tuition increases over the next two years if the legislature allocates enough funding to provide for faculty and staff raises at the same level as other state employees and cover inflationary increases to universities’ operating costs. A measure to provide 5 percent increases to state employee pay is pending in the Legislature and the MUS estimates that inflationary cost increases will total around $17 million a year.

Higher-education representatives said agreeing to tie funding to performance was necessary for legislators to be comfortable allocating enough money to keep tuition steady. “Like all states, Montana has reached the point where any Legislature is wary of spending more money on any university system that isn’t up to the task of increasing graduates,” said Kevin McRae, the state’s Associate Commissioner of Higher Education.

Joe Thiel, the Board of Regents’ student member, said that performance metrics provide an opportunity for the university system to demonstrate that it is providing value to the state’s economy.

“We are one of the most efficient university systems in the nation,” Thiel said, adding that Montana has the second-lowest tuition rate in the country while providing below average support to the higher-education system from state funding. “We’re doing very well at delivering affordable and quality higher education.”

While the process of determining specific performance metrics has not yet begun, Thiel said he is hopeful that goals can be set in a way that avoids creating “large perverse incentives” like pressure to graduate poorly prepared students.

It is important, he added, to “provide some incentives for campuses to improve the quality of the education that they provide, and not just the quantity.”

Ultimately, however, Thiel and McRae said responsibility for maintaining academic rigor lies with faculty and administrators in specific departments.