Politico
[Preface: UFF-FAU holds strong objections to a performance funding-based model that applies a one-size fits all metrics across different student bodies that require different types of assistance and support. Routinely colleges and universities that serve historically disenfranchised students are penalized due to a lack of state resources to assist student success. The metrics as they are currently crafted refuse to address socio-economic differences in student populations by implicitly applying an outdated model of an idealized student body that bares little relation to the reality of the diverse student bodies that actually attend colleges and universities now.]
TALLAHASSEE — Gov. Rick Scott and the Legislature may be headed for a battle over state university funding next session, with lawmakers eager to wrest power away from a board of gubernatorial appointees that now determines how much money goes to each school based on performance targets.
The State University System’s board of governors created a system they use to evaluate each public institution’s performance, a 10-metric rubric that emphasizes graduation and retention rates, graduates’ starting salaries and more. Universities are awarded up to 100 points for achieving excellence or improvement on the standards.
Since the system first went into place in 2014-15, the board has used the metrics as a guide for how to dole out hundreds of millions of taxpayer dollars, with underperformers risking getting cuts. Scott, who appoints board members, has been a vocal proponent of performance funding and has consistently proposed adding more to the pot.
But lawmakers, particularly in the House, want to redesign that system, which they argue unfairly rewards or punishes some universities in ways that might be politically motivated.
They signaled their wish to see changes in a provision in S.B. 374 that would have directed the board of governors to study their performance-funding methodologies to find alternatives. But Scott vetoed the entire bill.
Despite Scott axing the bill — an action that he explained was unrelated to most of its changes affecting universities — the board plans to complete the study.
Lawmakers are hoping they’ll learn from performance-funding policies in other states and apply those lessons here. If they don’t, board members — and, by proxy, the governor — could lose some control over the multi-billion-dollar university system.
“Is it political or not? I don’t know,” said House Higher Education Appropriations Chair Larry Ahern, R-Seminole, referring to the current system. “We are always trying to take the politics out of it and just make it fair for every university to be able to compete, especially with the different missions they have and the different populations they have.
“Penalizing the smaller schools or the different student populations they have … just doesn’t make a lot of sense to us,” he said.
Meanwhile, Senate leaders already tried to legislate the performance metrics, which are currently implemented through regulation. Senate President Joe Negron said he plans to continue his push to emphasize four-year graduation rates in the metrics during next year’s session.
“We should constantly be looking at the metrics for performance funding,” he said during an exclusive interview with POLITICO Florida. “I expect we will continue to suggest modifications and revisions to make the system fairer.”
Politics of performance
S.B. 374 planted the seeds of a lawmaker-directed overhaul of university performance funding.
The bill’s directions were detailed, demonstrating legislators’ biggest problem with the system: the so-called “bottom three.”
Currently, the three schools that earn the lowest number of points get no new performance funding and can be at risk of losing some of their base funding. The schools that have often fallen into this category tend to be smaller — like New College of Florida — or serve economically disadvantaged students — like Florida A&M University (although there have been exceptions).
“The study must include various options, including options in which each university may be eligible to receive some portion of the state investment based on benchmarks that reflect the institutional mission of each university and irrespective of their performance-based funding model score relative to other university scores,” the bill said.
Lawmakers’ decision to require the study was more of a threat than a suggestion. As one university lobbyist put it: “They’re giving the board of governors a chance to say, you fix it, and if you don’t, we will.”
Leaders of the university system, though, have said publicly they interpret the requirement as a friendly nudge in the direction they were already heading.
Board of governors chair Tom Kuntz said last week that members would have done the study no matter what.
“After four, five years, it’s appropriate for us to look at the performance-based funding methodology,” Kuntz told POLITICO Florida during the meeting, which was held at the University of South Florida in Tampa. “Frankly, if 374 had never existed, we still were going to take a look at our methodology.”
Earlier, during a May conference call that followed the regular legislative session, system chancellor Marshall Criser argued the provision in S.B. 374 was not a directive that performance funding should be “spread like peanut butter.”
Scott’s office did not directly respond to a question about whether he approves of the board going forward with the study even though he rejected the bill that would have required it. Rather, his spokeswoman, Lauren Schenone, provided the following statement: “Our office is not familiar with the BOG’s plans for the study but we are always glad to work with our education partners on additional ways to help our universities ensure better outcomes for Florida students.” She then referred to his veto message, which explained his opposition to the bill because of how it would affect community colleges.
But the governor has been a fan of the bottom three concept. Whenever university officials have pushed back against the bottom three as being damaging to the schools’ reputations, the board of governors has countered that it was important to Scott and former Senate President Don Gaetz, who helped to design it, a university lobbyist said.
Since the members of the board are appointed by Scott and many are his political allies, it’s unlikely the group would do the report against his wishes.
Scott is committed to performance funding, but it wasn’t his baby. It was born out of a “red-wine-and-cigar discussion” between Gaetz, Kuntz and former board of governors chair and major GOP donor Mori Hosseini, according to a person who was familiar with the negotiations.
Scott and the leaders who helped create performance funding aren’t too worried about lawmakers’ maneuvering, because they believe it is established enough to weather further scrutiny, according to another university lobbyist.
“They feel like performance is here to stay now, and so tinkering with the metrics isn’t as much of a threat as it was in the beginning when they really, really had to fight for it,” the lobbyist said.
Changes under consideration
There’s now an opportunity for lawmakers who want more power over performance funding because they feel the current system gives too much discretion to the board, several lobbyists said separately.
And a few influential House members said they have an appetite to make some changes. It appears the bottom three aspect could be first to go.
Ahern said the system now is too volatile, leading to some universities jumping up in the rankings and getting big increases one year and falling back down when they can’t build on their improvements in subsequent years.
There have also been big gains and losses for universities when the board has made changes to the metrics. A prominent example this year was Florida Gulf Coast University losing $8 million because the panel changed how it calculated a metric that focuses on affordability.
When the board made the change, members knew FGCU would take a hit. The fact that they were aware of the consequences ahead of time made it look like the state was choosing to punish that school in particular, Ahern argued.
He said performance funding, as it is now, is “at the mercy of the political system. Or even if it’s not — it may be just the perception — that is a bad thing for us.”
In fact, FGCU’s difficult situation was at least one reason why House members called for the study. House Majority Leader Ray Rodrigues works as the budget manager for FGCU’s College of Arts and Sciences and represents Estero, where the school is located. He called the change that hurt his school “arbitrary.”
But he said he has been skeptical of how the board of governors has implemented performance funding for years.
“It struck me as off that New College could be regarded as one of the top liberal arts schools in the country and yet it was consistently in the bottom three,” Rodrigues said.
To his point, the small Sarasota honors college rose out of the bottom three for the first time this year and therefore only now will get performance funding. (Members of the board of governors have praised the school for making the improvements necessary to advance even without the incentive dollars.)
And unlike funding for K-12 public schools, state money for higher education funding is not allocated based on a formula that seeks to ensure equity, Rodrigues pointed out. So funding disparities exist within the university system, and he argued performance funding has made them worse.
Also, House members have said it’s not fair that schools can win enough points to meet the minimum performance standards but still qualify for no incentives.
State Rep. Elizabeth Porter, R-Lake City, who chairs the House’s higher education and workforce committee, called the bottom three aspect “counterproductive.”
“I’m hoping we can find a way to incentivize the universities to do better and also find a way that everyone can participate in the rewards, as long as they do meet a certain threshold,” she said.
University presidents are mixed on whether to get rid of the bottom three, a concept that has caused “a lot of tenderness,” according to University of Central Florida President John Hitt. Predictably, leaders’ opinions line up with whether they’ve ever found themselves there.
Hitt hasn’t, and he’s not sure how there could be a performance-based system without institutions that fall in last place.
“If you do a ranking on anything — if we all lined up by height — there would be some at the bottom and some at the top,” he said, also while attending the board of governors meeting in Tampa last week. “I guess how we term that and what consequences there are to being at the bottom — maybe there’s a way of softening the blow.”
The “blow” of landing in the bottom three “has the potential to demoralize,” said UWF President Martha Saunders, also at the Tampa meeting. Her Pensacola school has struggled under the metrics.
University of Florida President Kent Fuchs said, “I think you do need a negative incentive — loss of funds — if you don’t perform,” but he added he doesn’t believe schools with different missions should be compared to each other.
Along those lines, in addition to reconfiguring the bottom three, lawmakers might try to recreate the performance funding system so schools are compared to their peer institutions nationwide rather than to each other. That way, small, specialized or regional institutions wouldn’t have to compete with large research universities.
If universities are spending their time and resources working on the metrics the board has chosen, they could be losing ground when it comes to goals that will help them grow their national prominence or earn more external funding, university leaders and lobbyists said. One lobbyist called the current system “intramural.”
Lawmakers agree.
“The University of West Florida or the University of North Florida can’t possibly compete with what we consider to be our preeminent universities, like the University of Florida or Florida State University,” Porter said. “So rather than requiring them to go head to head, I think it’s better to set a performance standard and have them work toward that. Either they meet it, or they don’t.”
While House members have suggested they will use their legislative power to make changes if the board of governors doesn’t, Negron said he hopes to maintain a positive working relationship with them.
Also embedded in Negron’s priority S.B. 374 was his plan to change the performance-funding metrics so they measure four-year, rather than six-year, graduation rates. He hopes to see that move forward, through either law or regulation.
He said of the Legislature and the board: “I think you’ll continue to see us work together in symmetry.”