Formula Funding

1. Formula Funding Jaclyn Mahlmann Director, Budget Office Katherine Bontrager Associate Vice President, Planning & Institutional Research

2. Methods of Allocating State Resources Funds flow to institutions of higher education in a number of ways: • Direct Appropriations- Formula funds and other direct appropriations based on identified needs • Special Items • Indirect Appropriations- Not made directly to the institution in its portion of the appropriations bill • Funds used to cover costs related to health insurance, retirement, and social security • Higher Education Fund • Higher Education Performance Incentive Funds • Dramatic Nursing Shortage

3. Key Terms In Formula Funding Semester Credit Hour (SCH): The credit awarded to students for classes on the basis of “seat time” in class and out-of-class student work. Weighted Semester Credit Hour (WSCH): Component of Formula Funding where a weight is applied to each SCH based upon the course offering and student enrolled. Supplements: Are additional funding given based upon a given criteria. Base Period: The 12 month period used to measure the SCH to be included in the appropriations formulas. It is the summer and fall of even numbered years and the spring of odd numbered years.

4. Formula Funding Two funding formulas and two supplements: • Infrastructure Formula • Instruction and Operations Formula • Teaching Experience Supplement additional weight of 10%to undergraduate SCHs taught by tenured and tenure track faculty • Small Institution Supplement

5. Infrastructure Support • Funded on a space-need projection model developed by the Coordinating Board • Not on the space you actually have The model has various dimensions: • Teaching Space • Library Space • Research Space • Office Space • Support Space • Utilities

6. Instruction and Operations Formula Funded on student enrollment Two basic concepts: • Base Period • Weighted Semester Credit Hours (WSCH)

7. The “Base Period” • This “base period” provides the most recent year of SCH data available when the Legislature meets in the spring of odd numbered years. • Base period SCH determines formula appropriations for the next two fiscal years.

8. What are weighted semester credit hours? We are funded by the number of SCH we teach in the base period, but not all SCH are funded at the same dollar value. • Conceptually, the formula weighting is supposed to reflect the differences in cost related to teaching courses at different levels and in different academic fields. • Graduate courses, for example, are expected to be taught in smaller class sections than undergraduate classes so graduate SCH are weighted heavier than undergraduate SCH. SCH X Program/Level Weight X Rate ($55.82)

9. What are weighted semester credit hours?, cont. Courses in different fields are also weighted relative to each other. • For example, a credit hour in a lower division History course earns less formula funding than that of a lower division course in Art or Engineering. • These “weightings” are displayed in a chart called the “Formula Matrix”.

10. THECB Weighting Formula Matrix2018/2019

11. Weighted Semester Credit Hours Weighted semester credit hours are SCH taught multiplied by the weighting matrix For example: • A 3-hour lower division history course with 20 students enrolled would generate 60 WSCH (20 students x 3 SCH x 1.00 weight). • A 3-hour masters level business course with 20 students enrolled would generate 196 WSCH (20 students x 3 SCH x 3.26 weight). • A 3-hour doctoral education course with 20 students enrolled would generate 415 WSCH (20 students x 3 SCH x 6.91 weight). SCH X Program/Level Weight X Rate ($55.82)

12. Getting from WSCH to Instruction & Operations income Each biennium, The Appropriations Act specifies the dollar value of each WSCH. • For FY 2018 – FY2019, the value is $55.82 per WSCH . So, looking at our examples again: • The lower division History course earned $3,349 (60 WSCH x $55.82). • The Masters Business course earned $10,941 (196 WSCH x $55.82). • The Doctoral Education course earned $23,165 (415 WSCH x $55.82).

13. Teaching Experience Supplement • An add-on to the Instruction and Operations formula. • It provides an extra 10%formula income bonus for undergraduate SCH that are taught by tenured and tenure track faculty and is increasing by 10% each year for the next several biennium. • The intent is to reward institutions for NOT using TAs and Adjuncts to teach undergraduates

14. UNDERGRADUATE WSCH TAUGHT BY TENURE/TENURE-TRACK FACULTY

15. PLEASE NOTE • The weight corresponds to the lesser of the type of student taking the course or the course level. • A freshman or sophomore (lower division student) takes a 300 or 400 level (upper division) course. The SCH are considered lower division and are assigned the lower weight. • A junior, senior or graduate student takes a 100 or 200 level course. The SCH are considered lower division and are assigned the lower rate.

16. UNDERGRADUATE ENROLLMENT BY STUDENT LEVEL AND COURSE LEVEL

17. Master and Doctoral Course Enrollment by College

18. Business

19. Education & Human Development

20. Liberal Arts

21. Nursing and Health Sciences

22. Science And Engineering

23. PLEASE NOTE, cont. • Some students are excluded: • Students taking a course for a 3rd time • Students who have exceeded the hours on their degree program • Non-Resident students in an online program • Student added to a course after census date • Population of Non-Resident students if their percentage exceeds 10% of the total population

24. TOTAL UNDERGRAD SCH and WSCH THAT ARE CALCULATED AS "IN EXCESS" (last base year) AS DEFINED BY THE STATE OF TEXAS

25. PLEASE NOTE, cont. • Course weights are not assigned based upon the college providing the course • Have Tenure/Tenure-Tack faculty teach high enrolled/high weight courses

26. Reviewing the Formula Decisions made in your college or department effect which portion of the formula? SCH X Program/Level Weight X Rate ($55.82) • Right courses for the right level • Course Rotations • Retention

27. QUESTIONS