The way Missouri allocates taxpayer dollars for higher education is fundamentally flawed, and as Chairman of the House Budget Committee, I believe it is time to fix it. In Missouri, each two-year and four-year public college and university receives what is called a “core” amount of funding. This core funding varies wildly from one institution to another. There is no formula, no methodology, and most importantly for taxpayers, no rational explanation for why any college or university receives the state funding that they do, much less why they receive what they do in relation to other institutions. Their core funding has been cobbled together for several decades. Some years this has resulted in an across-the-board percentage increase for each school’s respective core. Other years certain institutions have successfully advocated through the political process and have their core increased by seven-figure sums in relation to other institutions.
To put this in perspective, Truman State University in Kirksville receives from the state $18,075 per full-time student whereas Missouri State University in Springfield receives $6,589 per full-time student. If you have two high school seniors living in the St. Louis area who both decide to major in History, but one goes to Truman State while the other attends Missouri State, the student attending Truman State currently receives nearly three times the level of state support. This disparity has nothing to do with students or their majors, but simply the result of many decades of budget history.
This issue is not as pronounced with our two-year colleges as it is with the four-year universities, but the problem exists, nonetheless. A full-time student at Moberly Community College is supported to the tune of $3,058 while a full-time student at St. Louis Community College is supported at $5,031.
A new methodology for Missouri higher education funding is necessary to ensure quality outcomes while also remaining a good value for both taxpayers and tuition-paying families. The General Assembly has a duty to ensure that taxpayer dollars are distributed fairly, transparently, and in a way that reflects where students are actually choosing to attend school.
Every state college and university has unique qualities about it. They are quick to tell legislators about what separates them apart. However, it’s nearly impossible for legislators to quantify all the unique features, especially when considering that every institution is different. An important point that must not be forgotten is that state support is not the sole means of revenue for colleges and universities and that based upon their unique features, they generate additional income from sources like tuition, fees, private fundraising, and in the case of community colleges, property taxes as well.
Also, it cannot be overstated that the current method of funding takes nothing into consideration, not academic performance, not graduation rates, and not even how many students attend a particular institution. Many Missouri public colleges and universities have experienced decreasing enrollment over the past decade, some with decreases greater than 25%. Every one of these schools has seen their state funding increase even while their enrollment has decreased, and significantly in some cases. Other schools that have seen their enrollment increase receive less money per student relative to other institutions and in this way the state effectively penalizes them for their own success.
As a matter of public policy, the State of Missouri should fund students, not institutions. That is why I am proposing that beginning next fiscal year Missouri adopt a simple new model of funding for higher education. The single best indicator for determining where taxpayer dollars should go is to use enrollment data to view where students are choosing to pursue their college education and subsequently directing taxpayer dollars toward those schools.
In using full-time equivalency of total credit hours and dividing it by the higher education funds available for appropriation this model relies on market forces to determine where taxpayer dollars should go. Instead of government attempting to micromanage institutional funding levels, this approach lets student choice guide the allocation of resources. So what would that look like?
For community colleges: the governor’s recommendations for community colleges total approximately $181 million and are divided by the total community college enrollment from last fall (104,145 FTE). This equals $3,656.11 per FTE.
Four-year institutions: the governor’s recommendations for four-year colleges and State Tech total approximately $726 million and are divided by the total enrollment at those 14 institutions. This equals $8,376.87 per FTE.
This model supports the maxim that “consumers vote with their feet.” State-funded support follows the student. When students choose an institution, state funding should follow that choice. This method of funding higher education favors a market approach. Sustained over a period of time, this funding formula allows institutions to choose their own destiny.
Missouri taxpayers deserve a higher education funding system that is transparent, fair, and responsive to student demand. I look forward to working with my colleagues in the House and Senate to modernize how we fund higher education by using a funding formula based on money following students and ensure that every taxpayer dollar is spent wisely.
Chairman of the House Budget Committee
