Appearances are Deceiving
Mar 14th, 2005 @ 10:55 am | Author: By Ellen-Earle Chaffee
Recent press on higher education funding has noted that VCSU has 96 percent of the per-student funding its peer institutions have – the highest figure in the state. Some legislators want to give more to the lowest campuses on the peer measure, which are NDSU, Bismarck State, and Lake Region. Some imply that the other eight institutions should get much less so that those three can have much more. They want a new funding strategy now.
The Board and the Chancellor support a funding strategy followed since 2001 in which campuses share funding increases up to a certain agreed-upon point. Beyond that point, any additional funds ("equity") go to the institutions at the lower end of the peer comparisons to bring them closer to their peers. This approach would reduce funding disparities, but only if the Legislature funds higher education as agreed in the Roundtable process. It has not.
Comparing NDUS institutions to similar ("peer") campuses out of state (the current approach) is more appropriate than comparing them to each other (the old way), but the system is very far from perfect. For example, the peer analysis has many built-in anomalies that can unfairly make VCSU appear to be funded at a high rate:
·The Board's consultant noted that the only ìtypicalî campus in North Dakota is Minot State – all the rest are atypical. They have no true peers.
·To accommodate campus uniqueness, many judgment calls went into the peer selection process for every campus. One result is that VCSU has both public and private peers. However, accounting standards have changed to the point that public and private institutions cannot reasonably be compared. We do not know the extent to which this transition may have tainted the peer analysis for VCSU, but it absolutely requires that we have new peers as a result of the current review process.
·Campuses have only nine peers; statisticians would require at least 30 for a valid sample. In addition, the results are given as a single point, without the usual range to represent the margin of error.
·The calculation is very volatile for small campuses. If this year's enrollment figure had been used, VCSU's rank would have been 88 instead of 96.
The complexity of the situation can also leave false impressions about our funding levels:
·VCSU does not have the ìmost moneyî – by any measure. Recent data show that VCSU is fourth statewide in dollars per student, behind UND, NDSU, and Mayville State. How can this be? The peer rank is based on out-of-state campuses, while the dollar comparison is for in-state campuses.
·VCSU also has the highest ratio of fixed costs in the state (utilities, repairs) and the lowest ratio of funds for salaries and programs. Fixed costs are due largely to the size and age of the buildings and grounds.
·VCSU has not had one additional state dollar for all the innovative programs of the last decade.
Recognizing issues like these, the Board plans to review and revise the peer system based on the first few years of experience, including re-evaluating the peers of each campus. VCSU will need new peers, and I predict that the university's position will change significantly.
Let me be very clear: I support the peer institution concept and the approach taken by the Chancellor and Board to implement it. I also agree with their position that the best way to reduce inequities is to a) allow the system to make adjustments based on experience and new information, and b) increase funding for all, with relatively more going to campuses on the lower end of the peer comparison. The problem is not the plan. The problem is if legislators use the plan to pit campuses against each other and to distract attention while they once again cut higher education.