S.B. 216 Higher Education Performance and Enrollment Funding: transcript

Thank you very Much. Thank you for being with us this morning. Thank you very much. Um, as I look around this room, I know there are a number of you that have participated in these conversations over, um, the interim period. One of the things that Higher Education Appropriations Committee was asked to do was to re-look at our performance funding model. Uh, we had committed to schools that we would keep a funding performance model in place for five years. Um, if we decided to update it, we would do that, um, for the following five years, and we would give them a baseline year because they all need to make adjustments if there's adjustments in the formula in terms of, um, thinking about, uh, how they do things on their campuses. So what this does is put together a new performance funding model to support, um, beginning. This would not begin until after 2027, um, but it allows, uh, institutions to begin planning for that. Now. Uh, I think the key highlight in this is we've differentiated based on the type of the mission type of the institution. So for research universities, the focus, there's a focus on research, um, as well as completion, which we're expecting everyone to do, um, and high demand job areas. So all areas are expected to focus on high demand completion, but research universities, um, are asked to focus on, uh, also research and would be measured based on that. Regional universities would be focused on, um, thinking of as all, uh, open access institutions. Our community colleges and regionals. We focused on getting students through that first year retention. Uh, we all know that all the research shows if you can get students to 30 credit hours, you're more likely to help keep them, um, in the momentum of finishing their program. And then it focuses on high demand, it focuses on completion. And then there is a degrees per FTE, um, model that's in place for all the institutions as well. And that's an efficiency model. Um, it really says how many, uh, completers do we have, uh, per FTE? And as we all went through the process, um, for asking our institutions, um, to really look at 10% of their budget and thinking about how they could better utilize that budget, we realize that those are efficiency measures in a sense. Uh, if you've got a lot of low enrolled classes, low enrolled degree programs, et cetera, uh, that are not particularly aren't demanded by industry, uh, we need to have a mechanism for kind of watching that and being able to institutionalize that over time. So that's what happens in the performance model. In the, um, we also were asked to look at enrollment funding and um, we brought in some, uh, out outside expertise, et cetera, that, uh, they're moving much more towards thinking about enrollment funded by the level of instruction because lower division is much less expensive than higher, uh, particularly, uh, computer science and engineering, which, uh, or master's programs or upper division graduate that's a doctoral or when you give about law schools and medical schools, et cetera. So, um, this allows us to look at funding by the number of FTEs they have in each particular, uh, category and the kind of funding, what does that cost and however many lower division you have, how many upper division you have, et cetera. I think it's a better way of discerning and applying enrollment, um, funding in the future. Uh, I must say the way we've been doing it, we've been doing it at least, um, I've been around this world for at least 30 years. Um, that's how we were doing it. And it really was based on, um, kind of past, uh, performance in a sense in that it was based on what kinda level of budget you had already. Uh, and then that was like half of it. And the other in terms of the formula was based the increase in number of enrollments, but your funding level really was, um, determined based on what you'd been getting in the past. Therefore, if you were a UVU, um, who has grown significantly in the last few years, you're actually getting less per enrollment for the same enrollment than if you were at, uh, some of our other institutions that have been established longer. And we just think we need to kind of separate this model out better and, and focus on levels. And the third thing it does is to ask, um, a new category of funding was asked for by, uh, our UI system this year. They asked for capacity funding in our technical colleges based on wait lists. We don't have a framework for that. Um, I mean, how do we, I mean, what what's an official wait list? Um, what is, I mean, is that a wait list based on just phone calls? Is that a wait list based on people actually signing up on a sheet? Is it, I mean, so really saying we need a framework. If we're gonna do capacity funding in the future, we need a framework, uh, for determining how we do that. We believe the board can actually do that for us. Um, so we've tasked them with doing that. That's what this bill does. And I'm open to questions.

Thank you Mr. And thank you for that explanation though. I am, um, still trying to wrap my head around it. So I'm trying to, 'cause I'm looking at the fiscal note and I'm trying to walk through what you've discussed and I see that, um, the estimations in here for how the, um, income tax fund would shift between different technical colleges in a positive way and away from other, uh, universities in a negative way. And I'm just wondering if you can walk me through why that specifically is, I know you've kind of covered that, but just trying to make sense of it all.

We're trying to do it based on what cost of instruction is. And so if you're funding a technical college, which has, as you all know, um, very expensive programs that require low student, uh, ratios, et cetera. Uh, but yet we would consider them to be in that, uh, in just general enrollment category. If they're getting funded the same as our English classes, that's probably not sufficient to support technical col good technical college programs. So this is trying to say, let's do this, let's be much more reflective of the level and cost of the instruction. And that's what this model moves to versus here's how we did it. We said, okay, this school got 500 increase in 500 in enrollment. It could be any place along that spectrum. Okay, it's just 500. So nothing tied to cost at all. And then we said, and here's their proportion of what they normally get, uh, from the state higher education budget. So if you normally got 30% of the state higher education budget, you would get more money for those 500 enrollment than if you were at a tech college and you had a small number and you actually got a small number of the state budget. So this is trying to say, let's make it reflect cost. We haven't done this, I don't think ever in our history. It seems like it's time now to do that and it is how other states are moving.

Thank you. And if I could follow

So Does this only look at the, the program nature or does it also consider other factors like, um, uh, urban versus rural and other factors may increase costs for, for students outside of the, the, the program types?

It, it uses an average of costs, so it's gonna pick up higher, lower costs. I mean, we're not gonna do it by each individual institution, but it's getting closer than it did in the past.

Okay. Thank you. Alright, thank you.

No amendments or subs? That is correct.

Okay. I move to pass out a SB two 16 with a favorable recommendation.

Um, I'll waive. Alright, thank you.

Uh, to the members of the committee, um, I'd just like to note, uh, Senator Fillmore Hass, uh, Senator Fillmore, I'm sorry, Senator Millner has been working on this particular issue for a, uh, a number of years. It's been a, uh, it's been a regular discussion in our, uh, higher education appropriations, uh, committee. And, uh, I think this is a really good move in the right, uh, direction. It's, it's an adjustment to our performance and growth funding models. And, uh, I think that, uh, there was a tremendous amount of collaboration with the institutions and ushi to get to this place. And just appreciate Senator Millner and her work, uh, in this space. And, uh, this is, I'm, I'm definitely in support of this bill. So, uh, to Senator Millner, to some waive. All right.

Thank you. Thank you very much.

Is that online? Yes, I do have an amendment.

Go ahead Senator. Baldry, I'll moved. Okay.

Um, that was really, it's a, it's in some ways a technical change or a clarifying change just to make sure as people interpret, um, going forward that the, the law is clear, um, to everyone. So it's, it is a small amendment. So performance funding and enrollment funding have been something in higher education that, um, probably is something the legislature, um, has talked about for a long time. Certainly enrollment funding has been around, um, probably forever. Um, but performance funding is something we started about a decade ago. Um, as we started the process, we wanted to the institutions to be focused on performance, not just bringing students in and putting 'em in seats and really felt that it was important to measure performance and provide funding based on that performance. So, um, we set up a system to do that. Um, and as always, you learn when you put something in place, you learn. And so the next time we, we improved that system. And what we said is though, 'cause the institution said, you can't keep changing this on us. We need to do this over a five year period. So we know what for five years, we know how we're going to be measured when you then start the next five years. Well, in advance of that, we know how we're gonna be measured so we can create a baseline year and know where we are and plan towards that. So this is the second iteration of that cycle. Um, and here's what probably is most different in the performance money model here, and that is that there's variation, um, between mission of the institutions. So our community college and our, um, regional institutions have measures that relate to, um, the first year students because we know if you, if you have good first year retention, you're more likely to stay in school and to graduate. They have measures around completion. Um, I have to say, uh, there was an interesting story, a couple of slides in higher ed approaches this morning that showed, um, both for Bridgeland tech as well as for Ogden Weber Tech, how much their completion has gone up now that they're part of this performance funding program. And it became clear that what they're doing is really setting up a culture of completion at those institutions. And I think that's because we are providing an incentive, um, for that. Um, the third area is high demand degree programs, making sure we are meeting high demand industry needs in our area. And the fourth, uh, measure is a degrees per FTE. It's an efficiency measure. And the goal of the efficiency measure is to make sure we're not doing things that really don't have payoff out there. And that we're always conscious about what are we doing with our money and we're ending up with degrees as a result of that. And if we can keep improving that way, we might not have to do a 10 year, every so many years, kind of do a reappropriation process for higher education. This could just become part of what they do and set up their own internal systems to do because they would benefit from that. Um, on the other hand, um, we would like our research universities to focus on research and graduate study and those things. So, um, we're, and that, so they would be funded on high demand degree areas because we need them to be funded on that. They'd still be funded on completion. But the other metric that would come into place for them is, um, and degrees per FTE, we want them to be as efficient, um, measured against themselves, um, continue to be more efficient. But the last is research dollars, um, because it's really important for our research universities that they get measured on that it's important investment for the state. And the other piece of that, um, is that's, that's their mission. That's one of the things we're expecting and asking them to do. We're not asking them to be at community colleges. We're asking them to be research universities and we wanna reward that and we haven't done that in the past. Um, so, and it's, um, it's possible to go at, to get that data. Um, and so, uh, with that we think we have good measures for being able to get that. So, um, this would set this in place then for, um, so we'd have a baseline year and then it would set in place for the next five years after that. Give the institutions plenty of time to plan for that. The other, uh, uh, change we're making here is we had a long discussion about enrollment funding last year. And, um, we have people with varying views about enrollment funding that usually is based on whether people are growing or they're not growing or any of those things. And do we only give them money when they grow, but we don't take it away when they decline, et cetera. And how do we smooth that process out over time? So that became another piece of this. So our goal with this is to say we're gonna do enrollment funding, but we're trying to try to smooth it out over five years. So over five years, we'd measure your enrollment now and then they'd take the next five, and then we would move that up a year. If over, if you are increasing enrollment on trend on average, uh, over 1%, then you get enrollment funding. And if you, uh, aren't, then you won't get enrollment funding. On the other hand, if you are going down more than 1%, you will lose enrollment funding. So it's a way of still using that as a measure, but not just jerking at the money, being able to be much more planful about it and kind of, uh, making by spreading it over that kind of five year average, uh, we can be more intentional about the funding and what they can expect and they're gonna know, uh, they're gonna be able to see what's happening there. So, um, we did some, uh, kind of modeling of that and we will have a couple of institutions probably that, uh, we'll see some enrollment money go down, we'll have others that see their enrollment funding go up. Um, that's just part of how it's gonna be in this scenario. And um, then, Uh, we had a pretty elaborate process for how we were gonna approve this and folks went crazy. Um, 'cause we had half the legislature staff went crazy. So what we did is just say it would come to higher ed approaches for, to approve their measures and then go to executive approaches. Um, so we have some accountability. They have to get, um, the measures they put in place approved, uh, prior to starting this on the five year cycle, but make it a little less complex than it was. And, um, with that I am open to questions. Thank you Mr. Chair.

Yeah. Interesting. So let's start with the first one. Yeah. Um, one of the things we wanna do, because my head concern about we did use just four and five star jobs before. Mm-hmm. You will see in this one now that, uh, the system will decide, um, going through a process, they can add five kind of high need jobs that are needed that we need in the state. Teachers might be an example of that. Um, they may not come out because of salary or, or whatever, but they could be identified as, we still have a large gap in terms of, uh, teachers in the state, and therefore that needs to be one of the jobs that we consider in this. So that's the reason for making it a little more flexible this time. Mm-hmm. But they would pick the five yards and the five jobs for, uh, the degree granting institutions would be different than the five jobs for the tech colleges. Mm-hmm. So not trying to make everybody fit into kind of one, one job set. Yeah. So I think that provides the flexibility to try to address what you're talking about, which I also had concerns about. So, um, felt like as we look through it all that, that there will, that, that would really elect facilitate our being able to identify really high demand jobs we have in this state that might not fit in that traditional kind of, um, workforce services four and five star job.

Uh, I don't, I don't think we have a way of this. This is really looking at saying, let's help our students come and stay and help support them to complete. Okay. That's the idea here.

If they get a certificate, they, they get counted. Okay. That's so it's not just a degree. It's not just a degree, it's a certificate. If you get a certificate, you count.

did you have your light on? You want to use my Go Ahead. Well, I did, but uh, I'll put it back on.

You know, like, anyway, I always just like to compliment you. Uh, you know, uh, I think that the, the trades have been neglected through our higher education personally and, uh, you know, like the IBEW and National Brotherhood of Electrical Workers, they've had to do their own apprenticeships because, uh, education has not been there for our trades, like plumbing and, and metal works and different things like that. You know, I mean, they seems like they've done pretty well with welding and a few, few things, but, you know, actual fabrication and things like that, I think it's been neglected and now we're, uh, so far behind in our trades and I just, it's time that, you know, higher education if they wanna keep receiving tax dollars, need to, uh, be able to address the workforce that we need. And, uh, I just like to compliment you on that. Thank you so much.

Thank you. That's the goal here. Uh, I I, I love it.

Thank you. Committee. Thank you Chair. Uh, Brad ac, president of a FT Utah, and, uh, a FT has not taken a position, uh, on this bill. We're listening today and I really appreciate Senator Millner for her explanation on how this will roll out and appreciate the co-sponsor, uh, Representative Peterson who happens to be my representative and all the work they've done, uh, on higher ed and the restructuring. I just wanted to point out, um, from our faculty and staff that we represent, these bills get a bit confusing as they're talking about different kinds of funding, how that's going to affect them and, uh, what that can do to programs and maybe moving different programs and priorities. Um, so as these roll forward, uh, would really appreciate our, our good legislators if they can assure that, uh, yushi and, and that information can get down in a clear way to our, to our faculty and, and our staff so that they can understand how that rolls out. And they've been really good. Um, Senator Millner has been really good about communicating that with Yushi and, and if we can just assure that faculty and staff are, are thought about and they have been in many things and that's improved greatly. Thanks.

Mr. Chairman, I would like to make a motion that we pass out, uh, Senate Bill two 16 as amended with a favorable recommendation for the full body of the Senate.

I'll waive?

uncircled to you. So, uh, in addition to that, this is a bill that we've been working on in higher education appropriations over the summer, uh, to work on our, our performance funding model, uh, going projecting into the next five years as well as realigning in our enrollment funding model. But in addition to that, this time our tech colleges ask for capacity funding and, uh, we really don't have a framework for capacity funding. So I wanna amend this bill, uh, with amendment two that would ask the board to develop a framework and guardrails, uh, for capacity funding in the future.

Thank you very much. Um, so Senate bill two 16 as amended as I said, um, we'll do three things. One, it sets in place what will be the next five years of performance funding metrics. Uh, we've told the schools that we will keep them, um, we'll do this only every five years so they can anticipate changes. Next year would actually be a baseline year, and then this would govern performance funding in the future. It's a realignment of enrollment funding from what we have always done to something based on level of instruction. And third, um, it would put in place, uh, some guardrails on a framework for capacity funding for our tech colleges. And with that, um, I'm open to questions.

Senator Vickers Baldy Aye. Lewin Aye. Rammer Aye. Bus? Aye. Comore Aye. Escamilla Gilmore. Grover Harper Kinins Aye. Ipson Aye. Johnson. Aye. K McKay Mikel Aye. Milner Aye. Musman Aye. Owens pitcher Plum rebe Sandal Stevenson Stratton Bickers Weiler Aye. Wilson Aye. Winterton President Adams

Motion UNC encircle Senate bill 21 second substitute. Okay. The motion before us is to encircle second substitute Senate Bill 21.

Thank you. We're trying to set the policy for geothermal in our state and we've looked at, uh, all the, our Western states and different, different states attach it to different, either to the surface or to the mineral estate in Utah. The policy that we're looking to set is we would attach the geothermal to the surface estate. The exception of that would Besla worked with SLA and, and Sitler would remain, um, they, they could attach it to their mineral estate. And if they've done that, um, there's, there's some good Juab, um, justification for that. Federal lands are actually attached to the mineral estate as well. With that, I'm open for questions.

Question of the sponsor, Have you yield for questions?

I don't think I missed a substitute or anything, is that correct? Uh, has any of the concerns that were expressed by, by some of the industry folks have been addressed at this point with this bill, Uh, to Senator Mikel?

Yeah, so we're, we're at the second substitute. Some of the concerns have been addressed. Not all of the concerns are addressed. We're gonna continue to work on those that this bill moves forward. But we're trying to address stakeholder concerns as it moves forward. Um, there, there are folks vested with interest on all sides of this issue, and that's where it's difficult. Um, there, there's no perfect solution for every entity dealing in the space. And that's why we actually need to have the policy. We need to have a policy. So moving forward, we know who vest these rights, but right now is is it perfect for every entity in this space? No. Um, the concerns of Sitler have been entirely addressed in the second substitute.

No thank you. Alright,

Yeah. I'm gonna waive summation to move this bill be read for a third time.

Senator Vickers Baldy blue in Bremmer bus Colmore colmore Aye. Escamia Aye. Fillmore Aye. Grover Harper Aye. Hankins Aye. Ipson Johnson Juab McKay Aye. Mikel Aye. Milner Aye. Mussman Owens pitcher Plum

You very much Mr. President Pro Tem. Um, this bill is one that we worked on through Interim and Higher Education appropriations. It sets for the next five years the funding formula for performance funding. Also tweaks our enrollment funding model and then asks the State Board of Higher Education to develop a capacity funding model if we're going to continue to fund capacity. Um, and with that I'm open to questions.

Thank you Mr. Speaker ProAm. So, um, this is our performance funding bill. So we've had performance funding metrics for our universities. So this is, uh, the way that we reward our universities for certain outcomes, um, that, um, that we want. So we, we, we set metrics, we set standards, and then we, we, um, reward our universities for meeting those standards and metrics. We've had this for a while, um, and we've learned some things along the way. And one of the concerns, there's probably two big concerns that have come up with our current, um, performance funding metrics. The first is that, um, every, every university and technical college has the same metrics. So if you think about what we want out of the University of Utah as opposed to what we want out of you Uintah base and technical college, we don't actually want the same things from those, uh, institutions. And so one of the things that this performance funding metrics, um, bill seeks to remedy is making sure that the metrics are, uh, fit the mission of the institution. So that's one of the big changes in how we're gonna do performance metrics moving forward. The second is our performance funding metrics. Before really, um, only really incentivized, um, first time students that were graduates from high school. So this just those, um, students coming straight from high school going into our universities. Um, the thing is, we want our universities to also focus on adult learners and people that might need to re-skill and retrain. So, um, we're going to be changing the performance funding metrics. So the idea is that we'll put these in code now that next year we'll be our baseline year where every, uh, university and technical college will be able to see where they fall on these metrics. And then the next year is the year that the legislature will hold them accountable for those metrics. So we have a little bit of lead time for them to be prepared for this shift. So, um, for our research institutions, our metrics are going to be timely completion, high demand, which is different than we had before. Right now we have high yield, which is, um, just really, uh, professions and programs that lead to jobs that pay a lot. But we also need some professions that maybe don't have as high of pay, but they're high demand in our state. So you think about things like social workers or educators. Um, so we want to also reward programs that are doing that. And then institutional efficiency. How many students can get, uh, are getting degrees based on how many full-time equivalents are part of the, um, of, of the school of the university. 'cause we want some also efficiencies. We want them to think about how they can move students through their university at what cost. And then for our research institutions where we, we will be measuring research. Um, and then for our regionals, we have all the same metrics except for instead of research, we have first year coursework, which we're gonna be thinking about how can they get a student to 30 credit hours? 'cause we know once a student hits 30 credit hours at one of our regional univers uh, universities, they're more likely to complete. So rather than saying we just are incentivizing getting students in the door, what we're gonna do is we're gonna incentivize getting students, uh, on the way to being successful on the way to a completion. And then with our technical colleges, they will have a metric specific to job placement that's incredibly important in our short term certification programs. So that's the first part of the bill. The second part of the bill is about enrollment funding. So we're gonna be looking at our universities and, and technical colleges on a five year rolling average. If they are increasing enrollment, then we'll be able to, um, get them some additional funding if they, um, are, are exceeding 1% of new students. But, but on the converse right now, we have no way of when institution is declining in enrollment to actually think about how those funds are pulled back into the system to maybe, uh, maybe more high growth areas. So, um, the bill will also do that. And then finally, you've all heard from your technical colleges about wait list issues. So, um, this year we funded some capacity funding to try and address those wait lists, but we don't have a real systemic way of thinking about capacity and thinking about how those wait lists, um, might determine where we need to put resources. And so this will direct the board to come up with a system, uh, to think about capacity so we can be more proactive on those wait list areas. So that's the bill. I'm open to Any questions?

Thank you Mr. Speaker ProAm, I'd like to move, uh, amendment five in my name Motion is to adopt amendment number five. That's in order. Would you like to speak to it? Yes. On line 10, it says, it requires the higher education appropriation subcommittee to ensure the inclusion of certain factors in nons statutory funding formulas for technical colleges. And then on line 78, it says, and ensure that all nons statutory performance and growth funding formulas that contribute to appropriations for technical colleges include equivalent funding for secondary and adult students and reflect the full responsibility of the technical colleges, uh, statutorily required services. And so what this does is it, it was something that we worked on last year and it, it just will, um, help our technical schools and we, um, it was worked out with the, uh, commissioner landlord. So, um, I'm hope I the good, good sponsor and I have worked on this together.

Thank you. We've done a lot of work in our legislature the last couple of years thinking about ensuring the ROI of our institutions and thinking about how our state tax dollars go, uh, to our institutions. And also just the experience that our students have. We wanna make sure that our students are able to go to our institutions and participate in programs that really do lead to outcomes. Uh, performance metrics is one of the tools that we have as a legislature to ensure that's happening. So I'd appreciate your support. Thanks.

Thank you Mr. Speaker. I move that we encircle SB 54. The motion is to encircle Senate bill 54 Carson Smith Opportunity Scholarship Program Amendments.

I do wanna explain the changes. Only A couple of small changes made in honor of Representative Watkins and Senator Hinkins, um, based on their constituents. So, um, with that I move to Concur.

Senate Bill two 16 has been read three times a question as shall it pass. Roll call vote.

Senator Vickers Baldy Aye. Lewin Brammer bus Aye. Fillmore Escamia Aye. Fillmore Grover Aye. Harper Hankins Ipson Johnson k Juab McKay Mikel Milner Musselman Owens pitcher Plum Rebi Sandal Stevenson Stevenson Stratton Bickers Weiler Wilson Winterton. President Adams Aye. Senate

Bill two 16, having received 26 yay votes, zero nay votes. Three being absent passes his body and bail will be returned to the house for the signature.