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Bruce Rauner

Illinois Gov. Bruce Rauner visits with students hoping to attend college during a visit on Feb. 24 to Southeast High School in Springfield, where he discussed his education agenda.

SPRINGFIELD -- While Gov. Bruce Rauner is calling for a 20 percent cut in guaranteed state support for public university operations next year, his budget proposal would spend an additional $50 million on “performance-based funding.”

That money -- 5 percent of the $1.01 billion Rauner suggests spending on state universities -- would be divvied out to schools competitively based on the number of degrees they award, the cost per degree, the amount of money spent on research and public service, and other measures designed to show how well they’re doing the job of providing high-quality, affordable education to students of diverse backgrounds.

Performance-based funding has been part of the mix in Illinois for several years, although to a much lesser extent. In fiscal years 2013 and 2014, it accounted for about $6.2 million of the $1.2 billion the state spent annually on four-year universities. No money was allocated for performance funding last year, and the state hasn’t authorized any funding for higher education this year amid its historic budget impasse.

The administration says the performance funding concept is meant to encourage schools to focus on providing value for students who attend the state’s universities and the taxpayers who support them.

“We really see this as a carrot, not a stick,” said Beth Purvis, Rauner’s education secretary.

The idea is increasingly popular across the country: 37 states have some form of performance-based funding for universities or community colleges or are in the process of phasing it in, according to an update last summer from the National Conference of State Legislatures. But some researchers and higher education officials caution that the setup can produce unintended consequences such as grade inflation and tightened admission standards.

Southern Illinois University President Randy Dunn expressed those concerns last week in front of the Senate committee that oversees higher education funding.

“You don’t want to have a situation where then you start rationing out accessibility to students on the basis of gaming the formula,” Dunn said, though he said that type of thinking “is not in SIU’s DNA.”

“Our DNA is accessibility,” he said. “It is bringing in all students who we think have any ability to show college success, working with them in retention programs, advisement programs, first generation (student) support.”

Dunn added, “You don’t want to have a performance funding model that causes an SIU to say, ‘You know, we’re not going take those students anymore.’ ”

A 2014 report from the Community College Research Center at Columbia University suggests that has taken place at public universities in some states that have shifted a greater percentage of funding to a performance-based model. The study, based on interviews with administrators at nine universities in Indiana, Ohio and Tennessee says, “The most frequently cited unintended impacts of performance funding across our colleges was restricting the admission of less-prepared students.”

Dunn, who supports the performance funding concept, said the level Rauner has proposed “is probably about the right balance.”

Eastern Illinois University President David Glassman said he welcomes the idea of more funding based on performance.

In his testimony before the Senate committee, Glassman noted that Eastern performs well on many of the measures used to determine funding.

James Applegate, executive director of the Illinois Board of Higher Education, is a major proponent of performance-based funding. But the board’s budget request for the fiscal year that begins July 1 calls for establishing a “foundation level” of funding -- a little more than $1.2 billion -- before targeting additional money toward performance funding.

Applegate, who came to the board from the Lumina Foundation, an early backer of the concept, said the state needs to stabilize a system that provides nearly 110,000 jobs and $10 billion in direct economic activity.

Once that’s done, it will be important to strengthen a funding method that encourages universities to help more students from a wider range of backgrounds earn degrees and do it affordably, he said.

“We need many more degrees, and we need them produced at less cost, and we need to target getting more low-income students of color and adults into college to get those degrees,” Applegate said.

Sen. Chapin Rose, R-Mahomet, is a member of the Senate committee that oversees university funding and another longtime advocate for performance-based funding. While he supports the governor’s push to make it a larger share of the state’s higher education spending, Rose said, “We’ve got to get out of the current emergency crisis we’re in.”

With Chicago State University facing possible closure and Eastern and other schools in increasing financial peril, Rose said he’s focused on gaining a consensus on a plan to get money to schools for the current year.

His preferred idea is one tying funding, at reduced levels similar to those proposed by the governor, to a measure that would streamline the way the state buys goods and services. Legislation has been introduced but hasn’t advanced. 

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