An Update on the State Productivity Formula
You may recall that changes in higher education funding in Arkansas are now calculated via a productivity-based funding formula. Briefly, the funding formula calculates improvement of an institution’s productivity – aimed primarily at graduations and retention rates (based on comparisons of three-year averages over time). Unfortunately for A-State, the funding formula was implemented in FY18, following years when our productivity was in decline. That has resulted in A-State not faring well in the productivity formula. Fortunately, the state held us harmless in the first year (we didn’t receive any new funding, but we also didn’t lose any state funding). While our productivity improved in year two, we actually experienced a reduction in state funding because of the formula. The good news is that for this current year, the data reflects significant productivity improvement at A-State. For the first time in this new funding model era, we are projected to actually receive additional state funding for FY20 because of improved productivity.
I think it’s important to repeat: because of your hard work, Arkansas State has experienced remarkable improvement in student success over the past three years. I am proud of you, and what all of you have done to get us to this place. I especially want to thank the members of the Chancellor’s Commission on Completion for their efforts. By the way, I never want us to lose sight of the fact that we are not chasing productivity formula numbers here at A-State. It is important to remember that the productivity formula is really measuring student success. While there is an important impact of the productivity formula on our budget, success with the formula is more important to me as an indicator of how well our students are doing. Well done, my friends.