Chancellors at several UW System campuses say they’re open to Gov. Scott Walker’s plan to bring performance-based funding to UW, but they say lots of details will need to be worked out.

In pitching the idea, Walker points to the example of the state’s tech colleges, where he introduced a funding model that tied money to performance on certain measures. So far, tech college leaders say their model is working well, partly due to the extensive feedback stakeholders gave in setting up metrics.

But experts and chancellors warn that bringing a similar model to UW would be far more complex. They also say Walker isn’t following his own example. With tech colleges, he and lawmakers set priorities to measure and then asked WTCS to develop the specific ways to track them. That’s the approach experts suggest when setting up performance-based funding.

“At the end of the day, this has to get implemented on the campuses,” said Dennis Jones, the president emeritus at the National Center for Higher Education Management Systems, a nonprofit group that consults policymakers and higher ed officials on strategic decisions.

UW-Stout Chancellor Bob Meyer, who was president of Wisconsin Indianhead Technical College when the tech college system metrics were created, said colleges spent months helping develop the WTCS formula and crunching the numbers.

Performance-based funding can be positive, he said, but it “needs to be implemented very thoughtfully.”

“We had a pretty good understanding of how this was going to work before we actually implemented it,” Meyer said.

With the WTCS model, Wisconsin is one of at least 32 states that has some version of performance-based funding at their higher education institutions, either at two-year colleges, four-year colleges or both, according to the National Conference of State Legislatures.

Research is far from conclusive that performance-based funding is a silver bullet; in many cases, research has shown it has unintended consequences.

Walker’s budget proposal would boost UW System funding by $140 million over the biennium. Part of that would come from $42.5 million that would be divided among campuses depending how they adhere to several criteria, which include how campuses perform on college affordability, graduates’ job placement and minimizing administrative spending.

That approach is much smaller in scope than the WTCS model, which has 30 percent of the system’s state funding tied to performance.

For UW, Walker’s proposal lays out five of the seven criteria, amounting to 90 percent of the $42.5 million. The regents would get to decide two of the criteria, which make up 10 percent of the funds. Walker also outlines specific metrics to measure the criteria he proposed and asks the regents to develop a formula based on them.

His office says he “consulted extensively” with the UW System in developing the metrics, and Walker told reporters in Milwaukee last month that the language makes the regents “the ones that ultimately work with us to set the policy.”

“I think taxpayers are willing to invest more money into the University of Wisconsin System, but they want to make sure it’s performing,” he said. “They don’t just want to write a blank check. They want to make sure that the investment we make leads to more graduates in high-demand areas for people who are going to be employed here in the state of Wisconsin so they can help the economy grow.”

UW System spokeswoman Stephanie Marquis said the system made suggestions at several meetings with Walker’s office and that Walker’s proposal “reflects a number of those suggestions.” The system also already tracks a wide variety of measures that are available on its Accountability Dashboard, she noted.

She said the system will “review these proposals more closely” and said the system will continue to stress “the need for the regents to play a central role in developing any performance-based formula.”

“While we have some concerns about how the metrics are structured and how the funding will be allocated, we believe the governor’s proposal offers a starting point for an important discussion,” Marquis said.

UW-La Crosse Chancellor Joe Gow and UW-Eau Claire Chancellor Jim Schmidt both said they’ve had conversations with the UW System on the issue but those talks didn’t get into specifics on the metrics.

But they also said they’re confident they’ll have enough time to weigh in during the coming months. Walker’s budget calls on the UW System to submit a plan to the state by January outlining how it will implement performance-based funding.

“I think it’s challenging to pull that together that quickly, but again, it depends on whether all the parties can work through the issues expeditiously,” Schmidt said.

Chancellors say formula needs to recognize varying campus missions

Chancellors and experts caution that Walker’s plan might not fully consider what they call “mission differentiation,” adding they’d rather be compared to peer universities elsewhere in the country than to each other.

For example, UW-Madison, a perennial heavy hitter nationally in research, now is joined increasingly by UW-Milwaukee, which last year was designated as having some of the largest research activities on campus. But UW-Madison is much more selective in admissions than UWM, whose mission includes being accessible to the population in Wisconsin’s largest city.

Other campuses vary on their balance of priorities like teaching, research and access.

Gow, for example, said it’d make more sense to compare UW-La Crosse to a similar college in Minnesota than comparing it to Milwaukee or Madison.

Figuring out that issue, experts and chancellors say, was easier for the tech colleges, which are much more similar to each other than UW’s 13 four-year campuses.

“Each of us have different missions and different student populations,” said UW-Platteville Chancellor Dennis Shields.

Any good formula needs to recognize those variations, chancellors and experts say, and it’s not clear Walker’s proposal leaves enough room.

“That, to me, is fundamental. Yes, it can work in a university system. But again, the devil’s in the details,” said Martha Snyder, the director of the DC-based HCM Strategists, which worked with Wisconsin’s tech college system on its model.

Tom Evenson, Walker’s spokesman, said the proposed formula for UW “includes a range of different measures to allow different institutions to thrive.” For example, he said, campuses would get rewarded if they enroll high percentages of low-income students, and UW-Stout would get rewarded for its successful efforts to ensure students can get a degree in three years.

Meyer, the UW-Stout chancellor, said the metrics should be “elastic” and perhaps apply differently from campus to campus. But he also said his campus is already performing well on some of Walker’s proposed metrics, such as graduates’ job placement rates and whether students have an internship during college.

“I’d like the campus to be recognized and rewarded for that,” Meyer said.

Key lawmaker says changes to Walker’s plan are possible

Sen. Sheila Harsdorf, R-River Falls, said that’s one of the key issues lawmakers will gather feedback on as they consider Walker’s budget proposal. Harsdorf, whose district includes UW-Stout and UW-River Falls, chairs the Senate’s higher ed committee and is a member of the Legislature’s Joint Finance Committee.

Another possible change is whether the metrics should apply to the campuses themselves — putting each of them into a competition based on rankings — or whether the model should look at systemwide metrics.

“We’re going to be looking at what the governor has proposed and make sure that it’s right for us,” she said.

Snyder, the performance-based funding consultant, said ranking institutions goes against what researchers consider a best practice.

Researchers have also highlighted several unintended consequences from performance-based funding. Columbia University’s Kevin Dougherty and his colleagues, for example, published a book in October interviewing officials in Indiana, Ohio and Tennessee and found some benefits to their systems. But they also found that to meet criteria, officials felt pressure and loosened their academic standards or became more selective in choosing which students get admitted.

“To pin down a really solid system is difficult,” said Schmidt, the UW-Eau Claire chancellor.

UW-Madison Chancellor Rebecca Blank is also raising concerns that Walker’s plan would put the performance standards in state statutes. Blank declined an interview request but wrote in a blog post the regents should be the ones to lay out the standards in UW System policy so they “function effectively and can be easily updated to meet changing state needs.”

Evenson, Walker’s spokesman, said since “all of Wisconsin has an interest in the performance of public higher education,” they should be set in state law.

“We believe these are reasonable metrics to ensure students are getting what they expect,” he said. “We will continue to work extensively with the UW System on performance-based metrics, but they should be meaningful.”

Tech college leaders say performance-based funding works well, though full effects unclear

Walker has said his proposal is similar to what’s in place at the tech colleges and that performance-based funding has been “highly effective” at WTCS.

But Walker is also proposing to change the model by removing the flexibility that colleges have in picking which metrics they’ll be judged on.

The WTCS model, in place since 2014-15, also hasn’t yet been through a thorough evaluation, a leading UW-Madison expert on performance-based funding says.

“There’s some elements of Wisconsin’s model that seem very promising …. but just because we have those things in place doesn’t mean you’re going to actually see results,” said Nick Hillman, a UW-Madison professor who’s shared his research on performance-based funding with Walker’s office.

WTCS, meanwhile, says its model uses best practices from other states, and leaders at tech colleges across the state say it’s worked well.

“It’s really been one of the best implementations that I have seen or heard about,” said Susan May, the president and CEO of Fox Valley Technical College.

Other tech college leaders, such as Gateway Technical College’s Brian Albrecht, say it’s strengthened their focus on the state’s priorities. Albrecht says since the model began, his college has become “much more aggressive” in developing partnerships with the private sector, such as providing on-the-job training for employees at Amazon’s distribution center in Kenosha or companies like Kenall Lighting.

“It helps to highlight the need to stay accountable and the need to share that story with the community,” he said.

Under the WTCS model, 30 percent of the money the state gives to the system is split up between its 16 technical colleges depending on their outcomes. Each college can pick which seven of 10 criteria it will be measured on.

WTCS spokesman Conor Smyth said since implementation, the system has seen a 27 percent increase in dual enrollment credits from high school students and a 13 percent bump in workforce training credits, where tech colleges set up training programs for employees at local companies. The system has also seen an 11 percent increase in industry-validated programs.

Similar figures for the other criteria aren’t available or easy to compare, in part because of regions’ varying demographics or local economies, Smyth said. It’s also not easy to gauge which campuses have gained or lost as a result of the change, he said.

Hillman, the UW-Madison professor, said he’d like to study the WTCS model in the future. But he said it’s got some positive aspects, such as the flexibility campuses have in picking the criteria; that might help Wisconsin avoid some of the issues other states have seen, he said.

Hillman’s research has found difficulties with performance-based funding systems in states like Washington, and he published an overview of past research on the topic last year arguing “performance-based college funding doesn’t work.”

Rep. Dave Murphy, a Greenville Republican who chairs the Assembly’s higher ed committee, said the WTCS system seems to be working and that the alternative was to “put the money out there” without any performance metrics.

Walker’s budget proposal would move the WTCS model away from letting colleges pick the seven criteria that fit them best. Instead, Evenson said, the colleges “will now be accountable for all 10 metrics.” Walker’s office says the adjustments would “prioritize Wisconsin’s education and workforce needs.”

WTCS Executive Vice President James Zylstra said the system is still evaluating the proposal, as are several other tech college leaders.

But May, the Fox Valley Technical College leader, said she’d “much prefer we keep the current model in place.”

“Frankly, the dust hasn’t even settled on this current model,” she said. “We’ve only been doing this for a couple of years. We think it’s working quite effectively, and I don’t know why we need to shift it and throw it up in the air and reconfigure it again.”

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