West Virginia higher education policy under scrutiny

Delegate Paul Espinosa, R-Jefferson, and Senate President Mitch Carmichael, R-Jackson, are in agreement that the current system — in which the Legislature allocates funding for each of the state’s colleges and universities through appropriations in the general fund budget — does not appear to be working.

Instead, they believe tasking the West Virginia Higher Education Policy Commission with determining funding for the schools makes more sense, as that agency has a better understanding of how the colleges and universities work — and, in turn, could devise a better method for funding them.

This funding plan would be done by allocating a lump sum to the HEPC, with the agency, in turn, controlling the funding for the state’s colleges and universities.

In 2016, the four-year schools received about $265 million in state funding, according to the budget.

The funding change was on the table during the regular legislative session earlier this year in both the House and the Senate, but did not gain traction, Carmichael said.

This past legislative session, “we looked at possible changes to the manner in which West Virginia funds our higher education institutions,” Carmichael said. “What the House had considered, and what we had considered, was that all of that money would be vested with the Higher Education Policy Commission and they would break out the money per institution.”

Espinosa said the issue the Legislature has in allocating funding is there is no true funding formula for higher education.

“The concern was, if you look at how our colleges and even our two-year institutions are funded, there doesn’t seem to be any rhyme or reason,” he said. “… In reality, there is no formula associated with our higher education institutions. There really is an absence of any type of rationale for how our schools are funded.”

HEPC Chancellor Paul Hill said funding historically has been based on enrollment of full-time equivalent students, those who are carrying at least 12 credit hours a semester.

But those numbers often do not reflect the success of a college, whether it is growing, attracting and retaining students, or the types of programs being offered.

“The formula doesn’t make very much sense anymore,” Hill said.

That lack of direction means funding can vary wildly among various colleges and universities in West Virginia. Espinosa said it even varies geographically, with Eastern Panhandle institutions being some of the lowest funded in the state with no explanation.

“If you look at the per-student funding, you’ll see a dramatic disparity,” he said. “There is quite a bit of inequity there.”

The HEPC’S role

Jessica Kennedy, senior director of communications for HEPC, said the commission is primarily a coordinating board.

“We focus on statewide policy issues that affect the system as a whole and do not typically enter into the day-to-day operation of the individual institutions,” she said.

Kennedy said the commission has aided colleges in helping students transfer credits more easily from school to school, promotes programs to help student success and provides support and technical assistance to colleges with planning and finances. HEPC also has implemented shared programs between colleges where they can pool purchasing power or services to lower costs.

Hill said the commission is fairly small, with an operating budget of slightly more than $2.5 million. The budget appears much larger because of scholarships and pass-through grants, he said.

“There’s about $94 million that goes to the Promise Scholarship and higher education grant programs,” he said. “All of those dollars flow directly to the students and campuses.”

The commission has 46 positions, more than a half-dozen of which are currently vacant, Hill said.

Of the remaining positions, only three, including himself, work full-time for the commission, with the others splitting their time between HEPC and the West Virginia Community and Technical College System, which oversees two-year and technical schools.

Kennedy said the commission reviews college and university operational budgets, approves capital spending requests and reviews presidential selections and compensation packages.

“Again, though, this is more of a support process where we assist them in planning and look for red flags in spending or procedures that may not fall in line with our statewide goals to promote college access, encourage student success and support economic development,” she said.

The commission does have limited authority when it comes to tuition increases.

“We receive and submit all institutional budget requests to the state budget office and must review and approve tuition and fee increases that go above 10 percent in a single year,” she said. “This changed during the most recent legislative session. It used to be 5 percent.”

The Legislature’s Role

In the House’s proposed budget, funding amounts for individual colleges were removed and the money was placed under the HEPC to be distributed. Another bill, House Bill 2815, which was passed this session and signed into law by Gov. Jim Justice, directed the HEPC to study funding and report back with suggestions on how to make those funds more measurable and equitable.

“There was a thought process here that an independent entity could better allocate these funds,” Carmichael said.

At the same time, the bill limited some of the commission’s oversight of colleges — primarily in hiring practices — and exempted West Virginia University, Marshall University and the West Virginia School of Osteopathic Medicine from most of the commission’s authority. Those three also were not included in HEPC’s budget, but continued to receive allocations directly from the Legislature.

“I’m not absolutely certain why those exemptions were included,” Espinosa said of WVU, Marshall and the Osteopathic school, “but they traditionally have been exempt in other areas, and it may have just been keeping in line with that.”

The version of the budget submitted and vetoed by Justice, however, reverted back to the individual allocations for all colleges.

“Ultimately we restored the per-institution funding levels,” Espinosa said.

The Legislature and governor are still working on reaching an agreement on the state budget for fiscal year 2018, and funding for colleges likely will not be placed under HEPC in this budget, Espinosa said. Legislators do plan to review HEPC’s recommendations concerning funding next year.

“I anticipate that we will look to see exactly what the HEPC comes back with in January,” he said.

Espinosa said the state must take a hard look at its higher education system.

“It is a concern that I hear raised fairly often at the Legislature. What is the right size for our higher education structure?” he said. “Do we have too many four-year institutions? Do we have too many two-year institutions? That is something the Joint Committee on Education will look at during the legislative interims this year. We need to really study that issue to see if we can come to some kind of consensus.

“The challenge, of course, is to ensure that we have accessible education for all areas of our state, including rural areas, without diluting that shrinking pool of funding.”

“West Virginia is not unique in raising these kinds of questions,” Hill added. “It’s too early to say what we need to do without a complete survey. Until we have some empirical data to point to, I don’t think we can make those judgment calls.”

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