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Thursday, July 2, 2015

Opinion: New Funding Model Would Be Fairer to NKU

The following opinion is written by Brent Cooper.

When you look at some of the statistics from the Northern Kentucky University Center for Economic Analysis & Development, you begin to understand why the NKU Health Innovation Center is going to be so impactful not only for our region, but for the entire Commonwealth of Kentucky.

In 2013, 12.2% of all jobs in the Greater Cincinnati and Northern Kentucky region were in the health care industry. That’s doctors, nurses, pharmacists, home health aides, pharmacy technicians, medical assistants, etc. Those jobs translate to $5.9 billion in payroll. But those numbers are in the past.

According to projections, we are going to see over 35,000 new health care jobs, and over 16,000 health care job openings due to replacements by 2020. That translates to over a 38% growth for health care occupations!

NKU appears poised to be a big part of the workforce solution.  

But at the same time there is excitement about the Health Innovation Center at NKU, there is concern from educators and businesses alike about the lack of state funding for post-secondary education, as well as the way the state decides to spend that funding.

In other words, we don’t just have an issue of adequacy, we have an issue of outcomes.

The issue of adequacy isn’t just at NKU, but at all universities across the state. The lack of state funding is a big issue. Our post-secondary institutions are serving more students, but state funding hasn’t held steady. Universities throughout the Commonwealth have seen cuts nearly a dozen times since 2000. As a result, we’ve seen regular increases in tuition costs.

The tuition and fees at my alma mater (University of Kentucky) have gone up more than 340% since I was in school. Don’t let my hairline fool you, I’m not that old!

These costs have become a real barrier to getting the workforce we need. They are also, in my estimation, a hidden tax increase on families with students pursuing higher education. We need to increase funding for higher education in our state and address the adequacy issue that is putting us at a competitive disadvantage.

At the same time, we need to address the issue of productivity, which should determine how much we are getting in our neck of the woods.

How bad is it? According to a recent presentation, NKU is receiving nearly $3,000 less per student than the average comprehensive university in Kentucky.

NKU President Geoff Mearns believes that we need a rational, strategic funding model that allocates state support based on the relative productivity of each institution. This is called an outcomes-based funding model.

Why do most business leaders I have spoken with embrace this concept?

Because improving our collective workforce is a top priority, and incentivizing the outcomes we want makes a lot of sense.  We want our universities to produce more associate degrees, bachelor degrees and master's degrees? Well, the outcomes-based models say, “If you produce more degrees, your institution gets more money.”
Today, universities get state funding based on historic and geographic politics.

With the current system, a university losing 5,000 students, or conferring 1,000 less degrees this year will keep the same amount of state funds it received last year.  In the future, under an outcomes-based model, the universities would receive funding only based on the outcomes they produce.

That kind of policy shift makes much more sense to me.

Of course, there are potential unintended consequences policy changes, so lawmakers will need to work together to ensure access and quality are maintained.

But without a comprehensive change in the way our post-secondary system is funded and dispersed, we aren’t going to get the results we want.  

I hope you will support an outcomes-based funding model and increased funding for higher education. We need a system that addresses both adequacy and outcomes.

Brent Cooper is the president of C-Forward in Covington.

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