Higher education came before the House Appropriations and Finance Committee Monday afternoon, in what can best be described as the "Tale of Two Formulas" or the "Battle of the Funding Formula."
At the outset, committee leadership announced that this hearing would provide input for use by the HAFC Higher Ed subcommittee, which in the near future will make a recommendation on higher education funding to the full committee.
The Legislative Finance Committee (LFC) and Department of Finance and Administration (DFA) have both recommended budgets for higher education. If one just looks at dollars, the LFC recommends $9.2 million more than DFA for Instruction and General (I&Gl) and $2.2 million more for Research and Public Service Projects (RPSPs). The LFC recommendation is $1.3 million lower in the general fund line, but that money was shifted to the institutions.  In turn, the DFA pointed out that $46 million more than the LFC was put into funding performance metrics like course completion and degrees.
There is general consensus about key outcomes and goals. The real battleground lies in approach: how far and how quickly to implement change. The DFA reflects the Higher Education Department (HED) plan that takes 10 percent of institution I&G budgets and redistributes that money based on how well an institution has met performance goals. The LFC plan puts 2.5 percent of that I&G “at risk.”
And so began the arguments and counter-arguments. New Mexico Tech President Dan Lopez noted that “each institution has done a whole range of things to make performance measures work” and suggested the LFC recommendation was easier to understand and implement.  Eastern New Mexico President Steve Gamble added that the LFC plan provides institutions with more security by “giving us an idea of what we’re going forward with.”  He says the HED/DFA plan moves “too far, too fast.” CNM President Kathi Winograd echoed both, as institutions keep improving in outcomes.
HED Secretary Jose Garcia countered the arguments against complexity, saying “simplicity runs counter to the kinds of things we are trying to incentivize in state goals for workforce training. Institutions must respond to the needs for the workforce of the future.”
Rep. Paul Bandy (R-Aztec) said the proposals really are the same and he’s confident the differences can be worked out. Rep. Lucky Varela (D-Santa Fe) did not share that confidence and even asked what would happen if no formula was approved. Varela also declared that HED collaboration with institutions “needs to get a heck of a lot better.”
The subcommittee will take the LFC recommendation as the base for its work, but wants analysts from both sides to work on narrowing the differences and report back by mid-week.
Health Sciences Center
UNM Health Sciences Center Chancellor Paul Roth made it easy on the committee, declaring that HSC funding does not go through the formula. HSC is seeking money to expand a health care workforce that faces a severe shortage with the implementation of the Affordable Care Act.
Everybody comes back Wednesday when the higher education budget proposals go before Senate Finance.