1

Oregon Community College Distribution

Formula

2

What is the Distribution Formula? The method the State Board of Education and

CCWD use to allocate state funds for general education programs to Oregon’s community colleges

Governing principles in ORS 341.626

Policy and procedures in OAR 589-002-0100 (http://arcweb.sos.state.or.us/rules/OARS_500/OAR_589/589_002.html)

3

Objectives and Principles

4

Distribution Formula Objectives The State Board of Education’s commitment to access

and equity Student-centered; equitable support Investment focuses on the student; funds follow the student

Maintain high levels of service to current students Avoid consequences negatively impacting students’ access to

services

Long-term predictability and stability Provide colleges with reasonable stability and predictability,

particularly when resources are uncertain Formula is sustainable; review/alteration of formula focused on

refinement

5

Six Principles of the Formula

1. An expectation that equalization will be achieved in six years.

2. Significant additional funds in a biennium compared to the previous biennium will benefit every college. The State Board of Education will determine what level is significant on a biennial basis.

3. Historic share of total public resources will be based on the immediate previous year for every year, with the exception of 2005-06. For 2005-06, historic share of public resources will be based on the average of 2003-04 and 2004-05.

4. Buffered FTE will be used in the formula. The buffering is accomplished by using a three-year weighted average.

5. If significant additional resources are available compared to the previous biennium, equalization can go faster. The State Board of Education will determine what level is significant on a biennial basis.

6. The resource level available compared to the previous biennium may impact the pace of progress toward equalization.

6

Formula Overview

7

Formula Components Total Available 2007-09 =$494,524,220.00 Categorical funding comes off the top

Department of Corrections ($1.6 million) Contracts Out-of-District (COD) ($0.44 million) Distributed Learning ($1.4 million) SBE Strategic Fund ($5.0 million {1% of total})Total $8.4 million

Remainder goes into the Distribution Formula Base (Basic district operations) Projected Property Taxes CCSF Available for Formula Distribution Reimbursable FTE Harm LimitTotal $486.1 million

8

Total Public Resources

General Fund + Property Taxes = Total Public Resources (TPR)

The formula considers 100% of the next year’s projected property tax revenue and the current General Fund appropriation when determining how resources are distributed.

Property taxes are not redistributed. They are only used as a formula input. Property tax projections are provided by the Oregon Department of

Administrative Services.

9

CCSF Funding Diagram: Total Public Resources

Equity Add Lever 4.4%

Equity43.5%

Historical Add Lever 4.4%

Historical43.5%

Base 3.1%

Categorical 1.1%

Equity Add Lever 4.4%

Equity57.3%

Historical Add Lever 4.4%

Historical29.7%

Base 3.1%

Categorical 1.1%

Equity Add Lever 0.0%

Equity79.7%

Historical Add Lever 0.0%

Historical15.9%

Base 3.3%

Categorical 1.0%

Equity Add Lever 0.0%

Equity95.8%

Historical Add Lever 0.0%

Historical0.0%

Base 3.2%

Categorical 1.0%

Fiscal Year 2007-08($378 Million Total)

Fiscal Year 2008-09($379 Million Total)

Fiscal Year 2009-10($358 Million Total)

Fiscal Year 2010-11($366 Million Total)

Harm Limit Lever 0.0005% Harm Limit Lever 0.0001% Harm Limit Lever 0.0% Harm Limit Lever 0.0%

Footnote: Assumes 2009-11 CCSF at $450.5 million and Strategic Fund at 1.0%

10

Total Public Resources (in thousands)

Formula Funding $362.5

Base $11.7

Categorical $4.1

Formula Funding $363.3

Base $11.7

Categorical $4.3

Formula Funding $343.0

Base $11.7

Categorical $3.7

Formula Funding $350.6

Base $11.7

Categorical $3.8

Fiscal Year 2007-08 Fiscal Year 2008-09 Fiscal Year 2009-10 Fiscal Year 2010-2011

Total $378.4 million Total $379.4 million Total $358.5 million Total $366.1 million

2007-09 BienniumTotal Public Resources: $757.7 million

CCSF Appropriation: $500.0 million

2009-11 BienniumTotal Public Resources: $724.6 million

CCSF Appropriation: $450.5 million

11

CCSF Formula Funding – Net Change of Funding Through the 2009-11 Biennium (Fiscal Year 2009 to Fiscal

Year 2011) Example at Appropriation Level for 2009-11 = $423 million and Harm Limit @ 5.0%

College

Net Change in Funding

2009-11 Biennium

% of Net Change in Funding 2009-11

Biennium

Net Change in Funding 2009-11

Biennium

% of Net Change in Funding 2009-11

Biennium

% due to FTE

% Change due to

Apprpriation Level

% Change Due to Move

Towards Equalization

% Harm Limit

Blue Mountain (631,903) -6.7% (631,903) -7.3% 2.5% -7.4% -2.4% 0.0%Central Oregon (2,225,976) -12.4% (2,224,194) -12.9% 3.9% -7.4% -9.4% 0.0%Chemeketa (2,469,290) -5.4% (2,469,290) -5.5% 2.1% -7.4% -0.3% 0.0%Clackamas (3,773,297) -11.6% (3,773,297) -11.9% -1.7% -7.4% -2.7% 0.0%Clatsop (942,495) -14.0% (942,495) -15.8% -1.3% -7.4% -7.2% 0.0%Columbia Gorge (629,360) -12.5% (635,443) -15.0% -0.3% -7.4% -7.2% 0.0%Klamath (352,838) -5.6% (352,838) -6.4% -1.4% -7.4% 2.4% 0.0%Lane (3,204,414) -6.9% (3,204,414) -7.0% -1.6% -7.4% 1.9% 0.0%Linn Benton (1,562,849) -5.7% (1,562,849) -5.8% -0.4% -7.4% 1.9% 0.0%Mt. Hood (1,760,752) -4.9% (1,760,752) -5.0% -0.5% -7.4% 2.9% 0.0%Oregon Coast (85,089) -3.6% (88,986) -5.1% 0.0% -7.4% 2.3% 0.0%Portland (5,220,257) -5.5% (5,220,257) -5.5% -0.1% -7.4% 1.9% 0.0%Rogue (2,014,535) -10.7% (2,012,753) -11.1% 0.2% -7.4% -3.9% 0.0%Southwestern Oregon (1,325,877) -10.0% (1,325,877) -10.5% -1.1% -7.4% -2.0% 0.0%Tillamook Bay 69,657 3.8% 60,748 4.9% 4.3% -7.4% 8.0% 0.0%Treasure Valley (684,105) -8.4% (636,915) -8.5% -0.6% -7.4% -0.6% 0.0%Umpqua (843,169) -5.6% (841,387) -5.9% 0.4% -7.4% 1.1% 0.0%Total (27,656,550) -7.2% (27,622,903) -7.4% 0.0% -7.4% 0.0% 0.0%

TRP With Base TPR Without Base

12

Reimbursable FTE

13

Reimbursable FTE

Reimbursable FTE is defined by state law Reimbursable FTE includes in-state and border

state FTE (border states are Idaho, California, Nevada & Washington)

1 FTE = 510 contact hours for three quarters (Contracts Out of District FTE excluded)

Reimbursable courses are:

O Career Technical Education (CTE), o Lower Division Collegiate (LDC)O Postsecondary Remedial (PSR), o Adult Basic Skills (ABS)o Adult High School Diploma (AHSD) o Health/Safety/Workforce Development

FTE

14

History of Reimbursable FTE

97,55096,027

96,38996,027

88,837

96,027

87,659

96,027

86,611

93,151

85,366

90,523 89,705

86,427

75,000

80,000

85,000

90,000

95,000

100,000

01-02 02-03 03-04 04-05 05-06 06-07 07-08

Actual FTE Funding Formula FTE (frozen 02-03 to 04-05)

FTE

15

Weighted and Buffered Funding Formula FTE

Weighted Average FTE for 2007-08 Funding

40% of 2006-07 FTE

30% of 2005-06 FTE

30% of 2004-05 FTE

Funding Formula FTE for 2007-08 Funding Year: (85,366*40%) + (86,611*30%) + (87,659*30%) = 86,427

16

Reimbursable FTE

  2003-4 2004-5 2005-06 2006-07 2007-08

BMCC 1,973.15 2,014.93 1,912.44 1,909.49 2,072.39

Statewide Total 88,837.03 87,659.07 86,611.23 85,366 89,708.38

BMCC % of Statewide Total 2.2% 2.3% 2.2% 2.2% 2.3%

Source: OCCURS, 2008

17

Formula Mechanics

18

The BaseIncreases stability and predictability of funding for individual colleges and provides funding for basic district operations.

2007-08 FTE calculation $600 per FTE up to 1,100 $300 per unrealized FTE if do not reach 1,100

2007-08 FTE size adjustment (small school factor) Multiply FTE by size adjustment (1.1347 for BMCC)

BMCC: Base = $660,000 * 1.1347 = $748,902

19

BMCC Non-Base Total Public Resources per FTE

(Total Public Resources – Base) / FTE

BMCC Actuals for 2007-08: Total Public Resources = $9,129,045.62

(GF = $5,409,753.62; Property Taxes = $3,719,292.00)

Base = $748,902.00

Weighted Funding Formula FTE = 1,942.01

($9,129,045.62 - $748,902.00) / 1,942.01

= $4,315 per FTE for BMCC

20

Harm LimitPrevents loss >X% of non-base Total Public Resources due to

equalization

Does not limit losses due to changes in: FTE enrollment, changes in the General Fund appropriation, or changes in public resources.

Determined by combining: a) the percent change in total public resources from one year to the next b) adjustment percent determined by the State Board of Education each year

 

Percent Change in Total Public Resources from

FY08

Adjustment Determined by State Board of

Education

TOTAL Harm Limit (% Change in TPR + SBE

Adjustment)

FY08 12.93% -8.58% 4.35%

21

Formula Development and Maintenance

The actual formula mechanics were developed with substantial input and review from Community College expertise.

The formula is institutionalized in a spreadsheet which is well documented and changes receive peer review.

22

2009-11 Essential Budget LevelGovernor’s Recommended BudgetThe EBL for the CCSF is based on: Standard inflation factor (2.8%)

This is provided by the Office of Economic Analysis and represents the Gross Domestic Product Implicit Price Deflator. The factor is multiplied by the total 2007-09 revenue the colleges receive from the State appropriation ($500.0 M) and property tax ($247.0 M). This results in an increase of $20.9 M.

Estimated growth in property taxProperty tax is estimated by the Legislative Revenue Office at $267.7 M for 2009-11 which is an increase of $20.7 M from 2007-09.

Calculation of CCSF 2009-11 EBL:Base Budget (current biennium) $500.0 MStandard Inflation (2.8%) $20.9 MProperty Tax Growth (8.4%) ($20.7 M) CCSF EBL $500.2 M

23

2009-11 Essential Budget LevelCommunity College Revenue Forecast Committee

DAS Recommendation based on the Executive OrderEstimate percent of General Operating Revenue spent on:

Personal Services categories. Salary growth uses K-12 growth factors until college data develops. PERS blended rate. Health benefits growth used in K-12 model.

Materials & Supplies and Capital Outlay. Standard inflation factor used by state agencies (2.8%).

Calculate separate growth factors for each category (salary, insurance, PERS, Materials & Supplies, etc).

Combine into a single weighted growth factor based on the proportion of each category to the whole (5.92%). This factor is applied to the sum of the revenue received from the State appropriation, tuition and property taxes.

Tuition rate increase limited to growth in median family income.

24

2009-11 Essential Budget Level Community College Revenue Forecast Committee

DAS Proposal for CCSF 2009-11 EBL:

Base Budget (current biennium) $500.0 M

Weighted Growth Factor (5.92%)$64.4 M

Tuition Growth ($24.3 M)

Property Tax Growth ($20.7 M)

CCSF EBL $519.4 M