An analysis of performance-based funding policies and recommendations for the Florida college system

Nearly 30 states have adopted or are transitioning to performance-based funding programs for community colleges that allocate funding based on institutional performance according to defined metrics. While embraced by state lawmakers and promoted by outside advocacy groups as a method to improve student outcomes, enhance accountability and ensure return on investment of public resources in higher education, limited research exists confirming the effectiveness of performance-based funding in meeting intended policy goals. The policy analysis examined performance-based funding programs administered in Florida as the status quo and Ohio as the policy alternative. Prompted by their Governors, both states recently developed new approaches to performance-based funding that move funding away from enrollment and tie substantial amounts to student outcomes. To provide a context for the policy analysis, the study chronicled the history of performance-based funding and accountability programs for higher education enacted by states and reviewed policymaking processes and influences. The study applied a multi-goal approach to compare the policy alternatives applied in each state. Although it is still too early to assess the effectiveness of the performance-based funding programs in both states, the review of both system and institutional level performance data and interviews with stakeholders in Ohio revealed little to no connection between the intended program goals and behaviors exhibited by colleges. Based on the study findings, policy recommendations were proposed to enhance the effectiveness of the performance-based funding program for the Florida College System.