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Lawmakers approve additional $5 million in ‘equalization funds’ for state universities

By CAROLINE BECK, Alabama Daily News

MONTGOMERY, Ala. – A special committee of Alabama lawmakers approved $5 million in funding for state universities this week. The funds are part of a higher education “equalization fund” offering some universities who felt slighted by state appropriations in this year’s education budget.

Auburn University, Athens State University, Jacksonville State University, the University of South Alabama, the University of Montevallo and Troy University will all receive additional allocations from the Alabama Commission on Higher Education (ACHE) calculations.

During this year’s legislative session, state lawmakers approved a record $7.1 billion education budget that contained at least five percent increases for each of the state’s universities. However, some schools got significantly higher increases, leaving some institutions and their local lawmakers unhappy with the new “peer gap adjustment” formula adopted by ACHE.

The dust up led to lawmakers creating an “equalization fund” to be dispersed to universities by a specially-appointed committee later in the year. That panel met Wednesday.

Sen. Arthur Orr, R-Decatur, who chairs the Senate education budget committee, said the allocations approved on Wednesday would help make universities whole after contentious budget negotiations in the 2019 legislative session.

“With this effort, the schools that felt like they were short changed in that original process could go back to ACHE and say they disagree with their formula and explain why,” Orr told ADN.

Auburn will receive the most extra funds at $1.1 million, followed by South Alabama who will receive $539,999 and Jacksonville State who will get $458,731.

Troy will receive an extra $390,174, Athens State  will get an extra $163,913 and Montevallo University will see an extra $78,404.

After those funding disbursements, more than $2 million was left over in the equalization fund. Those funds will be pro-rated and dispersed to all state universities based on each school’s portion of the higher education budget.

Rep. Bill Poole, R-Tuscaloosa, who chairs the House education budget committee, said that he was happy the left-over funds were distributed.

“I think it’s wise to not allow those residual funds to just be carried over,” Poole said during the meeting. “We could have just carried forward those funds but I’m pleased to see those funds reaching higher ed, and reach those institutions to be put to better use.”

The equalization funding was based on comparisons of funding at other schools across the nation with similar missions, student bodies and degree production.

This “peer gap adjustment” formula was part of Gov. Kay Ivey’s education budget proposal and represented about half a percent of higher education funding.

Orr said that factors like how other state’s choose to fund their universities were not being considered when looking at the allocation formula for Alabama’s universities, which then led to skewed numbers.

ACHE Executive Director Jim Purrcell said earlier this year that they plan on continuing the additional funding in future budgets for universities that have been underfunded.

Several lawmakers have agreed that, historically, higher education funding has been based less on need and more on a school’s ability to lobby in Montgomery.

Purcell also said funding since the recession hasn’t kept up with enrollment at some universities.

Of the 14 public universities, six have seen enrollment declines since 2009, according to ACHE. They are Alabama State University, Athens State University, Auburn University Montgomery, Jacksonville State University, Troy University and the University of Montevallo.

Some lawmakers want to go beyond peer-review to a system where at least some state funding is based on universities’ performances, including graduation rates.

Higher education looks to fix ‘egregious inequities’ in funding for some universities

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