Two State Comparison Finance of Higher Education - Research Paper Example

About two-thirds of states allocate funds for education usually comprising from 10 to 12 percent of the state budget (NCSL 2010). In this work, I compared the Arkansas and Tennessee in their financing of higher education for possible lessons. Formula for state support to higher education. According to ADHE (2010, p. 3), A.C.A “establishes the process and key components for formula development for funding public institutions of higher education” that the State of Arkansas adopted. Based on ADHE (2010, p. 3), the content of the formula is the principle of providing “fair and equitable state support to all postsecondary students across the state, regardless of the state institution attended” while recognizing level requirements, equipment needs, unique missions, growth, economies of scale, and other factors.

In contrast, compared to Arkansas’ equity-based formula, the formula adopted by the State of Tennessee for funding higher education is outcome and performance-based. The TSBE (2011, p. 4) pointed this out very clearly when it emphasized a “productivity and efficiency through an outcomes-based funding formula” for higher education. The TSBE (2011 p. 5) reported that the outcomes based funding was approved for implementation since AY 2011-12 while the performance funding standard was approved for implementation since AY 2010-11.

Institutional winners. . Evaluating Tennessee’s progress on performance or outcome-based for higher education, however, may be too early because Tennessee has just begun their new policy. If outcomes and performance correlate with the income class of the student population, the likely winners in Tennessee will be the institutions catering to students from the rich. Conditions associated with state support for higher education. It follows from our discussion that the condition that should be associated for the state’s continuing support for higher education in Arkansas is that education should be extended especially to those disadvantaged by family income.

However, there is no data available in the documents reviewed by this work suggesting that such a condition was imposed on the schools receiving state support in Arkansas. It also follows that the condition that should be associated for the state’s continuing support for higher education in Tennessee is improvement in educational performance. However, similar to Arkansas, there is no data available in the documents reviewed by this work that such a condition was imposed in the schools for higher education in Tennessee.

Trend on state support for higher education in the last five years. According to the CSEP (2009c), the ten-year budget change in the appropriation of state tax funds for the operating budget of higher education in Arkansas has been a positive 54.3%; the two-year change was 9.3%; the five-year change was 28.6% although the one year change was a negative 0.4%. Given the two-year change in state spending for higher education at 9.3%, the percentage change for Arkansas State spending for community college spending rose by only 9.

0% between 2007 and 2009 (CESP 2009c). Nevertheless, based on