Getting Paid to Perform

In the annual sweepstakes for dollars in Sacramento, the California Community Colleges usually place a distant third behind the Cal State and University of California systems.

So the leaders of the 106 community colleges devised a new strategy to get more money: They offered to earn it.

How? By showing that more students are completing degrees or transferring to four-year universities. If they cannot demonstrate proof of some progress, then the money could disappear.

The idea appealed to former Gov. Pete Wilson, who rewarded community colleges two years ago with an extra $100 million in such incentive funding, called Partnership for Excellence.

Gov. Gray Davis, who also believes in making government agencies more accountable for the tax dollars they receive, increased last year’s supplemental funding to $145 million.

Now this idea of pay for performance is beginning to influence the way all of California’s public colleges and universities are funded.

Although Davis has been generous with UC and Cal State, he has begun to attach more strings to the money he lavishes on them. He’s negotiating to establish new performance-based funding mechanisms in those systems as well, although the details have not been worked out.

For now, performance-based funding seems to be the wave of the future in California, reflecting a nationwide trend. Wherever the idea has surfaced, in fact, it has proved to be hard to quash.

“It’s like arguing against motherhood and apple pie,” said Charlie FitzSimons, spokesman for the Commission on Higher Education in South Carolina, where performance-based funding was recently adopted. “When the Legislature says, ‘We want you to be accountable,’ you say politely, ‘Of course we will be.’ ”

So far, performance pay represents only a fraction of the community colleges’ budgets, but Partnership for Excellence remains a significant departure for a system that has always seen its funding tied to cost-of-living formulas and how many students it enrolls.

Internally, the performance-pay program has become one of the most controversial reforms in memory: a system of financial rewards and punishments aimed at coaxing districts toward new goals for student success.

Some of the program’s initial opponents now offer tempered praise, however, and community colleges Chancellor Thomas Nussbaum is pushing for $355 million to expand it.

At the same time, Nussbaum still faces critics who fault the program for weak controls and lack of rigorous measurements. Critics fear the program will pressure professors to inflate grades so that more students advance and induce colleges to fudge their numbers to meet the desired performance targets.

These targets or goals include increasing the number of students who complete courses, earn one- and two-year degrees and certificates, finish basic-skills, vocational and apprentice programs or transfer to four-year universities.

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So far, all of the targets are being met, except the number of students who transfer to universities.

Nussbaum said the goals have begun to shift the institutional culture to focus on results--as measured by student success.

But Bill Scroggins, former president of the college system’s Academic Senate, said Nussbaum might have underestimated the tendency for cash-strapped local districts to cover old debts or other expenses rather than funding programs to help more students get degrees or transfer.

The Academic Senate recently released a survey showing that some districts squandered their portion of the money to cover debt service, reserves, employee benefits, new carpeting--even travel budgets for administrators.

Such expenditures were permitted because there are few restrictions on how the money can be spent.

Although Partnership for Excellence boosters maintain that most colleges spend money the right way, they acknowledge that the goals are somewhat arbitrary, and there are no clear studies showing how best to achieve them. They also point out that the idea of yanking money from under-performing colleges could result in the troubled schools falling further behind.

Also, the program does not address more complex challenges of the community colleges--assuring ethnic diversity among transfer students, for example, or funding the higher cost of vocational programs.

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However, many educators say Partnership for Excellence has shown unexpected promise.

At its best, it has encouraged colleges to focus on students, college leaders say, rather than the procedural conflicts, personnel disputes and turf battles that often dominate campus politics.

Around the state, there are examples of how student success is taking precedence over competing bureaucratic needs. New tutors, counselors and faculty have been hired. Library hours have been expanded, transfer centers have been refurbished.

“It’s not a perfect world, but it’s a better world,” said Gilbert M. Dominguez, president of Imperial Valley College.

At Citrus College in Glendora, $400,000 of first-year Partnership for Excellence money paid for a new intensive elementary algebra course and math lab that offers one-on-one help. Although only 35% of the students complete some regular algebra classes at Citrus College, 58% passed the more intensive course.

Nussbaum believes successful results will become more apparent in the future and contends that expansion is crucial for the colleges to absorb the children of the baby boom generation about to reach college.

“The system is rolling up sleeves,” Nussbaum said, and getting down to work. If all goes as planned, it will show that the colleges use tax dollars wisely and thus deserve more money from Sacramento.

All this, of course, is a shrewd political strategy. It fits neatly into the new concept of “accountability,” a popular theme among governors and lawmakers across the country.

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Where plain old appeals for more money fail, education advocates are discovering that accountability succeeds.

Politicians are much more willing to support new investments in colleges and universities when they are dressed up as accountability programs, with performance standards attached.

Before launching Partnership for Excellence, Nussbaum said he and other community college leaders had been getting nowhere with pleas to state legislators to close the funding gap between California’s colleges and the national average.

California has the cheapest and leanest community college system in the country, in part because of the state’s low fees of $11 per unit.

The state spends $4,200 per community college student yearly, compared with the national average of $6,500 per student. Community colleges across the state also received considerably less funding per student than the Cal State and UC systems.

So Nussbaum volunteered his colleges for the experiment in performance funding, dragging initially reluctant faculty and administrators with him.

Although proposed Partnership for Excellence funding for next year falls $135 million short of the $300 million that Nussbaum wants, he still has succeeded in getting the colleges their first substantial infusion of new state funds in years.