By Anthony Hennen and Richard Vedder, Ph.D.

Summary

As part of Governor Kasich’s Higher Education plan, appropriations will remain at $2.37 billion for FY2014 and will increase to $2.42 billion in FY2015. In-state undergraduate tuition and general fees will be capped at two percent increase over charges from the previous academic year or two percent “of the statewide average cost, by sector.” However, most notably, the Governor’s plan will make a degree completion a major factor—50 percent—in determining total university funding from the State Share of Instruction (SSI). The plan also ends a redistributive mechanism that reduced university allocations for each fiscal year in order to help mitigate financial losses for low-performing institutions and eliminates several earmarks for community colleges and regional campuses. Meanwhile, 25 percent of the SSI funds for community and technical colleges will be distributed based on course completions, not enrollments.

This report finds that the shift from enrollment to degree completion represents a commendable, yet modest plan. The plan marks a step toward improving universities’ awareness of campus performance and achieves progress in transparency and accountability. The plan presents the Higher Education system with much needed, and previously non-existing, pressure to become more efficient. Yet the potential for lowering of standards across the board and grade inflation remain legitimate concerns, making it essential that incentives are properly aligned and the funding model remains accessible and open to revision. Ultimately, the plan continues to fund institutions and not individuals. Thus, while it will likely improve the public education system in Ohio, there remain numerous bold actions on the table that could be pursued in the hope of transforming it more comprehensively for the 21st Century.

Click here to download the full report: Ohio's Higher Education Budget: A Commendable If Modest Action Plan