Performance Funding in Louisiana: A Policy Analysis of the Granting Resources and Autonomies for Diplomas Act of 2010

Abstract

Performance funding, the automatic and formulaic association of specific resources to institutional results on designated indicators, grew out of the accountability movement in higher education that originated in the 1950s and 1960s and redefined itself as the “new accountability” in the 1990s. To date, much of the literature on performance funding has been descriptive, prescriptive, and anecdotal, at best, with very little empirical evidence that performance funding is effective in impacting institutional performance. While recently some researchers reported on multivariate, multi-state analyses, findings continue to be mixed.

The 1974 Louisiana Constitution empowered the Louisiana Board of Regents to develop a funding formula for higher education with three main formula components, an example of a performance funding 1.0 program, which was finally incorporated into the Master Plan for Public Postsecondary Education (Louisiana Board of Regents 2001, 2012). The Louisiana Granting Resources and Autonomies for Diplomas Act of 2010 (GRAD Act) as amended in 2011 (Louisiana Granting Resources and Autonomies for Diplomas Act, 2011), an example of a performance funding 2.0 program, provided four performance objectives and related specific targeted measures. Finally, Act 462 (Louisiana Legislature, 2014) called for the development of a new comprehensive outcomes-based funding formula that ensures the optimal allocation of state appropriated funds to public postsecondary educational institutions. That formula, approved by the Board of Regents in December 2015, was implemented in the 2017 fiscal year.

This study describes institutional efforts and changes in policies/initiatives implemented at select four-year, public institutions in Louisiana as a result of the GRAD Act. The study discusses, from a policy perspective, whether or not the GRAD Act as a performance funding policy achieved its stated goal of increasing “the overall effectiveness and efficiency of state public institutions by providing that the institutions achieve specific, measureable performance objectives aimed at improving college completion and at meeting the state’s current and future workforce and economic development needs” (Louisiana Granting Resources and Autonomies for Diplomas Act, 2010, pp. 1–2). Unintended consequences of the Act are also noted. The study could inform future changes to Louisiana higher education performance funding models.