New Jersey Assembly Bill A376

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Directs Secretary of Higher Education to establish performance-based funding plans for public institutions of higher education.

Impact

This legislation establishes a systematic approach to state funding by tying a portion of state operating aid to institutional performance. This would gradually implement a performance-based model starting from fiscal year 2019, wherein 5% of state funding would be contingent upon performance metrics, increasing annually up to 25% by fiscal year 2023. By doing so, it introduces a proactive measure to ensure that state resources are directed to institutions that demonstrate a commitment to improving student progress and graduation rates. A provision ensuring that no institution faces more than a 2% reduction in state funding compared to the previous fiscal year offers some security during the transition to this new funding model.

Summary

Assembly Bill A376 directs the Secretary of Higher Education in New Jersey to develop performance-based funding plans for public institutions of higher education. The primary objective of these plans is to enhance accountability, increase efficiency, and improve student outcomes across these institutions. The Secretary is tasked with creating distinct funding strategies for both county colleges and four-year public institutions and may consider a separate plan for public research institutions if deemed necessary. The bill emphasizes collaboration with various stakeholders, including institutional governing boards, business representatives, and faculty organizations, to ensure that funding allocation is based on clearly established performance metrics.

Contention

The bill outlines specific performance measures for assessing institutional effectiveness, such as credit completion rates, job placement statistics, and progress in reducing achievement gaps among diverse student groups. However, the implementation of performance-based funding may evoke concerns regarding its potential to disadvantage institutions serving higher populations of low-income or minority students, who may face additional barriers to completion. Critics argue that an over-reliance on standardized performance metrics might overlook the unique challenges that vary across different institutions, particularly among county colleges and community colleges that are focused on providing accessible education.