State Performance Funding

FY 2023-24 is the seventh year the Kentucky General Assembly has used performance funding models to allocate state appropriations to the public universities and the Kentucky Community and Technical College System (KCTCS). There is a model for the eight public universities and a separate model for KCTCS’ colleges. The performance funding model for the public universities is based on 11 metrics primarily focused on student success such as bachelor’s degrees produced, earned student credit hours, and undergraduate student progression. The competitive-based model rewards universities with rates of growth that exceed the sector average.

UK has achieved the highest number of growth rates above the sector average for every year the model has been in use. In fact, UK is responsible for the majority, and in some instances all, of the growth in the number of bachelor’s degrees awarded by the system.

SOURCES AND ALLOCATIONS

Since its inception, the Performance Funding Model has been used to allocate the Postsecondary Education Performance Pool to the public universities. Funding of the Postsecondary Education Performance Pool has varied over the years. From FY 2017-18 to FY 2020-21, approximately 11 percent of the public universities’ base state appropriations, or $103.4 million, was reallocated to the Postsecondary Education Performance Pool. For these first four years, the General Assembly did not appropriate any additional funds to the performance funding pool. For FY 2021-22, the General Assembly appropriated $13.5 million of new state funds to the performance funding pool for the universities and did not require any institutional matching contributions. Effective with these new funds, the annual allocations from the pool to the universities are non-recurring. 

For FY 2022-23, the General Assembly placed $75.8 million of state funds in the performance funding pool for the universities, including the $13.5 million from the prior year. Given that the General Assembly did not add any new funding to the performance funding pool and that the annual allocations are non-recurring, once again there is $75.8 million available for allocation to the universities for FY 2023-24. 

In April 2023, CPE ran the performance funding model for FY 2023-24 and UK achieved growth rates above the sector average on nine of the 11 metrics. As a result, UK’s share of the $75.8 million performance funding pool increased by $2.4 million to $33.3 million compared to the prior year.