Performance Funding

Fiscal Year 2018 marks a transformative period of accountability efforts for postsecondary education in the Commonwealth. Kentucky joined a growing majority of states which have adopted a performance based funding program to formally link state appropriations with desired student success goals and other objectives for postsecondary education. The passage of House Bill 303 by the 2016 Session of the Kentucky General Assembly allocated five percent of Fiscal Year 2017-18 state funds for most of Kentucky’s public colleges and universities to a Postsecondary Education Performance Fund.

The model’s specific components which are used to allocate performance funds include:

Monies placed in the Performance Fund will be distributed to the institutions based on competitive performance using 11 metrics categorized in the various components. Each metric is weighted to recognize differences in missions and cost structures between the research universities and the comprehensive universities based on FY 2016-17 funding levels. In addition, each metric is measured by averaging the most recent three years of finalized data.
As reflected in House Bill 303, five percent of UK’s state appropriations, or 
$13,351,400, was placed in the Postsecondary Education Performance Fund for FY 2017-18 along with funds from most of the other public universities as well. Pursuant to the model, UK is to receive $13,411,800 from the Performance Fund in FY 2017-18, or $60,400 more than contributed. In the future, the Kentucky General Assembly may allocate new state funds and/or up to 100 percent of the institutions’ existing state funds to the Postsecondary Education Performance Fund for distribution based on the performance funding model. State funds are net of state supported debt service and mandated programs.