Fiscal equity and the effects of changes in demographics on performance funding in the Florida Community College System, 2002--2006

With higher education costs rising faster than the Consumer Price Index, policymakers are concerned that costs will affect access to education. They are concerned that federal and state support may be unable to keep pace with rising costs. Parents and students are concerned about rising student fees. Higher education administrators are concerned about funding equity and quality of education.;The Spellings Commission Report of 2006 focused national attention on changing demographics and the need for higher education to educate citizens more effectively, especially minorities and other special populations. The Commission Report states that as higher earning, highly educated baby boomers reach retirement age, the workforce needed for continued U.S economic growth will require minorities and other populations to backfill high-skill positions being vacated by baby boomers. Currently, these special populations are least educated, lower earners, and smaller per capital tax payers. This issue is of grave concern.;Previous research studies in the State of Florida found declining equity in community college per-student FTE revenue distributions when performance funding is included. Only one of the previous findings was significant at the confidence level of 95%. This 2007 research study addresses questions of horizontal fiscal equal with performance funding included, excluded, and indexed to special population demographics in college service areas. This study found the following: (a) evidence of improving equity in 2005-06 owing to funding formula-driven equalization enhancements implemented that year, (b) overall declining equity for three of the equity statistic tests significant at the 95% confidence level when performance funding is included, and (c) that performance funding indexed to special populations in college service areas is not a complete solution to funding equity, but may warrant further research. The study also contributes to horizontal fiscal equity theory by shedding new light on the effects of calculating the Gini coefficient equity statistic with weighted full-time-equivalent student enrollment.