Community College Formula Funding: A Policy Analysis Framework

Abstract

In 1940 V.0. Key asked the basic budget-design question, what basis shall it be decided to allocate X dollars to activity 'A' instead of activity 'B'? The question makes it clear that budgeting is a decision-making system involving a process, and an output of a value choice in the form of a resource allocation. But, what budgeting system will emerge as community colleges enter the late 1980s? The budget processes of our individual states provide different answers on both values and methodology to Key's question. This article does not attempt to answer the question, but does suggest a policy analysis framework that may be useful for both the practitioner and researcher reviewing funding approaches among community college. Policy options are clearly the high-profile factor in most funding debates. Yet, the understanding and clarification of the decision process can be assisted through the use of formative evaluation criteria to evaluate the impacts of the suggested change in allocation technique. The most frequent public higher education financing approach to provide state dollars to public institutions is formula funding. This is especially true at the community college level, where the formula procedure is applied to a little over two-thirds of the states (Wattenbarger and Mercer, 1985). With so many states using some form of formula funding, however, a significant area of analysis is how this allocation process in particular is being modified to address emerging policy options.