Governor approves performance-based funding for higher education 

Governor Josh Shapiro approved Senate Bill 1154 (SB 1154) on July 17, creating a Performance-based Funding Council along with other higher education reforms as part of the state budget for 2024-25. 

Shapiro approved the bill only days after the Republican-sponsored bill passed the Pennsylvania General Assembly following negotiations. The Performance-based Funding Council will develop metrics to distribute funds to Pitt, Penn State and Temple. The legislation states its purpose “to increase degree attainment, encourage affordability in higher education, meet workforce needs and grow the economy.”

Five voting members from the state government will sit on the council — the secretary of education, two appointed state senators and two appointed state representatives. Pitt, Penn State and Temple will each have one non-voting delegate sit on the council.

The council will have to submit its recommendations for how funds will be distributed to the recently formed State Board of Higher Education, the governor, the Department of Education and the General Assembly by Apr. 30, 2025, as stipulated by the bill.

After five years, the council will reconvene to evaluate the efficacy of the metrics. Some potential metrics that the council could consider include two- and four-year graduation rates, number of Pell grant recipients, student retention rates and post-graduation employment rates and salaries.

Chancellor Joan Gabel said Pitt is “very much in support” of developing performance-based funding at a Pennsylvania house budget hearing she appeared at in March. 

“Having been in systems in earlier parts of my career that have used performance-based metrics, the ones that have been the most functional, that have had the fewest unintended consequences, have been the ones that have been developed collaboratively,” Gabel said.

Those systems “represent the different types of institutions that are in the state — the different types of families, students, stakeholders in the state, the different goals of the state — and then come together to think about what it is that everybody wants to accomplish, and then move forward accordingly,” Gabel said.

The University repeated this sentiment in response to the approval of SB 1154.

“The University is very supportive of the Performance Based Funding Council charged with developing a new funding system for state-related universities,” University spokesperson Jared Stonesifer said. “Such performance benchmarks would increase accountability and transparency while creating pathways for increased state funding for Pitt.” 

In his budget proposal from March, Shapiro proposed creating a performance-based funding formula and increasing funding for state related schools by 5%. Despite his proposal, the state budget, which was passed in June, maintains Pitt’s state funding at the same level it’s been since 2019, continuing a trend of funding for state-related universities that fails to keep pace with inflation. 

State funding makes up about 6% of Pitt’s budget, allowing Pitt to offer reduced tuition to in-state students. Shortly after the state budget for 2024-25 was approved in June, Pitt trustees approved increased tuition for the 2024-25 school by 2% and 4% for in-state and out-of-state students, respectively.

Previously, House Republicans sought to limit Pitt’s access to state funding because of fetal tissue research. The dispute ended in 2022 when the Senate approved funding for Pitt and other state-related universities.

Shapiro approved the Performance-based Funding Council as a part of a package of higher education reform bills. Additional reforms detailed in a press release from the governor’s office include the creation of the State Board of Higher Education that will support the council, investments in community colleges and schools in the state system and over $120 million in increased funding for scholarships and grants.

“My Administration has made higher education a priority again, and this budget represents the first significant progress on higher education in 30 years,” Shapiro said in the press release. “It delivers real opportunity for our students and ensures that higher education will serve as an economic driver in this Commonwealth for generations to come.”