No dollars for dummies

Have you ever bought an appliance only to return home and discover it does not work as expected? Caveat emptor, maybe. But in the sophisticated capitalism to which we aspire there ought to be some quality control. We’re willing to bet that you brought that failed gadget back to the department store and returned it.

The issue you had with our proverbial waffle iron or panini press was its performance; you were unwilling to pay good money for an unsatisfactory product. The principle applies across the board in efficient consumer culture and it should hold for public expenditure, too.

Indeed that is what Governor Cuomo and SUNY Chancellor Zimpher are trying to achieve with performance-based funding of SUNY schools. The proposal is still taking shape and currently extremely approximate, but its central thrust is to bind a small percentage of university funding—as low as one-twentieth—to a school’s success measured on a few objective variables, such as retention, graduation rates or enrollment. Incentives make the world go round; economists do not chirp this birdsong because it is wrong, but indeed because it is right. Performance-based funding is the rational, desirable next phase of bringing the efficiency of the market to public expenditure.

So why such a cacophony of whining about tying a small percentage of SUNY funding to university performance? Because two species of public servant find performance-based funding objectionable: those who fear it will be done poorly and those who create the inefficiency it is designed combat. The former must be persuaded; the latter must be eviscerated.

No one should doubt that incentivized-funding could be botched. It is a tool, a mere scalpel in the surgical theatre. As such, the implementation matters: we could use it to remove a cancer or to nick a major artery. This is an idea worth executing correctly or not all.

In that pursuit, the money tied to performance ought to be new money. It would be unfair to budget schools the same dole as they have already received at a suddenly higher price. Risk requires reward, and if the SUNY schools shall gamble on this idea, then they need to be brought along with the carrot rather than the stick.

Furthermore the indicators need to be objective and well-chosen. Every statistic that glitters is not gold; just because something can be measured does not mean it is connected to the public university’s mission: to efficiently instill knowledge at an affordable cost. Every meter stick must necessarily be correlated to that mission in order that the desired effect be achieved. There is even some heft to the idea that schools be allowed to select which measures they shall be evaluated on. This permits a school to grow toward its own goals, provided it simply grow.

These assurances should silence the first type of objector; the remaining chorus of complainers has identified themselves as the second, inexcusable set. Their day is soon at hand. Whether they be the doddering old liberals or the entitled state workers, those who invite inefficiency in, those who hide behind the bureaucracy are no part of the solution and should not be allowed to stay its hand. Those cancers who stand in the way of progress should not be surprised when they are excised.