A plan to link college and university performance to the amount of money institutions receive from the state cleared its first hurdle Wednesday when it passed without issue through the state Senate Education Committee.

Senate Bill 117 sponsored by Sen. Conrad Appel, R-Metairie, would create a task force to study the best way to revamp the state’s funding formula — the mechanism that determines how public colleges and universities are funded.

Appel’s plan comes as the Louisiana Board of Regents, the state’s top higher education panel, is angling to get the Legislature to relinquish its historically tight grip on tuition-setting authority.

Higher education officials have argued they need more flexibility to set tuition as state funding has declined nearly $650 million over the past five years.

Louisiana is next to the bottom nationwide in funding two-year schools and last in funding four-year schools. At the same time, Louisiana keeps tuition at some of the lowest rates in the nation.

Both Gov. Bobby Jindal and Appel, the chairman of the Senate Education Committee, have said they would support giving tuition-setting control to the management boards overseeing colleges and universities if schools would first agree to higher performance standards and some oversight from the Legislature.

Appel acknowledged that the state doesn’t fund higher education at a high level — spending about $12,700 per student versus the $14,000 Southern average.

But he said the state also has a “performance problem” that legislators can address in the short term.

“Clearly, there is a linkage between funding and performance, but I don’t believe it’s a total or complete linkage,” Appel said. “We’re bringing a bill that we’ve been working on for 12 months. It is our best effort in changing the expectations of what we in Louisiana want to see ... we can address the performance side today.”

Appel said his outcomes-based funding model would be an extension of the 2010 La GRAD Act, which ties 15 percent of schools’ funding to performance.

The law also allows schools to raise tuition 10 percent each year provided they meet certain performance targets.

Appel’s loosely outlined proposal calls for institutions to be grouped into tiers and then judged against their peers.

For instance, LSU would be grouped as a research-based flagship university similar to the University of Alabama or the University of Georgia. Under the plan, LSU’s funding would be contingent on meeting or exceeding the graduation and retention rates of those comparable schools.

Appel said he also would like to see schools address the “quality” of degrees, meaning putting greater emphasis on graduating students in high-demand fields such as the so-called STEM fields — science, technology, engineering and math.

“Certain degrees create greater expectations of lifelong earnings for students,” Appel said. “We want an emphasis on degrees with greater wealth-building opportunities for our students.”

SB117 would create a 15-member task force made up of leaders in higher education, business, economic development and two gubernatorial appointees.

They would start meeting in September and produce a final report on Jan. 15.

Rep. Steve Carter, R-Baton Rouge and chairman of the House Education Committee, is pushing a similar bill in the state House of Representatives.

“This is a tremendous start to ensure that every youngster in the state gets a quality education,” Carter said.

Any changes recommended by the task force would fall upon the Regents to enact.

A companion piece of legislation, Senate Bill 118, also sponsored by Appel, says that funds would flow to schools based on an updated outcomes-based funding formula crafted by the Regents.

State Commissioner of Higher Education Jim Purcell said he’s looking forward to having a conversation with legislators about tweaks to the state’s funding formula.

He said the current formula already covers a lot of what Appel’s bill seeks to do, including placing considerations on research, economic development and the STEM fields.

“We’re not opposed to another conversation about how the formula works,” Purcell said. “This should be a continuation of our work to maximize the success of students.”

The bill now moves to the Senate floor for debate.