At its April 25, 2008 meeting, the Arkansas Higher Education Coordinating Board approved the funding models for the two-year colleges, universities, and the technical centers (former technical institutes merged with universities). These models had been developed in conjunction with presidents and chancellors after meetings and revisions. The funding models were used to develop the comparative needs of Arkansas institutions of higher education in terms of the average funding levels of schools in the SREB (Southern Regional Education Board) region. The legislative session in 2010 will be the first "fiscal" session of the legislature in which they will consider primarily appropriations. As a result of annual legislative session, there have been changes in the recommendation process that the ADHE (Arkansas Department of Higher Education) staff must follow. The difference between the funding model determined needs of the entities for Fiscal 2011 and the Fiscal 2010 appropriations was $169.9 million, a 20.8% percent increase. The funding gap (the difference between the formula determined need and the current fiscal year appropriation) is part of a phenomenon that occurs when there is an extended economic downturn which is invariably accompanied by enrollment increases, declining state support and tuition increases which are necessary to cover the loss of state support. It should be emphasized that the funding needs of the institutions are the funds needed to bring Arkansas higher education closer to the average funding level of the SREB region. The operating recommendations include: (1) funds necessary to provide the state's share of a 2.3% COLA for all unrestricted educational and general staff; additional non-formula funds for Arkansas State University's Delta Heritage Centers ($2.1 million), UALR-RAPS Nano-Technology Centers ($2.3 million), and the ADTEC (Arkansas Delta Training and Education Consortium), ADWIRED (Arkansas Delta Workforce Innovations for Regional Development) and the Crossroads Coalition ($3.2 million), and UAPB's Land Grant matching funds ($0.5 million). (2) The 2.3% COLA for all unrestricted educational and general salaries represents a cost of approximately $27.8 million of which the state's portion is approximately $12 million. The recommendation summaries in (Table 1A) represent a 1.6% increase for colleges, a 1.5% increase for universities, a 5.2% increase for nonformula entities and a 1.5% increase for the technical centers for fiscal 2011. (Contains 8 tables.) [For Volume 2, see ED511330.]