Allocation of a lump sum appropriation among seven colleges and universities in a single system can often be a source of wide dissention. Institutions in Oregon have achieved consensus on a budget allocation model that rests on recent advances in cost analysis. The model allocates funds on an equal basis for each major discipline and by level of…

New Jersey abandoned formula funding of higher education in favor of incentive funding combined with base budgeting. State institutions receive basic operating funds and compete for extra monies by planning initiatives for problems on which state leaders want more action. Incentive funding has cost little and improved quality noticeably. (MSE)