Montana State University will receive $2.2 million, the largest share of the new pot of incentive money the 2013 Legislature created to reward state campuses that graduate more students and reduce dropouts.

The University of Montana will get $1.6 million, Tyler Trevor, deputy commissioner for planning and analysis, said Tuesday from the commissioner of higher education's office in Helena.

The Montana Board of Regents agenda for next week's meeting in Great Falls shows how $7.5 million in “performance-based” money will be divided up for the first time.

UM in Missoula will lose out on about $500,000 because its retention rate — the number of full-time freshmen who returned for their second year — slipped 1 percent in 2013 from its previous three-year average.

At MSU in Bozeman, the retention rate increased by 1.7 percent to 79.2 percent. MSU will be rewarded with $1 million for improving retention, while UM will get $595,382.

All 12 state campuses will get credit for graduating more students in 2013. MSU's graduation numbers increased by 91 students to 1,846, so it will be rewarded with $1.1 million. UM graduated four more students, increasing to 1,736, which will earn it $1 million.

When two-year colleges are added in, Trevor said, things even out between Bozeman and Missoula. MSU's Gallatin College will get just $63,140, compared to $526,095 for UM's Missoula College. While Gallatin College nearly doubled its number of graduates, its retention rate fell 17 percent. Missoula College improved both graduates and retention.

The Legislature set aside 5 percent of its funding for the Montana University System to be divided up between campuses based on how well they do in getting more students to graduate and lowering dropout rates.

The performance-based experiment is part of the College Affordability Plan lawmakers approved, which included enough money to allow pay raises for college employees and a tuition freeze for Montana students.

In the past, state funding has often been based on numbers of students enrolled, not how well students did once in college.

The Board of Regents embraced performance funding as a strategy to reach the governor's goal of increasing the portion of Montanans with some kind of post-high school degree or credential from 40 to 60 percent.

The 2014-2015 fiscal year, which starts July 1, is the first time money will be divided up using the performance system the regents approved last May.

Trevor said university leaders expect that future Legislatures will continue the system. A task force has been meeting for months to hammer out a better, long-term performance-measuring system, to be presented next May to the regents.

Bob Mokwa, MSU Faculty Senate chair, said $2.2 million will help MSU cope with growing enrollment. It's money the campus wouldn't have received otherwise, he said, because lawmakers OK'd adding $7.5 million to university budgets only because it was tied to performance.

Performance funding is a national trend, but some MSU professors are skeptical, concerned about the quality of education. The long-term performance system is expected to measure more factors, including things important to MSU like research and growth in graduate students, and quality-control measures, Mokwa said.

Here is how money will be divided for the 2015 fiscal year:

  • MSU Bozeman — $2.2 million.
  • UM Missoula — $1.6 million.
  • MSU Billings — $905,273.
  • Missoula College — $526,095.
  • Great Falls College — $414,031.
  • MSU Northern, Havre — $355,711.
  • UM Western, Dillon — $324,168.
  • MT Tech, Butte — $317,596.
  • City College, Billings — $277,005.
  • Highlands College, Butte — $156,574.
  • Helena College — $146,176.
  • Gallatin College — $63,140.

The complete list, including graduation and retention numbers, is online

Gail Schontzler can be reached at gails@dailychronicle.com.