There are two models that determine higher education funding in the state of Arkansas. The state uses a Need-Based Model in tandem with a Performance Based Model. The Arkansas Department of Higher Education (ADHE) is tasked with making recommendations to state lawmakers regarding budgets of public institutions of higher education. The Arkansas Higher Education Coordinating Board (AHECB) recommends the budgets and personal services to the State Legislature as outlined in the budget recommendation manuals. At its October 27, 2017 meeting, the AHECB approved the productivity funding model policies for the two-year colleges and universities. The policies were developed in conjunction with presidents and chancellors after meetings and revisions. The AHECB shall use the productivity-based funding model as the mechanism for recommending funding for applicable state-supported institutions of higher education. According to A.C.A. §6-61-234, the productivity-based funding model shall not determine the funding needs of special units such as a medical school, division of agriculture, or system offices. These special units are known as non-formula entities and ADHE staff reviewed justification requests submitted by the non-formula entities and prepared funding recommendations for Fiscal Year 2018-19 based upon those requests. Among this year's recommendations are: (1) For the universities, an increase in funding is recommended for those institutions with productivity increases for a total change in university funding of $5,495,145; (2) For the two-year colleges, an increase in funding is recommended for those institutions with productivity increases for a total change in two-year college funding of $1,938,134; (3) For the non-formula entities, the recommendation is for a 1.8% increase based on the HEPI index and a recommendation of full funding of Operations and Program Enhancement requests which combined would require an additional $21.6 million, of which $5.5 million would be for the University of Arkansas for Medical Sciences (UAMS); and (4) The total funding recommendation for 2019-20 for Colleges and Universities is $7,433,279 in new revenue with $6,571,728 of that being redistributed from one time incentive funds. The total recommendation for 2019-2020 for the Non-Formula Entities is $21,601,175 in new revenue. [For the 2018-2019 Operating Recommendations, see ED596355.]