A.C.A. §6-61-234 (Act 148 of 2017) directs the Arkansas Higher Education Coordinating Board (AHECB) to adopt polices developed by the Arkansas Division of Higher Education (ADHE) necessary to implement a productivity-based funding model for state-supported institutions of higher education. Productivity-based funding is a mechanism to align institutional funding with statewide priorities for higher education by incentivizing progress toward statewide goals. At the same time, such models encourage accountability to students and policymakers by focusing on the success of students through the achievement of their educational goals. 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. Among this year's recommendations presented in this report: (1) For the universities, an increase in funding is recommended for those institutions with productivity increases for a total change in university funding of $8,376,594; (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 $2,884,237; (3) For the non-formula entities, the recommendation is for a 2.5% increase based on the HEPI index and a recommendation of full funding of Operations and Program Enhancement requests which combined would require an additional $21.8 million, of which $2.4 million would be for the University of Arkansas for Medical Sciences (UAMS); and (4) The total funding recommendation for 2021-22 for Colleges and Universities is $11,260,831 in new revenue with $3,546,645 of that being redistributed from one time incentive funds. The total recommendation for 2021-2022 for the Non-Formula Entities is $21,760,579 in new revenue. [For the 2020-21 Operating Recommendations, see ED613770.]