For nearly four years, governors and state legislators have focused on little else in higher education but cutting budgets to deal with historic gaps in revenue. Now, with higher-education support at a 25-year low, lawmakers are considering some policy changes that have been off-limits in the past, such as consolidating campuses and eliminating governing boards. Such proposals reflect the reality that, in most states, money for higher education will be constrained for the foreseeable future. Systems in Georgia and New York have already taken the unusual step of combining campuses under a single president. Other states, such as Ohio, are talking about giving institutions more freedom from state regulations, although for college administrators there is a trade-off: They would get more flexibility but even less state money. On the agenda in many statehouses this year will be bills that would tie higher-education appropriations to the completion rates of students at public colleges. Such performance-based models, which have had a mixed record in recent decades, are again popular with lawmakers trying to squeeze the most out of every tax dollar and to reward colleges that are more efficient at producing graduates. Legislators are not demanding that colleges be more cost-efficient just to reduce spending on higher education--they also want to keep colleges affordable for students. One state that has moved aggressively toward performance-based financing in recent years is Indiana. Five percent, or about $61-million, of the state's higher-education appropriation is based on a variety of performance measures, including credit-hour completion, the number of low-income students who graduate from an institution, and the number who earn degrees in science, technology, engineering, or mathematics, the so-called STEM fields. A state panel is now considering whether to increase the share of money awarded through such benchmarks to 6 percent of the state's appropriations for higher education.