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Three years after Texas reinvented how community colleges earn state funding to reward them for getting more students to graduation, the schools are delivering.
But now the colleges are short the millions they planned to receive as their successes outpaced what state lawmakers budgeted.
Officials with the Texas Higher Education Coordinating Board are scrambling to adjust the funding formula. During Wednesday’s board meeting, they will discuss a proposal to trim the state incentives that prompt more dollars.
Some colleges could see massive drops in state dollars in fiscal year 2027 as THECB officials tweak funding to stay within budget.
Nearly a dozen colleges would see state funding drop from the prior year by at least 15%, according to funding projections based on the proposed change. Three of those — the Texarkana, Navarro and McLennan community college systems — would be hit the hardest, with projected drops of at least 20%.
Paris Junior College president Stephen Benson wrote an editorial this month urging the state to close the gap between the money community colleges earned and the money they will receive. The East Texas junior college could see a drop in funding of $1.4 million at a time when its enrollment increased by 20%.
“Successful colleges should not be penalized for exceeding expectations,” Benson wrote. “The timing couldn’t be worse. PJC is serving record numbers of students, expanding workforce programs, strengthening partnerships with school districts and employers, and producing outstanding student outcomes.”
THECB officials did not immediately respond to requests for comment about the funding concerns.
State lawmakers approved a revamped funding formula for community colleges in 2023 with near unanimous support to get more students ready for the workforce. House Bill 8 gives colleges money primarily based on how many students complete industry certificates or associate’s degrees, transfer to universities or participate in dual credit. Bonuses are given based on educating high-need students, including those who are economically and academically disadvantaged as well as nontraditional adult learners.
Community college advocates celebrated the move away from a static, enrollment-based funding and toward a dynamic one. But while the new formula opens the door for more money from the state, it also introduces uncertainty that can be difficult to plan budgets around.
The proposal THECB board members are considering would reduce the incentives that community colleges get for educating low-income students and adult learners, the very students who need to go to college the most.
That proposal has been met with backlash among some education advocates.
Jonathan Feinstein, the Texas state director of Education Trust, says the current funding weights recognize getting more vulnerable students to complete college requires extra resources.
“These high-need student groups — students from low-income families, students who maybe were not entirely prepared for college when they completed high school — are the ones who really stand to gain the most,” Feinstein said. “It does raise concern in terms of this being a precedent so early.”
THECB officials noted in the board’s agenda that lawmakers gave them the flexibility to make such changes to manage the financial impact of the new funding system.
Texas legislators approved a nearly $90 million supplementary budget request after community college exceeded expectations during the last biennium. THECB officials can put in a similar request this session.
Ray Martinez III, the president of the Texas Association of Community Colleges, said in a statement to The Tribune that his group was partnering with the coordinating board to ensure that funding “keeps pace with the results students and colleges have earned.”
Martinez added that community colleges outperforming funding predictions is evidence that HB 8 is a success.
“When the Legislature passed House Bill 8 in 2023, it made a generational commitment — a bold and deliberate policy decision to tie state funding to student outcomes rather than enrollment,” Martinez said. “Our colleges answered that challenge, made significant institutional investments, and delivered results that exceeded projections.”
The Texas Tribune partners with Open Campus on higher education coverage.
Disclosure: Open Campus and Texas Association of Community Colleges have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in The Texas Tribune’s journalism. Find a complete list of them here.
