Commission Calls for Complete Overhaul of Community College Funding System

Last week, the Texas Commission on Community College Finance (CCCF) unanimously approved its recommendations to the Texas Legislature that legislators tie state funding to community colleges’ success in graduating students or helping them transfer to four-year universities. 

CCCF was established by the Legislature in the previous legislative session to make recommendations “regarding the state funding formula and funding levels for public junior colleges” with the goal of improving student outcomes and sustaining the state’s community college system long-term. 

Community colleges in Texas are funded by local property taxes, student tuition, and the state. State funding has lagged behind other sources of funding and now accounts for less than a quarter of Texas community college funding. 

Unlike K-12 public schools, state funding to community colleges comes entirely from general state revenue,   in a lump sum set at the discretion of the Legislature, rather than a formula set by statute. Because of this funding model, community colleges are not guaranteed a certain level of state funding and are instead forced to compete against each other for a pot of state funding distributed based on a formula.

Student enrollment is the primary input to the current formula for distributing state community college funds. Between Fall 2019 and Fall 2021, community colleges saw an 11% decline in enrollment, likely due to COVID-19 pandemic. These declines weren’t uniformly proportional across the state, so some systems were more heavily affected than others and were granted a smaller portion of state funding. This enrollment decline highlighted the inadequacies in the current community college funding system and prompted the Legislature to create CCCF.

CCCF recommends that the Legislature make state community college funding guaranteed and foundational, more in line with how Texas K-12 public school districts are funded. Instead of each college competing for the same pot of money, colleges would be guaranteed certain amounts of funding based on several inputs.

CCCF recommended that funding be primarily based on “measurable outcomes,” including graduation rates and transfers to four-year universities. The commission also suggested making adjustments for students who would cost more to educate, including low-income and academically underprepared students. As it stands, the plan would provide baseline funding based on enrollment, operational costs, and course offerings.

While guaranteeing foundational funding is a significant improvement on the current system, it is unclear what effect the focus on outcomes will have. In the K-12 public school system, outcomes-based funding has created inequities in school funding, as already struggling schools are effectively punished, making it harder for them to improve. It is unclear how students would be affected if community colleges are financially incentivized to graduate or transfer their students as soon as possible.    

Apart from outcomes-based funding, the CCCF suggested that state funding be granted to districts that do not have an adequate property tax base to fund their schools. The CCCF proposal lacks specificity on exact dollar amounts but recommends that the state invest more in the community college system overall.       

In addition to the funding recommendations, CCCF addresses community college affordability and capacity concerns. CCCF recommends that the state increase financial aid to community college students and provide grants to schools offering courses that meet workforce needs.

In response to the recommendations, Austin Community College AFT president David Albert emphasized the importance of fully funding community colleges.

“If we’re going to provide the highest quality education and pay our community college employees properly, the state has to increase contributions to community colleges. The future of our state relies on a high quality higher education system. Students, especially those who do not come from wealth, rely on our community colleges.”  

ACC AFT is one of two Texas Locals representing community college employees, the other being AFT-Lone Star College.