Texas’ community colleges should be funded based on how many students graduate or transfer to four-year universities, according to a proposal outlined to lawmakers on Monday.
Community colleges have long depended on local property taxes, student tuition and fees to cover the majority of their costs. State funding offsets less than 25% and has not kept up with rapidly changing needs, officials say.
So Texas should overhaul how it funds them and include additional funding to reflect the higher costs of educating and supporting students from low-income families, those who came from academically disadvantaged backgrounds and working-age adults who need to reskill to remain competitive, a draft from the Texas Commission on Community College Finance reads.
“This new model would allow the colleges to focus on improving their own outcomes, rather than competing with other colleges for limited funding,” Woody Hunt, the commission’s chairman and an El Paso businessman, said at a Monday meeting.
The group — which includes college officials, business leaders and lawmakers — spent the past year exploring how to bolster and sustain the state’s funding for such schools.
The group presented its draft recommendations, which will be considered during next year’s legislative session, during a meeting of the commission.
Basing state funding for the state’s 50 community college districts on measurable outcomes will allow them to better predict how much money they will receive, said Renzo Soto, a policy advisor at the Texas 2036 think tank.
“There is a lot of support for all of the recommendations,” Soto said.
Two-thirds of 5,000 people surveyed support basing community college funding on student outcomes, according to a statewide poll conducted by the Texas Higher Education Coordinating Board.
Hunt added that Texas’ competitiveness “is increasingly dependent on our post secondary completion.”
“Our colleges must have resources that allow them to efficiently provide education and training programs to quickly adjust their offerings to meet the changing workforce needs of the region,” he said.
The commission also recommended a state-funded guaranteed yield for colleges with low taxable valuations or those unable to generate sufficient local funding.
“This lack of resources puts these colleges’ students at a disadvantage in the state workforce, while also negatively impacting local communities’ abilities to grow their regional economies,” the draft reads.
Harrison Keller, Texas’ commissioner of higher education, said that preliminary calculations show that the changes would require lawmakers to devote about $650 million in additional funding toward community colleges for the biennium.
The commission’s final report on the finance system is due in November.
Many local leaders supported the commission’s proposal, including Collin College President Neil Matkin and Dallas College Chancellor Justin Lonon.
It “will further encourage community colleges to invest in programs to meet growing workforce demands across the state,” Collin College spokesperson Marisela Cadena-Smith said in an email.
Lonon said in a statement that he’s pleased with the “earn-and-learn” approach emphasized by the commission.
”We welcome funding priorities that reflect the higher cost of educating low-income, first generation college students, so that students most in need of a job can actually work while they study,” he added.
Low-income students have historically been less likely to participate in and complete postsecondary credentials, a challenge further exacerbated by the COVID-19 pandemic as many delayed or decided against enrolling in college.
To tackle this, the commission recommended lawmakers invest in need-based student financial aid and establish a state goal so that at least 70% of qualified students at public two- and four-year institutions receive such funds.
This year, the Texas Educational Opportunity Grant Program is projected to only support about 28% of eligible students, leading many eligible students to not enroll in college or take on large amounts of debt.
“Ultimately, every additional dollar Texas invests in our community colleges can translate into greater opportunities across the state,” the draft concludes.
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