Katy Edition | November 2022

The Texas Commission on Community College Finance was created in 2021 with the intention of changing the state funding formula for community colleges. STATE FUNDING Shiftin

HCC REVENUE

While the largest portion of Houston Community College funding is from taxes, it receives a portion of its revenue from state funding, which has varied since 2017.

$4.7M 1.3%

$7.4M 2.1%

$159.1M 45.7%

1.4% $4.8M

KEY

State funds Property taxes Student tuition Other local income Fund balance

$68.1M 19.5%

$154.3M

19.6% $68.1M

44.1%

$350M

$348.3M

$115.5M

2019-20

2018-19

33%

33.4% $116.3M

$2.5M

$4.6M 1.2%

$12.8M

$9.3M 2.5%

$21M 5.7%

$5M 1.4%

WHAT COULD CHANGE?

3.5%

$66.5M

$161.6M 44.2%

$161.8M 43.9%

$181.9M

$63.6M 17.1%

$68.7M 18.8%

$371.5M

$365.8M

18%

$368.9M

49%

The commission is advocating to change funding mechanisms to reward colleges for performance in three areas: Credentials of value

2020-21

2021-22

2022-23

$102.5M

$123.2M 33.4%

$121.2M 33.1%

27.6%

SOURCE: HOUSTON COMMUNITY COLLEGECOMMUNITY IMPACT

NOTE: SOME PERCENTAGES MY NOT EQUAL 100% DUE TO ROUNDING

• degrees and certicates • workforce training

studies at the University of Houston, said community colleges have traditionally been underfunded com- pared to four-year universities. “We’re trying to design an eective outcome-based funding model that incentivizes institutions in the right way to improve student success but also doesn’t penalize them,” he said. HCC will receive 17.1% of its total rev- enue from the state, 27.6% from tuition and 49% from local taxes in FY 2022-23. State funding will total $63.6 million for FY 2022-23, a 4.4% decline from the prior year due to declining enrollment, HCC ocials said. Meanwhile, dual-credit reimburse- ments would allow HCC to maintain lower tuition, HCC Executive Director of Financial Aid JoEllen Price said. This comes as HCC’ tuition is $2,541 per 15 credit hours in the 2022-23 school year, per the Texas Higher Education Coordinating Board. Programmatic benets Of the recommendations, Price said she is most excited about the potential for outcome-based funding for creden- tials of value as HCC oers short-term

because we look at it as an access issue for students.” Outcome-based funding Community colleges receive $1.3 million annually with additional fund- ing available based on factors such as the number of student contact hours, or hours of scheduled instruc- tion, according to information from Dallas-based nonprot Texas 2036. HCC, which has a Katy campus, has seen a decrease in its student head- count systemwide, dropping from 88,228 in 2013 to 83,034 in 2020, per HCC data. Budget documents show tuition rev- enue declined after scal year 2019-20, dropping from $115.5 million to about $102.5 million for FY 2022-23, indicat- ing fewer students enrolled. A Sept. 12 presentation from the Texas Commission on Community Col- lege Finance stated there is demand to align funding with three outcomes: credentials of value, credentials in high-demand elds and transfer success. Lyle McKinney, associate professor of educational leadership and policy

CONTINUED FROM 1

Credentials in high-demand elds

Commission on Community College Finance, which was appointed by the state in 2021 and is overseeing the pro- posed changes, indicates 65% of 5,000 respondents to a July and August sur- vey by the Texas Higher Education Coordinating Board are in favor of changing the state funding to be out- come based. HCC Chancellor Cesar Maldonado said it is too early to tell how the rec- ommendations will impact college nances. However, HCC does expect an increase in funding. “In our internal models, we’re plug- ging numbers in, and we do see a dif- ference—an increase in funding—but it’s going to be contingent on what the award amount is per degree,” he said. Houston Community College System ocials said they hope there will be a tangible benet in its dual-credit pro- gram, for which the recommendations may cost the college $6 million less per year, Maldonado said. “That is a number that is very, very real for us,” he said. “One of the rea- sons we waive tuition [in dual credit] is

• vary by local economy

Transfer success to four-year universities

Considering THE PROPOSED CHANGES The Texas Commission on Community College Finance meets every other month to discuss recommended changes for the next legislative session.

Texas Commission on Community College Finance established 88th Texas Legislature begins; legislation can be discussed 88th Texas Legislature ends New state funding could be distributed if changes are approved

MAY 2021

JAN. 2023

MAY 2023

FALL 2023

SOURCES: LONE STAR COLLEGE SYSTEM, TEXAS COMMISSION ON COMMUNITY COLLEGE FINANCE COMMUNITY IMPACT

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