HIGHER EDUCATION New ‘historic’ state law to reward community colleges for performance
REVERSING THE TREND
Since 1980, the state’s contribution to Texas’ 50 community colleges has been steadily declining, causing the institutions to rely more on property taxes and tuition. Officials are hopeful a new law passed in the 88th Legislature this year will provide a path to more state funding to meet workforce needs. Revenue breakdown of Texas community colleges over time
The old model HB 8 represents the first time the funding model for community col- leges in Texas has been significantly updated in 50 years, Lone Star Col- lege Chancellor Stephen Head said before his Aug. 1 retirement. LSC has eight colleges in the North Houston area, according to its website. As part of the Texas Commission on Community College Finance tasked with helping bring the bill forward, Head said for a long time “Community college financing has been an issue for more than a decade,” Head said. Along with not aligning every- one’s goals in a cohesive direction, he’s told state officials the old system was not sustainable. the old formula often punished smaller colleges—a system Head described as creating “haves and have-nots.” For example, many rural areas are losing their population to larger metro areas, Head said. That makes it difficult for smaller colleges in those places to keep their operations going as enrollment drops. The new model Beyond just helping all commu- nity colleges in Texas find sustain- able revenue, the goal of the new law is to drive more students into high-demand jobs. The law also has a newly placed emphasis on noncredit paths, Soto said. Those are paths that require certification but are not
BY JAMES T. NORMAN
Houston-area community college leaders are describing a new state law that transforms how their colleges receive funding from Texas as “groundbreaking” and “historic.” House Bill 8 will invest $683 million into the state’s com- munity colleges and incentivize them to help students earn more credits and certification in high-de- mand fields. The bill will also incentivize colleges to help students transfer to four-year universities and provide more funding to them for high schoolers who complete dual-credit courses through their institution, higher education officials said. It’s a shift away from the old model, which gives colleges money based on their enrollment and the number of hours they are in contact with students, officials said. The bill was signed into law by Gov. Greg Abbott in June and received majority support, said Renzo Soto, policy adviser at Texas 2036, a nonpartisan public policy think tank. “I have not seen a significant education reform package not only pass, but also move through the process, with this level of unified support,” Soto said. The goal for the new legislation is to help train Texas’ workforce to take high-demand jobs that require less than a bachelor’s degree but more than a high school diploma, Soto said.
State
Property taxes Tuition
100% 80% 60% 40% 20% 0%
1980 1985 1990 1995 2000 2005 2010 2015 2020
Jobs requiring middle skills or certification in Gulf Coast region Number of positions in 2020 Projected additional positions in 2030
47,000 9,000
Heavy-truck drivers
Medical assistants Licensed practical & vocational nurses
17,000
5,000
13,000
2,000
Heating, ventilating, air conditioning & refrigeration installers
1,000 8,000
SOURCES: GULF COAST WORKFORCE BOARD, TEXAS 2036/COMMUNITY IMPACT
Preschool teachers 7,000 2,000
standardized in the same way other degree programs might be, such as for truck drivers, electri- cians, and licensed practical and vocational nurses. Thanks to a new influx of money of $683 million paired with the bill, many colleges will receive a revenue boost for the 2023-24 school year to help deal with the transition, said Marshall Heins, chief financial officer and senior vice chancellor of finance and administration for Houston Community College.
What comes next The new funding system will go into effect in September—right at the start of the fall semester for colleges. The emergency rules were issued in July and expected to be approved in August, Soto said. Those rules will be in effect for one year and will be followed up with a more permanent set. Those are expected to be more thorough and go through a more rigorous process that includes public hearings.
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