It appears as though the Texas state legislature will adopt outcomes-based funding for the state’s 50 community colleges. The proposal was contingent on the legislature adopting a budget that would provide an additional $430M over two years for community colleges. Last Friday, the legislature approved that spending.
Right now, the community colleges support the new approach to funding, but once the state implements the system, it will be up to the community colleges to produce the outcomes the state wants to see. Fundable outcomes include associate degrees; transfers to four year universities after earning at least 15 credits; dual enrollment for high school students; and enrollment in workforce development programs.
Texas’s version of outcomes-based funding would provide an average of $4.3M per college each year. The money won’t be apportioned that way, however. The Texas Higher Education Coordinating Board will determine the funds’ distribution.
One element of outcomes-based funding that community colleges like is their ability to determine how much state funding they will receive based on their performance. Since the Texas state legislature budgets on a two-year cycle, community colleges will be better able to plan their annual budgets. Although outcomes-based funding sounds good, has the real potential to produce very different results than those the community colleges hope for.
Using data collected by the National Student Clearinghouse, Texas community colleges graduated or transferred 62.8% of the Fall 2016 cohort. That means 37.2% of those who started taking classes in Fall 2016 are no longer enrolled, did not transfer to a university or other institution, or did not complete a degree. Under the new system, that puts nearly 40% of an institution’s theoretical maximum state funding at risk.
Outcomes-based funding probably doesn’t mean more higher education cash
That means any increase in state funding will likely need to pay for additional student support, recruitment campaigns, transfer programs, and other “fundable” activities. It will not fund new program development, instruction, infrastructure improvements, and the like. Those activities will likely need to draw funding from existing sources.
The real danger here for community colleges is that other states will adopt outcomes-based funding. This comes at a time when the federal government has already indicated that it will adopt a type of performance based funding in the form of new “gainful employment” rules. Funding agencies are taking aim at community colleges because they clearly think the public should be getting more for its money.
The extra funding that the Texas legislature isn’t “just what the doctor ordered” for community colleges; rather, it’s just enough rope to hang themselves.
Photo Credit: Jerzy Durczak, via Flickr
