TCC expects new law linking state aid to student outcomes could lead to big funding boost

Tarrant County College Chancellor Elva LeBlanc expects a new Texas law overhauling community college finance will prepare the future workforce.

TCC will see an estimated $5 million in additional state funding for the 2023-24 school year as a result of House Bill 8. The law, which goes into effect Sept. 1, ties the amount of state dollars a community college receives to student outcomes. TCC administrators anticipate higher state aid in the future because of its approach to getting students into careers quicker.

“We’re all in,” LeBlanc told the Fort Worth Report.

TCC plans to focus on the number of students earning credits and certifications to meet the state’s workforce demands, supporting them in transferring to four-year universities and assisting high schoolers complete dual credit courses.

The community college expects to receive about $64 million in state funding for outcomes this year under the new formula, according to the Texas Higher Education Coordinating Board. In 2022, the college received $58.9 million.

While the increase is not drastic, TCC will receive more funding from the state once student outcomes improve.

“The first year, we will come out about even,” LeBlanc said. “We are optimistic that in the future years, we will do better.”

The old funding system was driven by the amount of time a student spent enrolled at a community college, said Renzo Soto, policy adviser at Texas 2036, a nonpartisan public policy think tank.

More state funding, lower property tax rate

In the past two decades, TCC’s state funding increased by almost $20 million. But state aid has declined as a percentage of TCC’s total revenue.

That inverse relationship has put a burden on taxpayers, which LeBlanc said HB 8 will relieve.

In fiscal year 2021, local property taxes constitute most of TCC’s funding, the highest out of all 50 community colleges in Texas, according to Texas Higher Education Coordinating Board.

The TCC board of trustees is set to consider approving its lowest property tax rate in 20 years. The owners of a home valued at $500,000 or below will save $13.36 in property taxes to TCC.

HB 8 also adds to TCC a program that funds free dual credit courses to high school students from low-income families. The college currently has about 60% of dual-credit students from low-income families, LeBlanc said.

For every student eligible for the program, the college also will receive $55 per credit hour on top of the funding boost.

The new funding system and estimated 2024 budget will allow free dual credit courses to all students, which LeBlanc said may increase interest in attendance.

“You increase the number of dual enrollment students, you’re going to ultimately increase the number of students completing the outcomes that will provide funding,” she said.

The state also will support TCC through a grant tuition assistance program for students.

TCC hopes to have an estimate of its HB 8-fueled funding boost by October because the state is finalizing calculations, LeBlanc said. While the community college had received the same amount of funding every two years in the past decade, the chancellor expects the dollar amount will be different between 2024 and 2025.

Credentials of value

The heart of the new funding formula is about assisting students in getting a credential of value, said Ray Martinez, president and CEO of the Texas Association of Community Colleges.

Courses with or without credits can all be eligible for a credential of value, which are degrees, certificates or licenses that help people find jobs.

Short-term credentials also qualify. They allow employed people to go back to college for a short semester to learn additional skills.

TCC will receive over $38 million to support students in achieving credentials of value, LeBlanc said.

Community colleges now will focus on aligning program offerings to the needs of their local workforce to increase the number of credentials of value, Martinez said.

“As long as they lead to a return on investment for the student who obtains that credential, these are going to be valued and funded through state revenue, at least in part,” he said.

Filling workforce gaps

For about 50 years, statewide community colleges, including TCC, had received state funding based on enrollment numbers. HB 8, signed into law by Gov. Greg Abbott in June, will give community colleges more than $650 million in new funding.

“House Bill 8 represents a truly historic and transformative change to the funding model for our community colleges,” Martinez said.

Previously, the state aimed to have 60% of Texans achieve a post-secondary degree or certificate in 2030. But with the new funding model, the state wants 60% of residents to achieve a credential of value, Texas 2036’s Soto said.

“There’s gonna be way more attention from the community colleges to make sure that students are aware of the range of options that are available to them,” he said.

Between 2021 and 2036, Texas expects to add another four million jobs. Most will be middle-skill jobs, which will require more than a high school diploma but less than a four-year degree.

A July 2022 report from the Texas Commission on Community College shows that 54% of jobs in Texas are considered middle-skill. However, only 45% of Texans are sufficiently trained for these types of jobs.

That leaves a 9-percentage point middle-skills gap of roughly 1.4 million Texans.

“There’s just a mismatch between our skilled talent labor force and the needs that employers are putting out there,” Soto said.

Community colleges can fill in this gap, Martinez said.

Widespread support

Most of the groundwork for HB 8 started in 2021, Soto said.

Conversations between multiple parties, from statewide community colleges to the Texas Higher Education Coordinator Board, had been in place to ensure putting the policy into action went as smoothly as possible, he said.

A lot of the efforts to improve outcomes have already been offered by statewide community colleges, Martinez said.

Even though HB 8 completely reformed a 50-year-old system, the law received practically unanimous support from legislators, state agencies, public policy experts and all statewide community colleges, Soto said. A Texas 2036 survey found widespread public support for the community college finance overhaul.

“I have not seen an education reform package this large passed with such almost resounding unanimous support,” Soto said.

‘A more concerted effort’

LeBlanc doesn’t expect many changes in the fall semester other than an increasing number of dual enrollment students for spring 2024.

Dual credit completion is one of four metrics determining outcomes for community colleges. The metric rewards students who complete 15 hours of dual credits that align with the requirements of either an academic program leading to a degree or an industry-level certification.

“For several years, we have been doing things that impact student outcomes and ultimately impact how we are funded in a positive way,” the TCC chancellor said.

TCC will also offer online courses for early high school students this semester, LeBlanc said.

TCC has met with school districts to address dual enrollment and early college opportunities, she said. The community college also worked with high school counselors to meet the needs of students and teachers, help students adjust to a college environment and work with parents to ensure a student’s success.

Increasing dual credit enrollment numbers means TCC also will take extra steps to increase the support for educators who teach class, LeBlanc said.

“Students are going to see probably a more concerted effort from community colleges to make sure that they’re completing their education within their own timeframe,” Soto said.

TCC will not reinvent how it operates. Instead, it will focus on tweaking and ensuring that faculty members and administrators will target outcomes, which the college was already heading toward, TCC board Vice President Kenneth Barr said.

The new funding formula will pressure TCC to track students’ success and ensure that graduates have good careers, Barr said.

“I’m optimistic that it’s going to strengthen community colleges across the state, and it’ll be beneficial to TCC,” he said.

Dang Le is a reporting fellow for the Fort Worth Report. Contact him at dang.le@fortworthreport.org or via Twitter. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.