Del Mar College is among those asking Texas to change community college funding. Here's why.

The team of business and educational leaders tasked with rethinking community college finance in Texas has a plan to rework the funding model to better meet workforce needs.

The Texas Commission on Community College Finance has spent the past year working on a set of recommendations to propose to the Legislature. On Tuesday, the commission finalized its work and tasked the Texas Higher Education Coordinating Board with putting together a final report focused on an outcome-based funding model.

On the commission were two representatives of Del Mar College, board of regents Chair Carol Scott and college President and CEO Mark Escamilla.

If lawmakers enact the recommendations during the legislative session this spring, it would reflect a significant investment into the state's community colleges. The new model would tie funding to measurable outcomes, such as credential completions, instead of enrollment.

"I'm very hopeful and optimistic that a significant change will occur that ultimately will benefit community college students and their families like never before," Escamilla said.

During the Tuesday meeting, the commission also moved to add a recommendation that the Legislature give the commissioner of higher education the discretion to react quickly in response to any unintended consequences that might harm some community colleges, acknowledging the significant nature of the proposed changes.

"This is what's needing to be done today for the state of Texas and to secure the future of our students, our population and our great state," state Sen. Larry Taylor, R-Friendswood, said during the meeting. "We've got to have this educated workforce, and the most efficient, effective way to do that is through our community colleges."

How does community college funding work?

Currently, community colleges are competing against one another for students and funding, Escamilla said. If the changes go into effect, colleges would instead be competing against themselves, working to improve student outcomes.

"It will stabilize all colleges and give us more security as we move forward, fiscally speaking," Escamilla said, speaking on behalf of community colleges across the state.

Community colleges are funded by local property taxes, student tuition and state funding. The formula allocates 79% of state funds based on their relative share of contact hours, which is based on enrollment, and 17% based on outcomes, in addition to a 4% base of core funding.

But because a large portion of this funding is based on measures relative to other colleges, an individual college might increase enrollments but still receive less state funding under the current model, according to the commission's report.

In fiscal year 2022, Del Mar College saw an increase in state funding as the college increased contact hours at a faster rate than other community colleges. In 2022, state appropriations made up 15.56% of Del Mar College's operating fund revenues, while property taxes made up 54.44% of revenues.

What are the recommended changes?

The new model would instead base a majority of the funding on outcomes. The goal is to incentivize colleges to offer valuable credentials to help meet workforce needs, ensure that colleges with lower property values have the resources they need to serve students and recognize the additional costs related to serving disadvantaged students and adult learners who often require extra support and flexibility.

Fixed dollar amounts would be tied to outcomes such as the number of degrees, certificates and other credentials awarded; the number of students completing dual credit courses; the number of students who transfer to four-year universities; and the amount of credits awarded in high-demand fields. The commission recommends incentives specifically for outcomes for disadvantaged students.

In addition to the outcome-based funding model, the recommendations focus on affordability and college capacity.

The commission is calling for increased funding for Texas Educational Opportunity Grants, financial aid for dual credit for economically disadvantaged students and expanded partnerships among colleges and private employers to provide paid work-based learning opportunities. This year, the need-based TEOG program is only projected to serve 28% of eligible students.

As Del Mar College serves "largely first-generation students, academically disadvantaged, economically disadvantaged students and returning adults — when the state is focusing on that, to make it affordable for those students, Del Mar College would do well under that scenario," Escamilla said.

At Del Mar College, these initiatives would provide a significant boost, Escamilla said, particularly for students of need.

Also recommended are seed grants for programs in high-demand fields, support for stronger inter-institutional partnerships and updated state policies to fund and integrate non-credit credential programs with credit-bearing programs.

These continuing education programs can allow students to pick up new skills, get a foothold into an industry and boost their income through a quick, short-term program. The plan put forward by the commission would ensure that if a student completes that type of program, such as welding, and decides to pursue an associate degree, the program would count toward a degree.

Implementing all of the changes would amount to an additional $600 million to $650 million. In the conclusion of the commission's report, the goals are characterized as both "aspirational and achievable."

"I'm confident that our report recommendations, if implemented, will transform workforce education in our state and deliver better jobs with higher incomes and an improved quality of life for our state," commission Chairman Woody Hunt said during the meeting.

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This article originally appeared on Corpus Christi Caller Times: Del Mar College joins calls for Texas to change community college funding