A proposed performance-driven funding formula for Texas community college districts will benefit students and the economy, according to El Paso education leaders familiar with the proposal.

The 88th Texas Legislature will consider the recommendations from the Texas Commission on Community College Finance (TCCCF) during its next session, which begins in January. This will be the first time in almost 50 years that the funding process may be revamped.

The commission suggests that most of the state’s funding should be based on measurable outcomes that align with the needs of regional and state workforces. These include degrees or certifications that will lead students to additional education or greater earnings. The plan includes adjustments to pay for additional education for students who need remedial support or for older students who want to be reskilled or up-skilled.

The plan’s foundational funding is augmented by more student financial aid, seed grants to help colleges build programs in high-demand fields, and support for shared services between college districts. The proposal also includes paid internships, and promotes short-term industry-recognized certifications.

The TCCCF expects that a more educated population will draw new jobs and investments that will help hundreds of thousands of students and employers, as well as the state.

El Paso Community College President William Serrata said he was familiar with the commission’s plan, and he is excited about its prospects.

“I think they came up with a great product,” said Serrata, chairman of the Texas Association of Community Colleges (TACC) executive committee. The association, which represents the state’s 50 community college districts, requested in 2021 that the legislature overhaul the existing funding process. “We’re certainly pleased with it.”

Serrata said it was too early to predict how the plan could affect EPCC’s portion of state funds, but added the college would not see a decrease in its appropriation share.

EPCC’s fiscal year 2023 budget is $153 million and 21% of it will come from state appropriations compared to the 72% of the budget in 1984, Serrata said. The college, established in 1969 and opened three years later, enrolled 24,203 students in fall 2022.

The 12-member commission, made up of state legislators, policy experts and community college leaders, studied the funding issue and found a need to invest in workforce education, especially post-secondary credentials. Examples of post-secondary credentials that EPCC offers include welding and Cisco Networking Training where people can design, build and maintain up to medium-sized networks. Gov. Greg Abbott appointed El Paso businessman Woody Hunt to lead the commission.

“To solve these challenges, being incremental is not enough,” Hunt said in a letter to legislators that accompanied the commission’s report. “We need to be bold.”

In his letter, Hunt stressed that the new college district funding model needed to be strategic, aligned with the emerging workforce needs, and based on strong collaborations with the state.

“Our commission believes the new funding model must do three things: reward colleges for positive outcomes, especially in credential completion and transfer, ensure equitable access through financial aid, and help community colleges increase capacity to meet rapidly changing workforce needs,” Hunt said.

State and college leaders believe that these recommendations will build value in two-year degrees and credentials and boost student populations that dropped during the pandemic.

A June story in BestColleges reported that U.S. community colleges have experienced a decline of 21%, or 372,000 full-time students, since spring 2020. The same story stated that part-time student enrollment numbers also declined.

A 2020 Strada Gallup Education Consumer Survey found that previously enrolled students decided not to return because of cost, lack of confidence in their ability to succeed academically, and uncertainties with degree choice and the job market. It also found that a third of students surveyed who had not earned a degree thought a college degree was not worth the cost.

Serrata said that EPCC has focused on student outcomes and a faster time to degree/certificate completion for years. Some of the college’s more successful certification programs are in the high-demand automotive technology and health care fields. He suggested the college may consider additional credentials for those who want to be commercial drivers, and potential programs for electric vehicle maintenance, construction management, data analysis, hydraulics and logistics, as well as EKG technicians and occupational therapy assistants.

“Credentials are going to matter even more as we go forward,” said Serrata, who said up to 70% of all new jobs by 2030 will require some post-secondary education.

Jahaira Gonzalez said she found value in the two-year EPCC automotive technology credential she earned this summer. She used it to help start a mobile general auto service business with her husband, who earned his associate of applied science degree in auto technology from EPCC in 2020.

Gonzalez said higher education has allowed them to start a successful business that is paying for their Horizon City home. She said they plan to open a brick-and-mortar shop to augment their mobile enterprise.

“(The credential and degree) definitely were worth the money,” Gonzalez said. “They’re paying for themselves.”

Officials familiar with the commission’s plan estimate that it could cost up to $650 million, but the state’s $27 billion general revenue surplus should cover it.

“I’m confident that the state has the resources to make this historic investment in community colleges,” said Jacob Fraire, former president and CEO of the TACC who now serves as director of policy and strategy with the University of Texas at El Paso’s Diana Natalicio Institute for Hispanic Student Success.

Fraire said he and the TACC board understood that the existing formula was confusing and unsustainable.

The current formula is based on contact hours that involves the number of students enrolled and the number of courses that those students take, but despite appropriation increases, some college districts received less money regardless of student enrollment figures. College districts get most of their money from tuition and fees, state appropriations and local property taxes. In the last legislative session, the state allocated $2.17 billion for the districts for the biennium.

Fraire called the commission’s report an important first step with many forward-thinking, transformative recommendations, but said it will now be up to the Legislature to decide on how to optimize and capitalize on the commission’s proposals.

Serrata said if state lawmakers fast-track this proposal, it could be implemented in time for the fall 2023 semester.