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The House Appropriations Subcommittee on Article III and the House Higher Education committee met on March 24 to review the current funding formularies of community colleges and make recommendations for possible changes at the next legislative session.
 
Opening Remarks from Chairman Ashby
Made comments about the importance of the community funding formula charge and introduced guest members Representative Otto, Representative Darby, Representative Schubert, and Representative Phil Stephenson. Also reminded members of the importance to keep recommendations in mind.
 
Panel One
Emily Toensing, Legislative Budget Board

  • Several ways community colleges are funded
    • Local property tax
    • Tuition fee revenue
    • Formula funding – requested through the LAR
    • Doesn’t create entitlement
  • 3 funding components
    • Core operations – $1 million per district, $50 million total
    • Student Success Points – 10% of core, $196.8 million
    • Contact hour funding – 90% of core, $1.72 billion total
  • Each district receives $1 million for operational cost
  • Once core requirements are fulfilled, last 10% is given out to success points
  • 11 metrics of students achieving success points
  • Contact hours are given with remaining funds
  • Total formula funding decreased in 2013 due to decreased contact hours
  • Giddings – Was confused about the $1 million, if it is given to districts or institutions
    • LBB –  It’s for each district
  • Howard – Wanted clarification on how success points are calculated. A specific example was the outcomes based funding and if the 10% was a supplement or an addition
    • LBB – in the 2014-2015 biennium, the Association agreed on the 90-10 split. The 84th legislature decided to continue the 90-10 split but the contact hours decreased
  • Howard – Asked if the incentive money will be lowered depending on contact hours and if it enrollment rates are impacted by it
    • LBB – enrollment rates and incentive rates are affected by what the legislature wants to do
  • Howard – Commented on the importance of the committee’s competence in knowing how everything is being impacted when making recommendations
  • Turner – Asked for explanation in the decrease of funding from the last biennium until now.
    • LBB – the majority of formula funding is contact funding which accounts for face to face interactions of the student and teacher for at least an hour of instruction. Reporting hours have decreased significantly making funding smaller. Out of that 10% goes to success points
  • Turner – Asked what drove the decrease in contact hours.
    • LBB – There is an inverse relationship with the economy and enrollment of community colleges. The theory is when the economy is doing well less people enroll in school
  • Turner – Asked if there is also a corresponding decrease in staffing at community colleges in these situations
    • LBB – recommended asking the community college representatives
  • Ashby – Made comments reminding the board about the budget passed last legislative session.
    • Clardy – asked for clarification on one more slide. One slide said $1million was given per institution and then on another slide, only half of that money is reported
    • LBB – that’s half of the biennium.

 
Panel Two
Dr. Raymund Paredes, Director of the Higher Education Coordinating Board

  • Role of community colleges and critical to state’s future, all education, and the state’s commitment to the 60×30 plan
  • Community colleges work closely with college prep (dual credit), sponsor college prep high schools, and engage in secondary school
  • 70% of students achieving a Bachelor’s have logged community college hours
  • Community college provides a foundation for people getting their bachelor’s and continuing education
  • Community colleges serves as a critical link between high schools and higher education
  • Migration of students from universities to community colleges is due to convenience and cost savings
    • Economically disadvantaged students
    • Making the determination they can’t afford 4 years of college so purse two years of community college before transferring
  • Community colleges play a critical role in college readiness
  • Changes to dual credit programs in community colleges will take on increasing importance
    • virtually doing all of the work for high school students to complete college credit
  • Texas community colleges are a great value and providing affordable educational opportunities and it’s in Texas’s interests to help students receive educational opportunities
  • Reducing sources of funding to community colleges puts the burden on students, their families, and taxpayers
  • Tuition and fee revenue increases directly affect student enrollment
  • Texas community colleges rates are some of the lowest in the country
    • urgent to make sure community colleges remain affordable otherwise programs, schools, students, and economy will suffer
    • essential to economic well being of the state and achieving the 60x30TX goal
  • Student Success Points are:
    • students completing developmental education
    • go on to higher education
    • completion of degree or certificate
  • In April, Higher Education Board will meet to consider adopting a formula funding for the next biennium
    • Our recommendation is to increase funding to community colleges by 9%. Funding doesn’t go to the institutions automatically, it has to be earned
  • Zerwas – Asked how do we get to the 215 dollars
    • Parades – the cost of helping new students who’ve been distanced from educational settings is high. Most students are taking 90 hours to achieve a 60 hour degree. Needing more resources and advising for those students, and that’s calculate in the cost
  • Zerwas – Asked what makes up the new cost.
    • Paredes – It’s to increase advising, tutoring, quality of software like in writing labs, etc.
  • Zerwas – Commented on how success points generally have been agreed upon
    • Paredes – It’s an allocation that’s earned by the institutions and they are held accountable
  • Zerwas – Is in agreement but wanted to understand why the increase in funding
    • Paredes – This will shift the balance of funding. Create funding based on best interests of the state and reward community colleges that have been doing well
  • Marquez – Asked if the board recommend any more funding beyond the 215
    • Julie Eckland – the higher education board will recommend an additional $ 25 million. So it would be an additional $1.5 million on top of the $1 million already in place per biennium
  • Ashby – Clarified the Board requests, and there would be a total increase of 58 million
    • Paredes – yes
  • Giddings – Is very concerned about what the metrics used to determine funding when schools are matched in similar comparison. She asked if there would be increase in enrollment of returning learners
    • Paredes – it will increase because the economy is constantly changing. In the book Industries of the Future, it stated 2/3 of the jobs 1st graders are competing for currently don’t exist. So that will require more people to continue training and updating skills
  • Giddings – Says this is currently occurring in her district, which is why she is concerned about returning learners not achieving a degree aren’t accounted for in the metric of student success points
    • Paredes – If students achieve an associate’s or certificate or developmental education, that contributes to a success point
  • Giddings – Explains that some individuals are only taking a few classes to improve some schools and won’t be achieving a certificate or degree. She emphasizes this factor needs to be considered as a success point
    • Paredes – You are essentially talking about “continuing education” and there are short term certificates such as project management, with a 3-4 week course. We can attach credentials so we can track and measure that success point
  • Morrison – Commented on in her district with the Eagle Ford Shale, the oil and gas industry had enrollment go down. Victoria Community College is incentivizing the success points and we are doing a good job
    • Paredes – Another thing, the Higher Education Board is trying to expand different models of completion and mastery of knowledge. Texas is a national leader in adopting this model.
  • Community colleges are interested in opportunities to expand and offer a bachelor’s degree for $13,000 to $15,000, which would be less than half the cost of a degree at a 4 year program.
  • Zerwas – Asked to what extent is 60×30 achievable with the decreased enrollment of community colleges
    • Paredes – community colleges will be able to produce more degrees by 2030. When the 60x30TX goal was calculated, it didn’t include an expansion of the bachelor’s degree program
  • Zerwas – Asked about the bachelor’s in nursing and if the state is in a position to expand that program
    • Paredes – I don’t think so, because offering BSN means hiring the appropriate staff and hiring funds with is limited to most colleges
  • Zerwas – Asked for the institutions that do have a BSN program, if they are maxing out funds
    • Paredes – We have 3 colleges with the authority to provide a BSN. The only one maxed out, which proves there isn’t a high demand. There are many things preventing the expansion of a bachelor’s program across the state such as: accreditation, funding, partnership with higher education, rigorous standards
  • Zerwas – Commented on seeing a quick turn in the community needing a bachelor’s. He sees the opportunity for community colleges to do it in an accessible and affordable way
    • Paredes – The Higher Education Board can do this in a way to meet demands and not repeat programs
  • Howard – Commented on wanting to look at the appropriateness of the formulas, balancing affordability and quality. Important to understand how core funding is accounted. 90-10 will be changed to 87-12 is a policy direction we need to consider, and first need to look at if it’s already adequate as 90-10.
    • Paredes – The point of my presentation is creating adequate funding, and community colleges know there is enough funding available to invest in better programs and produce better results
  • Howard – Was concerned about the economy dropping like it did when oil and gas hit like the last recession. She asked Paredes economic questions in which he directed at other panelists.
  • Alonzo – Offered gratitude to work of Parades and the Higher Education Board (HECB)
  • Ashby – Asked about difference in recommendations of the HECB and Paredes. Paredes recommended lower rates than the board and asked for his reasoning
    • Paredes – My recommendation for several sessions is increasing vital outputs instead of increasing enrollment. I wasn’t persuaded that we needed money put into contact hours. I recommended precisely what I thought we needed

 
Panel Three
Jacob Fraire, President and CEO of Texas Association of Community Colleges

  • New to the position
  • Represents 50 colleges of the state
  • Believes each college serves unique communities and many families
  • Desire to maximize the colleges in our community and embraces their role in creating opportunity and achieving the 60×30 goal
  • Other states are modeling their higher education plan after Texas

Raymond Lewis, Community College Association of Trustees, Galveston Community College Board of Trustee

  • TACC, 400 elected officials
  • Trustees make every effort to be good stewards of local tax payer dollars
  • Focus on broad issues that define campuses
  • Each institution is embracing the strategy by the Higher Education Coordinating Board
  • Student success course helps students get college ready
  • Community colleges are the affordable choice with the quickest pathway to achieving work goals with minimal debt
  • Businesses specifically relocate near community colleges knowing they help develop students compete for changing jobs and skills
  • For every $1 dollar a student invests in their education, the state receives $6 from the economy impact
  • Graduates raise the quality of overall workforce

 
 
Dr. Gregory Williams, President of Odessa Community College

  • Community colleges serve local and regional areas as well as the state
  • Community colleges have enrolled about 47% of all students enrolled in higher education
  • 2015 fiscal year had 1.23 million students enrolled in community colleges
    • Demographics: 42% are Hispanic, 30% are Caucasian, and 13% are African American
  • In 2011, 75% of students had community college credits
  • Zerwas – Asked the panel if they could do something in their college to meet their workforce demand what they would do
    • Lewis – make a program that’s quicker, accessible, and more an advanced degree for students. With UTMB in Galveston, offering a bachelor’s in nursing would be most beneficial so students living locally can go work at UTMB upon graduating. Another is increasing support for staff
    • Dr. Williams – would fix the fundamentals. There aren’t enough teachers in our area and we have the lowest performing district. If we could educate students to be teachers we would have higher outcomes and fix other problems.
  • Darby – Wanted an explanation for an increase in basic instruction while maintaining current cooperation funding for the 2018-2019 biennium. This would make an overall increase of  $290 million for the next biennium
    • Dr. Williams – we will have someone on another panel to address those points
    • Fraire– The request represents the investment and structural changes community colleges need to get to. It’s our responsibility to show you that. Success points begin with consideration of everything
    • Williams – we haven’t been effective enough in educating our students up to this point. It’s difficult to educate the newest students in the system and we need tools and resources to make a difference and meet the 60×30 goal
    • Lewis – since 2004 there was a decrease in funding that we have yet to return to
  • Darby – Wanted to make sure the Association can articulate the metrics based on increasing funding
  • Raney – Asked what percentage of vocational and technical students are enrolled
    • Williams – half of all students are enrolled in a technical program and the other half are academic
  • Raney – Asked about difference in funding and which program was cheaper for the colleges
    • Williams – it’s more expensive to educate technical students because of the equipment to train them on, plus the changing economy effects the courses offered. We have to also work arrangements with the industry to provide the most updated equipment to the students
  • Raney – Asked if there more growth in one program or the other.
    • Williams – It all depends. Key for Texas is to make sure there is a solid educational foundation across all programs
  • Raney – Asked what the legislature can do to keep community colleges from teaching so many remedial classes. He felt community colleges are spending too much money on remedial classes
    • Williams – some students don’t do well in public schools, and we also have returning students who lost that knowledge. Some subjects are easy for some students to forget like algebra. Our ISDs are aware of the problem, but we have to help them with that, not punish them

 
Panel Four
Joe May, Chancellor Dallas County Community College District

  • Enroll about 20k in health related programs that cost much more than other programs but cost for tuition are the same regardless which program the students enroll in
  • At same time community colleges are being asked to step up and take on more responsibility for workforce needs as a whole
  • Funding patterns are very predictable where some community colleges are getting zero state funding – chart provided to committee to illustrate
  • Seeing growth in degrees and many lead to jobs and specific careers
  • Reduce credit hours for every degree but it resulted in reduction of funds to college (better economic for state but not for budget of community college)
  • 3 part funding model has worked generally across the state but starting to feel constrained

 
Pam Anglin, Parrish Jr. College

  • Gave background on experience and history of college
  • Reviewed accomplishments of college, training wielders working in various manufacturing facilities and articulation agreements with several universities, etc
  • In regard to the 3 primary fees, tax rate is 18.75 cents per 100 valuation and a 27 cent cap
  • Provided a chart with graphs to the committee illustrating many things including total revenue showing total increase over time coming only from tuition and fees
  • In 2015, 90% of students received some sort of financial aid
  • Have looked to JET grants and outside grants for funding
  • Student population is sensitive to tuition increases under increase pressures to offer dual credit at free or reduce costs
  • Working on taxing entire annexation area which will increase funding

 
Cheryl Sparks, Howard County Jr College

  • Gave visual detail to the committee to help describe the service area of the district which includes an additional 12 counties
  • Reviewed funding streams – funding trends over the last several years
  • Revenue enhancement and expense reduction strategies have been implemented to address funding shortfall
  • Continue to rank low for staff salary and employees are expected to do more with less and have held payroll cost increases to a minimum
  • Students have also seen tuition increases to address funding shortfall
  • Rollback election – 60% voted in rollback election for Howard College
  • Recommends increase in state funding to community colleges

 
Q&A for Panel Four

  • Howard – community colleges are being relied upon to help even more now and meet workforce needs
    • Sparks – at one time what they received from the state was more than they receive today
  • Howard – funding needs set up at one point time met our needs then; but may not work the same today with all the additional needs such as 60x30Tx
    • Sparks – When reaching out in rural areas and they are place bound – it gets expensive but trying to be innovative and reach out
    • Anglin – said she does have issues with connectivity and looked at alternative ways to deliver
    • Howard – so this is something we need to be looking at
  • Alonzo – wanted to know which county is the poorest county?
    • Anglin – Red River
  • Crownover – thanked Dr. Sparks to stop rollback, congratulations
  • VanDeaver – taxing district versus service area, should we consider your ability to tax as formula of state funding? But there are significant disparities.
    • May – Disparity from in-district and out-of-district students is not on that chart which will also impact funding
    • Anglin & Sparks – over 80% of students are out of district
  • VanDeaver – asked about Paris taxing district
  • Anglin – service areas have been there for many years
  • Turner – assuming costs are fixed, that amounts may not decrease just because funding decreases
    • May – have had to wrestle to provide service even if funding is reduced
    • May – explains how they realign dollars to meet needs for example in health care education
  • Turner – may be something the legislature could consider when looking at funding, further rewarding colleges that are investing in critical fields
  • Darby – Sparks points out a dilemma between the taxing authority district and the service related areas but the idea of another layer of taxing authority will not happen in this environment but will need to find a solution and find the right balance
  • Raney – would colleges be interested in increasing the success points
    • May – believe they are a step in the right direction
    • Anglin – gave us a focus, focus on making sure they are advised properly and don’t get out of degree plan
  • Giddings – in your opinion does the legislature need to make any changes to the metrics
    • May – no doubt that one of the things is students with jobs and what they are making but part of challenge is that there are a lot of gaps
    • Will share with Rep. Giddings the metrics they have 
  • Crownover – asked about students who came and just take a course
    • Anglin & Sparks – maybe not help with success points but with contact hour
  • Giddings – why shouldn’t marketable skill be included as one metric in the measurement, something that addresses the person actually going to work

 
 
Panel Five
Dr. Johnette McKown, Mclennan Community College, TACC

  • 80% of Mclennan is within the taxing district
  • All of TAC’s colleges are working to meet the needs of Texas’ students
  • Starting November of 2015, TACC began exploring funding solutions, presenting one joint recommendation to the legislature
  • Recommendation includes 1) Core Operations, 2) Students Success Points, and 3) Instruction
  • 1) Core Operations
  • Legislature has historically built up Small Institute Supplement funding, changed to Core Operations funding in 83rd session, Core Operations designates first $1 million of funding as separate from success point and instruction funding
  • Core Operations is not additional or supplemental funding, rather a way to allocate funding
  • Recommends $50 million level to continue supporting small colleges, also supports proposal to raise minimum to $1.5 million, but fears this could come from other “pots of money” and be allocated away from other key community college funding areas
  • Of 50 community colleges in TACC, 23 are mid-size, 9 large, and 18 small, Core Operations tends to help small colleges
  • $1 million floor should still help small colleges, believes this recommendation would fit all colleges across Texas
 

Dr. Brenda Hellyer, San Jacinto College, TACC

  • Serves 6 SDs in their taxing district
  • 2) Student Success Points
    • Analyzing components for Success Points funding since 2010, looked at several models, including Washington Model
    • Focused on recognizing the work that community colleges do and the support for students
    • Took legislature’s directive to look at performance funding very seriously, developed a “compete against yourself” funding focus
    • 10% set aside follows this, promotes college growth year-by-year
    • Funded tacked to 3-year average to ensure stable funding model
    • 83rd session, Success Points were tacked to 10% and $185 per point, per point rate was reduced in 84th
    • TACC believes per point rate should be returned to at least $185, adequate funding for success points ensure college quality
    • Should decouple 90 and 10%
    • Success points include student success in math, reading and writing, certain first college credit course passage, completion of 15 credit hours, completion of 30 credit hours, certain degrees, and transfers to a university after 15 credit hours
    • Would like to add GED, Marketable Skills, Adult Basic Education, and English as a Second Language as success points, points evidence or capacity does not currently support
    • Correct reporting structures need to be in place to address these issues
    • Over last 5 years, TX community colleges have increased success points by 9.5%, showing strong action by community colleges, other tracking points show similar
    • Even with success point increases, reductions in funding from 84th legislature still lead to decreases in college funding

 
Dr. Bruce Leslie, Alamo Colleges

  • State no longer fully provides funding for community college’s academic efforts, funding has to be “cobbled together” from other sources
  • Believes success points were a good solution to some funding issues focusing on student success
  • 3) Instruction
  • Community colleges have been cooperating to research and develop ways to increase student success
  • Community colleges are beginning to grant the majority of baccalaureate degrees and provide higher quality education
  • This movement is driven by dual credit, redesigning curriculum models to focus on outcomes, redesigning learning support systems such as tutoring centers, redesigning student support centers, adopting support programs in use by major universities, and, most significantly, development of pathways of courses to success (difficult as universities have differing programs and are not easy to match)
  • Some student costs are waived for some of these programs, causing large amounts of funding losses by Alamo Colleges (and by inference other institutions)
  • Strategies also require investments in support staff, training, and technology
  • HB 5 (84th) shows that legislature is in line with these goals
  • Developments are “self-motivated” and due to commitment to student success and belief that this will lead to economic benefits long-term for Texas
  • Strategies are currently self-funded, funding from legislature would be very helpful
  • Inhibited by district tax strategies previously discussed
  • Current request does not make up for losses suffered by community colleges due to 2010 funding cuts

 
Q&A for Panel Five

  • Zerwas – Comments that TSTC tracks success points for some of the additional success point areas
    • Hellyer does not know of TSTC’s model, but can and will look at it
  • Zerwas – Do you do an annual or periodic review of success points?
    • Hellyer responds that this is early, but STEM areas do need some work
  • Howard – For Adult Basic Education, Howard supports the education of individuals returning to school, wonders what the issues with funding are
    • A lot of the funding comes from the TWC, have been working with TWC
    • However “several million” people still exist that cannot be served by the current fudning
  • Howard – Might be an area to look at with 60x30TX
    • San Jacinto has tried to screen entrants and help them work through the system, this process is mostly internally funded
    • Leslie comments that occasionally colleges have had to return funding to the US government as Texas was not matching
  • Howard – Is there a compilation of all of the instruction costs absorbed by community colleges given the funding shortfall?
    • Coordinating Board pulls all of this together, differing institutions have differing practices
  • Ashby – A lot of questioning revolves around the 10% success points, number of different metrics make the situation difficult to understand

 
Public Testimony
Isidro Garza, Cesar E. Chavez Legacy and Educational Foundation

  • Would like state to support community colleges to fullest extent and incorporate the opinions of Hispanic Texans
  • Community colleges are one of the few areas that accurately represent the Hispanic demographic
  • 44% of all students in community colleges are Hispanic
  • Developing a policy in concert with several organizations to support this population

 
Trevor McGuire, Texas Public Policy Foundation

  • When success of 60x30TX is judged in 2030, all of the relevant student will have been of K-12 age and a large proportion will have been Hispanic
  • Community college students will be the target population for 60x30TX goals
  • TPPF presses legislature on goal for performance measure funding and what current formula funding emphasizes for community colleges
  • Too early to say if goals will be best served by pushing funding towards success points, but it is important to focus on what

Charles Tillman, Himself

  • Texas Higher Education Coordinating Board “cannot get its numbers straight”
  • LBB has “sabotaged” the intent of Rider 23, do not require anything substantial from the community colleges
  • Policy should capture the money transfers between communities
  • Education Code Chapter 130 standards have been ignored on taxation limitation, no option to enjoin taxation
  • 10% allocation is difficult to follow