The way community colleges are funded in Texas could soon be transformed as legislation seeks to tie state dollars to student outcomes.

The effort has wide bipartisan support across both chambers, along with the stamp of approval of the state’s 50 community college districts and several business organizations who are rooting for the move.

The bill now is headed to Gov. Greg Abbott, who has indicated support for revamping how community colleges are funded.

The legislation will provide “a unique opportunity to make foundational change to our community college systems,” said Rep. Gary VanDeaver, R-New Boston, in a statement.

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“But the thing that puts a lump in my throat is the opportunity to provide generational change to Texas families, change that will set them on a course in life that they could have never dreamed of otherwise,” he continued.

The House’s bill on the overhaul sailed through that chamber last month before it made its way to the Senate, where that chamber swiftly voted in favor of it last week. Wednesday lawmakers agreed on the legislation’s final version, sending it to Abbott.

“This is just another way in which Texas will continue to lead other states in making sure that we have a highly skilled workforce that is going to be available for those who are trying to add even more jobs in Texas,” Abbott said about a community college overhaul during a Dallas Regional Chamber event in March.

Advocates say the move would be historic for Texas.

“This represents a major pivot,” said Jarrad Toussant, the Dallas Regional Chambers’ senior vice president for education and workforce. “It “shifts our [funding] system … to what is the new direction of our economy and the needs of our employers.”

House Speaker Dade Phelan made the legislation one of his priorities for this legislative session. The legislation overwhelmingly passed the House with only one nay, cast by Rep. Bryan Slaton.

Here’s what to know as the House bill — which had nearly 100 co-authors as of Friday afternoon — continues to advance.

How does Texas currently fund community colleges?

Community colleges in Texas are funded through a blend of local property taxes, student tuition and fees.

The state — which many say hasn’t kept up with such institutions’ rapidly changing needs — contributes less than 25%. Lawmakers control how much money the state will invest before it’s distributed to colleges based on enrollment.

Under the proposed revamp, the schools’ funding would be influenced by tallying the number of degrees and certificates a college awards; students who transfer to a four-year university; and students who complete at least 15 hours of courses that apply toward academic and workforce program requirements.

How much would this cost Texas?

The changes would require lawmakers to allocate about $650 million in additional funding toward community colleges per biennium, Harrison Keller, Texas’ commissioner of higher education, previously estimated.

Such funding would allow the schools to invest in more wraparound services to eliminate barriers to education and in innovative programs — such as in nursing, education, artificial intelligence or cybersecurity — which are often expensive to implement, Dallas College Chancellor Justin H. Lonon said.

This would allow institutions to “meet growing workforce demands across the state,” Collin College President Neil Matkin said in a statement.

What else would the bill do?

If the legislation is adopted, high school students from low-income families could enroll in dual credit courses at no cost through a new Financial Aid for Swift Transfer program.

VanDeaver, who filed the related bill in the House, said the overhaul could in turn help “bring students back into community college” by making it more affordable after the steep enrollment drops such institutions saw in the last few years.

“We have to get … all Texans back into the classrooms and into the workforce training areas to get them skills they need to be successful,” he said.

The bill would address workforce shortages by expanding partnerships between colleges and private employers to provide students with paid, work-based learning opportunities, VanDeaver said.

The bill “places Texas at the forefront of national higher education reform, and as a result, more Texans will earn the credentials they need for good-paying, in-demand jobs now and in the future,” Margaret Spellings, former U.S. secretary of education and president and CEO of Texas 2036, in a statement.

(The Dallas Regional Chamber is a supporter of the Education Lab.)

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