Resource Guide: Funding

Funding

Community college funding has been a responsibility shared by the state, local taxpayers, students, and the federal government.

State funds and local funds are the main sources of revenue for Texas' community colleges. The Legislature appropriates state funds based on the community and technical college funding formula. Community college boards raise local funds through tuition and fees, and property taxes to defray the expenses associated with construction and maintenance of the physical plant.

Any gap between the cost of instruction and the funds provided by the
state has to be absorbed by local districts and results in:
o Deferred maintenance of infrastructure.
o Increased local taxes.
o Increased student tuition and fees

Source: Texas Higher Education Coordinating Board

The state's share of community college funding decreased from 60 percent in FY1984 to 39 percent in FY2000.

State Appropriations: Formula Funding and Contact Hours

Instructional costs are presented to the Legislature as the community and technical college funding formula. The funding formula for community colleges is largely based on the number of contact hours generated.

1. Each community and technical college completes an All Funds Expenditure Report (AFER, formerly known as the "cost study"), which determines the institution's instructional and administrative expenses for 26 funding, disciplines.

2. The Texas Higher Education Coordinating Board compiles the results of the All Funds Expenditure Report and determines the median cost per student contact hour for each of the 26 instructional fields.

3. The total cost of instruction (i.e., the community and technical college funding formula) is determined by multiplying the median cost for each of the 26 instructional fields with the total number of contact hours generated for each of the fields. A percentage of this formula is funded by the Legislature.

When the community and technical college formula was developed at the Texas Higher Education Coordinating Board, the responsibilities of the state and the local college district were clearly identified. The state would assume the responsibility for instruction costs. College districts were "to use local tax funds and tuition for construction and operation of physical plants and maintenance of facilities" (THECB Master Plan, 1969, p. 8).

From FY 1992 to FY 2001, contact hours have increased 19.1 percent.

Although Revenue Per Contact Hour has increased over the past nine years, when adjusted for inflation (using constant 1992 dollars), the following holds true.

o Formula Appropriation: $3.30 in 1992 to $2.78 in 2001, 15.6-percent decrease
o Tuition and Fees: $1.35 in 1992 to $1.85 in 2001, 37.3-percent increase
o Property Taxes: $1.40 in 1992 to $2.14 in 2001, 53.2-percent increase

State Appropriations 1999-2003 (PDF)

For the 2004-05 biennia, the Coordinating Board will recommend that the Legislature maintain funding the current percentage of the formula with adjustments for enrollment increases and for inflation. TACC endorses this recommendation.

2002-2003 Formula Appropriation (PDF)

Local Taxes

Twenty percent of the colleges in the state are at or near their tax cap.

Property Tax Revenues 1997-2001 (PDF)

Tuition and Fees

For a student enrolled for 12 semester hours in a community college, tuition and fees were as follows during the 2001-02 academic year.

	In-District	Out-of-District	Non-Resident
Average Tuition (2001-02)	$262	$328	$ 749
Average Fees (2001-02)	$169	$274	$ 266
Average Tuition & Fees	$430	$602	$1,015
Source: TACC Survey

Tuition and Fees 1997-2001 (PDF)

Source: Texas Association of Community Colleges

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