Texas community colleges that outperformed state graduation outcomes are facing smaller performance bonuses after lawmakers adjusted the funding formula. Texas Higher Education Coordinating Board officials trimmed incentives tied to educating high-need students, reducing the additional dollars colleges planned to receive. The revisions are tied to a budget mismatch: colleges’ successes outpaced what the state had budgeted for performance-based payments. The new structure reduces bonuses that trigger extra support for low-income students and adult learners. Administratively, the change matters for how community colleges plan staffing, advising capacity, and targeted interventions designed around graduation and completion metrics. It also pressures how institutions reconcile short-term budget realities with longer-term student success strategies. For boards and leaders, the headline issue is sustainability: performance-based funding can be effective, but it becomes unstable when legislative budget projections do not keep pace with actual outcomes.