Texas community colleges are warning that the state’s performance-based funding model for outcomes is creating financial pressure rather than stabilizing revenue expectations. At a Texas state Senate hearing, Texas Association of Community Colleges CEO Ray Martinez III described “growing pains” after the Texas Higher Education Coordinating Board approved changes to formula weights that could reduce performance-based funding. The performance model, enacted in 2023 through HB 8, ties funding to outcomes such as completion of in-demand credentials and successful transfers. While leaders credited early gains—Texas community college enrollment grew about 12% from fall 2023 to fall 2025, and outcomes outpaced projections—the board is adjusting how certain outcomes are weighed as the state manages an appropriation cap of $1.2 billion until the next legislative session. Texas officials said the state is responding to higher-than-anticipated obligations as achievement surpassed legislative budget assumptions. Colleges are urging lawmakers to ensure the long-term stability of the funding formula given the risk of shorting institutions that planned staffing and program capacity around earlier incentive calculations.