Texas community colleges warned that a performance-based funding model built on student outcomes is entering a period of instability after the state’s coordinating board revised formula weights. Ray Martinez III, CEO of the Texas Association of Community Colleges, told a Texas state Senate hearing that the “growing pains” are now translating into funding uncertainty for fiscal 2027. The new dynamics follow legislative action in 2023 (HB 8), which tied formula funding to completion of in-demand credentials and successful transfers. Leaders point to record gains since implementation—enrollment up about 12% from fall 2023 to fall 2025 and credential and graduation growth exceeding state projections. Because outcomes surpassed what lawmakers budgeted, the state said it is managing within a $1.2 billion appropriation cap while recalculating how certain outcomes are weighted. Colleges said the changes could short them millions they expected, even as they continue to emphasize that HB 8 is driving results. The coordinating board’s changes, reported after it made the revisions last week, set up a near-term scramble for formula clarity before the next legislative session begins in January.