Texas community colleges told lawmakers that the state’s performance-based funding model is creating financial “growing pains” after higher-than-expected student outcomes. Leaders praised HB 8’s focus on credentials and transfer success, but said state obligations increased faster than lawmakers initially budgeted. The Texas Higher Education Coordinating Board approved changes to funding formulas after outcomes surpassed projections, potentially reducing what some colleges expect to receive in fiscal 2027. Representatives said the state is managing a $1.2 billion appropriation cap until the next legislative session. The shift is especially consequential for workforce and transfer pathways, because community colleges built budgets around performance measures that may now be weighted differently to reflect actual results and state caps.