Texas community colleges reportedly beat early performance outcome projections under a state funding model designed to reward graduation progress—but the Texas Higher Education Coordinating Board adjusted the formula after lawmakers’ budget assumptions did not match actual results. The board trimmed incentives tied to educating high-need students, reducing the size of future bonuses for low-income students and adult learners reaching graduation. The move directly affects institutions’ revenue planning in a sector already operating under tight operating margins. The article frames the change as a response to colleges delivering more than expected graduation outcomes compared with what lawmakers budgeted. Board officials revised the funding formula during a Wednesday meeting, underscoring how state performance-based funding can create shortfalls when success outpaces appropriations.