Community colleges are key to solving Texas’ shortage of skilled workers

By 2030, 62% of all Texas jobs will require a postsecondary credential. The problem is Texas lacks the skilled workforce to fill these jobs. In a recent Dallas Fed survey, “labor shortages/difficulty hiring” continued to rank as a top concern for Texas firms, above even inflation and interest rates. Community colleges can be the solution to our state’s workforce challenges, but that requires a shift in how the state funds them.

Despite having one of the longest sustained economic expansions in American history, Texas risks a decline in competitiveness due to a lack of postsecondary attainment among working-aged adults. Less than one in four of our high school graduates go on to achieve any type of certificate or credential six years later. This means employers are currently dependent on an influx of workers from out of state to “fill critical workforce gaps.” This is a major problem. Our state should focus on upskilling Texans rather than relying on continued in-migration. Community colleges are uniquely positioned to help.

By offering accessible, affordable pathways to jobs in high demand fields, community colleges can act quickly to meet local workforce needs. However, the current funding model lacks the nuance necessary to rapidly respond to our evolving economy.

Texas legislators are considering a massive overhaul to the community college finance model. Rather than focusing on the number of hours a student spends in classes, House Appropriations subcommittee chair, Gary VanDeaver, and Senate Education Chair, Brandon Creighton, have filed legislation to financially reward colleges for the specific performance outcomes students achieve. House Bill 8 and Senate Bill 2539, if passed, will infuse $650 million into community colleges, the majority of which will be dedicated to a dynamic, outcomes-based funding formula.

This investment carries policies that stem from recommendations from the Texas Commission on Community College Finance. Commission members met over the course of 2022 and offered final recommendations to improve postsecondary success and economic competitiveness, many of which are included in HB 8 and SB 2539. All 50 of our state’s community college districts are in support of the recommendations.

These bills will encourage community colleges to prioritize programs that meet their local workforce needs so that Texas businesses will have access to a skilled workforce aligned to their industries and students will have an affordable pathway to gainful employment.

As a member of the Aim Hire Texas Policy Coalition, a network of over 60 partners including business leadership and education advocates spanning the entire state, we know this policy shift will be truly transformational for our state, and we are working with the Legislature to support community colleges through this reform.

Research from Georgetown University shows that earning an associate degree can improve a worker’s lifetime earnings by over half a million dollars. By empowering more Texans with the credentials necessary to increase their earning power, our state stands to increase overall lifetime earnings for native Texans by tens of billions for each student cohort.

According to Texas Comptroller Glenn Hegar’s revenue estimate, Texas lawmakers have a $33 billion surplus in the upcoming biennium, making the 88th Legislature a unique and advantageous opportunity to specifically invest in workforce development. This legislative session must focus on workforce. By strategically investing in community colleges, we can ensure our economic growth for generations to come. Texas depends on it.

Learn more about community college finance reform and sign up for legislative action alerts by visiting aimhiretexas.org/policy.