How are Community Colleges Funded?

As a sector of higher education, Texas public community colleges obtain revenue from three major sources:

1. Student tuition and fees
2. Local taxpayers through property taxes
3. State appropriations

Tuition and Fees

Each community college district sets the institution’s tuition and fee structure. Tuition and fees are considered institutional funds and are not appropriated by the state. San Jacinto College is well below the average with in-district tuition / fees at nearly $54.67 per semester credit hour, and out-of-district tuition / fees at $95.67 per semester credit hour.

Local Taxpayers

Each community college board is authorized by state law to levy an annual ad valorem tax rate. Ad valorem taxes are used for both the maintenance and operation of the College as well as paying indebtedness on bonds issued for the purchase and construction of facilities. State law sets a limit on the tax rate that can be levied of $0.70 per $100 of valuation. Of this maximum rate no more than $0.50 per $100 of valuation may be used for bonded debt – leaving $0.20 per $100 of valuation for operations. The San Jacinto College tax rates for the Fiscal Year 2011-2012 are as follows:

What does this mean for our taxpayers?

For a home appraised at $150,000 that qualifies as a homestead, the annual taxes would be $269.12. A home appraised at $150,000 that qualifies as a homestead, and where the owner qualifies for an over 65 or disabled exemption, the annual taxes would be $32.48.

State Appropriations

The state legislature appropriates general revenue funds to public community colleges. The majority of these funds are based on a community and technical college funding formula. This formula is based on student contact hours and funding rates based on a percentage of costs. The legislature limits the use of these funds to cover instructional and administrative costs. In addition to formula funds, the legislature appropriates general revenue funds to community colleges for employee group health insurance and retirement. Over time, formula funding has decreased whereby state appropriations once equaled more than two-thirds of community college funding, but in 2011, only 27 percent of San Jacinto College funding came from state appropriations.

Federal Funds – Restricted to Agency Requirements

In addition to the three revenue sources listed here, the College also receives funding from federal and state grants. The College had an increase of $20.5 million in Federal Title IV funds, which includes the Pell Grant, the Federal Supplemental Educational Opportunity Grant, the Federal Student Aid Loans program, and the Federal Student Aid Work-Study program. The Pell Grant increased by 79.4 percent ($15.5 million) in the amount paid, and 42.4 percent in the number of recipients. The increases were primarily attributed to an increase in enrolled students who were eligible for the Pell Grant. Federal regulations eased the eligibility criteria and increased the maximum amount of Pell Grant students could receive. The College also had an increase in the number of students who participated in the Federal Family Education Loan Program. The College had 30.4 percent (479) more borrowers and 40 percent ($5 million) increase in the amount paid. The increase can be attributed to an increase in unemployed students and/or parents.