Alamo Colleges District is positioned to become the top earner of state funding under Texas’ recently revised outcomes-based funding model, which could bring in at least $4.6 million more into its colleges this year.
In 2023, House Bill 8 tied state funding to performance and outcomes, incentivising institutions for the number of students that received credentials for jobs in high-demand fields, those who transferred to public colleges and universities — including some dual enrollment students.
But starting fiscal year 2026, colleges will also see a benefit for students transferring to private institutions, as Senate Bill 1786, which passed this May, adjusted the funding model. This change is key to our region, officials said.
“Under House Bill 8 only Texas public universities counted as transfers for our outcomes funding,” said Priscilla Camacho, Alamo Colleges chief legislative, industry and external relations officer. “For us at Alamo, that’s a big deal because we actually are one of the institutions with the largest amount of transfers to private institutions.”
Alamo Colleges District is positioned to receive a total of over $92 million in state funding for fiscal year 2026, becoming the institution with the largest total funding change in Texas from fiscal year 2025 to 2026, with a difference of over $4.6 million, according to Texas Higher Education Coordinating Board data. These “near-final” amounts are expected to be approved by THECB in August.
Year after year Alamo Colleges’ outcomes have exceeded their estimates, officials said. Just a few weeks ago officials had estimated receiving a difference of about $6 million more in funding, but ended up seeing a $9 million increase in state funding between 2024 and 2026, once all formula funding was solidified.
If approved, the latest funding allocation for fiscal year 2026 would mean a total increase of more than $28 million in new state funding since the launch of the outcomes-based state formula in 2023.
“House Bill 8 and the performance based funding system has served us really, really well,” Alamo Colleges Chancellor Mike Flores said. “It allows us to invest, or reinvest, in students to support faculty and staff and to make critical investments in things (such as) instruction in the classroom, new programs, wrap-around support services.”
Alamo Colleges has seen a nearly 17% increase in enrollment between the fall of 2019 and fall of 2024, according to official figures, a number that bucks the declining enrollment rates seen at other colleges across the state including in Austin, which saw a 5.4% decrease over the same period, and Dallas, which had a 21.6% decrease.
When it comes to the performance of the nearly 79,010 students who were enrolled in the fall of 2024, Alamo Colleges officials reported having a 92.8% course completion rate, and an 80.6% productive grade rate, which accounts for A, B, and C grades earned by students.
“Both course completion rates and productive grade rates, these are leading indicators to things like retention rates, persistence rates and graduation rates,” said Alamo Colleges Vice Chancellor Tom Cleary during a recent board presentation.
In 2024, the colleges awarded 10,671 degrees and certificates, and they project awarding more than 11,000 this year and 12,000 in 2026. Roughly one-third of freshmen students transfer out of Alamo Colleges to enroll at other higher education institutions.
These metrics impact the amount of state funding the colleges receive and the institutions’ operating revenue — which the Alamo Colleges board recently approved at $559 million for the upcoming year.
Flores said part of the district’s success when it comes to outcomes tied to this new funding sources is its ability to tie investments to the local jobs market.
“Alamo Colleges is aligned with the community’s economic development agenda,” Flores said. “We’re focused on those high wage, in-demand economic sectors. So, that includes health care — nursing and all of allied health; that includes manufacturing and logistics … It includes IT with an emphasis on cybersecurity. In all of those areas we are increasing the number of seats in the programs or ensuring that we create programs to meet the demand.”
The San Antonio Report partners with Open Campus on higher education coverage.
