Texas State Technical College is striving to fill the state’s workforce gaps, but college leaders say the institution has been hampered by out-of-date facilities and a lack of funding to expand.

The technical college has historically been entirely reliant on state funding, which can fluctuate. Unlike the state’s community colleges, it’s not allowed to levy taxes or issue bonds. And yet, the institution is bursting at the seams with 45 out of its 127 programs at capacity this semester across its 11 campuses. Enrollment at the institution has risen steadily over the last few years, jumping up to 13,682 students this year from 12,518 last year.

But this past election cycle, Texas voters gave the institution a rare gift for a technical college—an $850 million endowment.

In November, almost 70 percent of Texans backed a constitutional amendment to create an endowment for TSTC out of the state’s general revenue fund, which will include annual disbursements for capital improvements. College leaders expect up to $50 million from the endowment each year, said Joe Arnold, the college’s deputy vice chancellor of government relations.

He called the endowment “transformational for the institution and for the state of Texas.”

“Texas has grown and grown and grown in businesses and population over the last 20 years, and it’s going to continue to grow,” Arnold said. “You’re going to have to have the workforce to meet the demand, and this is going to help us do that.”

This is the second time TSTC has sought to get an endowment on the ballot. In 2023, an attempt to establish a $1 billion endowment for the college died in conference committee, The Texas Tribune reported.

An Unusual Advantage

Endowments at two-year institutions are rare compared to their four-year counterparts, but they aren’t unheard of. Southwest Wisconsin Technical College, for example, recently used its $700,000 Aspen Prize for a student success plan endowment run by its foundation. Ivy Tech Community College’s foundation also raises money for endowments to pay for student scholarships and other needs.

Some states have also provided such funds for their public higher ed institutions. Alabama, for example, has an education trust fund for its institutions, including two-year and four-year colleges. Tennessee also put lottery reserves in an endowment to sustain Tennessee Promise, its free community college program. Texas’s Permanent University Fund also allows the University of Texas and Texas A&M systems to generate money from land leased by oil and gas companies.

But still, “most public institutions don’t have state-provided endowments like that,” said Robert Kelchen, head of the Department of Educational Leadership and Policy Studies at the University of Tennessee at Knoxville. The advantage of an endowment is college leaders “know that the funds are going to be there and they have some level of control over how it gets drawn down.” But it’s a hard model for other states to replicate unless they have “a windfall [of] one-time funds” they’re willing to devote, without pulling back on state appropriations.

“Because of a lot of the politically conservative legislation coming out of Texas, I think the perception is that Texas doesn’t financially support higher ed, but they do, and they’ve done some pretty innovative things in finance,” Kelchen added.

Arnold said it makes a real difference knowing the institution has a set amount of money coming in each year.

“We can plan for growth” and “plan ahead,” Arnold said.

Support and Opposition

Plans for the endowment had the backing of a wide range of employer groups, including the Texas Association of Manufacturers, the Texas Association of Builders and the Texas Economic Development Council, among others.

It also drew opponents, including the Libertarian Party of Texas and a few other groups that support limited government. These organizations raised concerns that creating a separate tranche of long-term funding for TSTC could get in the way of its fiscal oversight.

For example, Texas Policy Research, a research organization that seeks “liberty-based solutions” to improve Texas governance, recommended Texans vote no—arguing that “locking funding mechanisms into the Constitution erodes transparency and limited government” and that “programs should be funded through the regular budget process, where lawmakers justify spending every two years.”

But Arnold stressed that the money can only be used for specific purposes, such as renovations, infrastructure improvements and buying new land, buildings and equipment for programs.

Those types of funds are sorely needed, Arnold said. TSTC was founded 60 years ago and its flagship campus is on an old U.S. Air Force base. The funding will allow the college to update its “rather old facilities” and move forward with plans to add new campuses in three additional counties.

Defenders of the proposition also argue TSTC’s funding model holds it accountable. The state tracks graduates’ wages five years after they leave TSTC, and state money is doled out to the college based on their wage gains. Select programs also refund students’ out-of-pocket tuition costs if they don’t get a job interview in their field of study within six months.

The college’s funding depends on “graduates securing good jobs,” Meagan McCoy Jones, president and CEO of McCoy’s Building Supply, wrote in an op-ed in The Austin American-Statesman defending the endowment proposal. “That ensures accountability to students, taxpayers and employers alike.” She told voters the endowment would “strengthen our economy, support families with life-changing education and keep our state on a path of growth and innovation.”

Since the funding formula was implemented in 2013, the college has discontinued programs that didn’t lead to well-paying or in-demand jobs.

“It made us really work hard with our employers to understand what the needs were,” Arnold said.

He believes the endowment is the next step in continuing to improve the institution.

“We’re excited to be able to increase our capacity and put more people to work in Texas,” he said. “That’s kind of our thing.”