The Massachusetts community college system is entering a second year with funding for each of its 15 schools determined using a new performance-based formula. Under the new model, 50% of each college's allocation is based on performance on metrics related to enrollment and student success, with added incentives for "at-risk" students completing certificates and degrees and those graduating in disciplines that fuel that state's economy. The new funding model provides clarity, equity, and accountability to students and taxpayers. The evolution to this new formula is an accomplishment that sets Massachusetts apart nationally. With the exception of Tennessee--the first state to adopt value-added assessment for evaluating K-12 teachers, and where all funding for higher education is based on performance--no other state has been so bold to tie 50% of funding to performance. Ultimately, the Massachusetts funding model highlights the values of the system and its commitment to aligning education with the workforce needs of the state. The new funding formula also preserves the system's historical commitment to the liberal arts and encouraging students to transfer to bachelor's-degree granting institutions.