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F I S C A L I M P A C T R E P O R T

SPONSOR Carraro

DATE TYPED 01/26/05 HB

SHORT TITLE Require Fourth Grade Reading Proficiency

SB 32

ANALYST Chabot

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$10,000.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Related to the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Education Department (PED)

SUMMARY

Synopsis of Bill

Senate Bill 32 appropriates $10 million from the general fund to the Public Education Depart-

ment (PED) for the purpose of funding reading enhancement in grades one through three in the

public schools. It adds a new paragraph to Section 22-2C-6 NMSA “REMEDIATION

PROGRAMS—PROMOTION POLICIES—RESTRICTIONS—stating that a student who fails

to read proficiently by the end of the third grade shall not be promoted to the fourth grade until

the student reads proficiently. It exempts the provision for developmentally disabled students

with a developmentally appropriate plan approved by a licensed school employee.

Significant Issues

PED states the bill would change the scope of current statutes which allows a parent or guardian

to sign a wavier indicating the desire that the student be promoted to the next higher grade level

if they have an academic improvement plan.

Senate Bill 32 -- Page 2

PED further states “The research on the effects of retention—particularly for students at risk,

such as those who speak a primary language other than English—suggests a strong association

between retention and student dropout rates. Furthermore, as a remediation strategy, retention

does not appear to improve school performance (Roderick, Melissa. “Grade Retention and

School Dropout: Policy Debate and Research Questions,” Phi Delta Kappa Research Bulletin,

n15, pp. 1-6, December 1995).

From assessment data from 2003-2004, approximately 23,000 could be retained for failure to

read proficiently.

PERFORMANCE IMPLICATIONS

Reading proficiently is currently tested and reported for 4

th

grade students and is a performance

measure found in the General Appropriation Act for Public School Support. It is also a require-

ment under the federal No Child Left Behind performance indicators. Requiring reading profi-

ciency for promotion to the 4

th

grade will improve performance indicators for 4

th

grade profi-

ciency.

FISCAL IMPLICATIONS

The appropriation of $10 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of fiscal year 2006 shall revert

to the general fund.

The LFC FY06 appropriation recommendation is balanced between revenues and expenditures

and any increase in recurring funding must be offset by reductions in other areas of the recom-

mendation. The Legislature must consider all priorities and funding requirements to find reve-

nue to support this legislation.

PED estimates the cost for retaining students would be $2.1 million based upon estimated costs

of $1 thousand per student in the Reading First program, $750 for beginning step, and $500 for

those nearing proficiency. The department estimates administrative costs of $87 thousand and 2

FTE to administer the program.

ADMINISTRATIVE IMPLICATIONS

PED will have to develop procedures for awarding the funds to districts. It will need to develop

criteria, curriculum, application forms and procedures, review and award processes. In addition,

performance measures and reporting requirements will be required to determine success of the

reading enhancements funded by the appropriation.

ALTERNATIVES

The appropriation could be made directly to public school support to be distributed through the

state equalization guarantee.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

The existing statute would remain unchanged.

Senate Bill 32 -- Page 3

POSSIBLE QUESTIONS

1.

What are the key components envisioned for the reading enhancement program.

2.

Is non-promotion the best method to ensure reading proficiency.

3.

Are PED administrative costs contained in the appropriation.

GAC/lg