Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR Komadina

ORIGINAL DATE

LAST UPDATED

1/26/06

HB

SHORT TITLE Expand Education Works Program Eligibility

SB 107

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

SUMMARY

Senate Bill 107 would amend state statute 27-2D-4, NMSA 1978 of the Education Works Act to

expand eligibility. The Education Works Act currently restricts eligibility to individuals who do

not have a bachelor's degree. This would amend state statute to remove that restriction, and the

receipt of more than one degree from this program. This amendment further allows individuals

participating in this program to obtain a graduate or post-graduate degree.

SIGNIFICANT ISSUES

Human Services notes that The Education Works Program provides cash payments to a benefit

group that must contain at least one child. Participation is limited to benefit groups who meet a

financial standard of need of 85% of the Federal Poverty Guideline. The financial standard of

need for the Education Works Program mirrors the TANF program for low-income families.

The Education Works Program is limited to twenty-four (24) months participation. Participants

may have an extension of one to two school terms if it will lead to a degree if state funds are

available. The Education Works Program does not pay for tuition, books or expenses related to

obtaining a degree.

Senate Bill 107 – Page 2

Currently there are 500 slots available for the Education Works Program at an annual FY 2006

$2,000.0 budget. During state FY 2005, there was an average monthly participation of 450

participants in the program with a fiscal year expenditure of $1,861,924. The participants in the

program currently have access to the program through universities and community colleges state-

wide.

Data from the Human Services Department work program contractors for FY05 has not

finalized. However, during state fiscal year 2004 there were approximately 43 graduation

degrees obtained by participants in the program as reported by work program contractors.

Expanding eligibility for the Education Works Program could increase opportunities to low-

income families who could not otherwise obtain a graduate or post-graduate degree. The New

Mexico Lottery Scholarship Program only is available for undergraduate programs.

General fund dollars utilized in the Education Works Program currently may be credited toward

the TANF Maintenance of Effort (MOE) requirement. New federal requirements that are likely

to be passed this spring under the federal Budget Reconciliation Bill for TANF reauthorization

will increase TANF work participation rates to 50% of all families receiving TANF and 90% of

all two-parent families. If funding for the Education Works Program is used towards the MOE

requirement, participants of the Education Works Program must meet TANF work participation

requirements. This would be difficult for participants in the Education Works Program since

under federal regulation vocational/post-secondary education is limited to 12 months that

individuals may obtain under the New Mexico Works program. HSD may opt to exclude some

or all these general fund dollars from the MOE requirement.

OTHER SUBSTANTIVE ISSUES

Without additional resources the bill may have the unintended consequence of limiting the

number of persons attending institutions for a two or four year degree. As HSD notes over $1.8

million of the $2 million appropriation was expended. If eligibility is expanded to include

graduate degrees without additional resources the effect would be fewer slots for participants

without any post secondary degree.

MW/yr