HOUSE MEMORIAL 98

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Sandra D. Jeff

A MEMORIAL

REQUESTING THE LEGISLATIVE EDUCATION STUDY COMMITTEE, THE LEGISLATIVE FINANCE COMMITTEE AND THE PUBLIC EDUCATION DEPARTMENT TO COOPERATE IN A STUDY OF THE FUNDING FORMULA, INCLUDING THE FAIRNESS OF PROPERTY TAX MILLAGE VERSUS IMPACT AID AND FOREST RESERVE CREDITS AND OTHER ISSUES RAISED IN LEGISLATION SINCE THE LAST FUNDING FORMULA STUDY.

     WHEREAS, the current public education funding formula was created in 1974 and was considered one of the most innovative, equitable school finance plans in the country; and

     WHEREAS, the formula is based on the premise that all students should have equal access to programs and services appropriate to their educational needs regardless of geographic location or local economic conditions, and it is supposed to provide equalized funding for all school districts; and

     WHEREAS, the state equalization guarantee, which is the distribution of state money for education, is computed by determining each school district's or charter school's total program units, based on certain factors, including membership and certain needs of students like bilingual or special education; the program units are then multiplied by the training and experience of teachers and other professional staff, which product is then multiplied by the unit value to derive the program cost; and

     WHEREAS, essentially, the state equalization guarantee is a school district's program cost minus revenue credits; and

     WHEREAS, the federal government gives money to school districts in which lie national forests, known as forest reserve funds, or in which lie federal land or federal reservations, including military bases and tribal lands, commonly known as "impact aid" or "P.L. 874" funds, and the state takes credit for seventy-five percent of these receipts in the same way that it takes credit for money raised by school districts in the imposition of the half-mill levy property tax; and

     WHEREAS, when local property tax accounted for a bigger share of the public education revenue stream, the credit taken for impact aid was a more equitable proposition; however, now, the poorest and most economically disadvantaged districts are contributing the biggest percentage of local revenue to the statewide school budget. This inequity is demonstrated in the following table, which shows the statistics of three wealthy school districts and three impact aid school districts, using the number of students, the percent of total state membership that those students represent, the percent of budget contributed by each school district and the credit per student:

District    Students    % of Total  % of          Credit per

                                    Contribution  Student

APS         92,456.75    28.77%       4.542%         $40.39

Rio Rancho  16,346.75     5.09%       0.578%         $29.07

Santa Fe    13,862.50     4.31%       1.154%         $68.44

Central      6,225.50     1.94%      17.871%      $2,359.85

Gallup      11,824.75     3.68%      28.901%      $2,009.22

Zuni         1,388.50     0.43%       5.574%      $3,299.84; and

     WHEREAS, the legislature funded a multiyear task force to study the current funding formula, and, after its study, the task force proposed a new, simpler funding formula that promised both horizontal and vertical equity; however, the new formula's implementation would have required more money, and, unfortunately, the proposal came before the legislature at about the same time as the economic crisis; and

     WHEREAS, there have been attempts during this and several immediately preceding legislative sessions to make significant changes to the funding formula, without the issues and potential consequences having been studied;

     NOW, THEREFORE, BE IT RESOLVED BY THE HOUSE OF REPRESENTATIVES OF THE STATE OF NEW MEXICO that the legislative education study committee, the legislative finance committee and the public education department be requested to cooperate in a study of the funding formula and the twin issues of formula equity and impact aid credits, as well as other proposed changes to the current formula that have been put forth since the task force reported to the legislature, including special education maintenance of effort, small school size adjustment and other issues; and

     BE IT FURTHER RESOLVED that the legislative education study committee take the lead in conducting the study, actively assisted by the other two partners, and that the three entities involve school superintendents, district financial officers, impact aid and forest reserve recipient school districts, charter schools, teachers and other education and educational finance experts; and

     BE IT FURTHER RESOLVED that the committees and the department report to the legislature by January 1, 2014 on their recommendations for changes to the current funding formula; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the director of the legislative education study committee, the director of the legislative finance committee and the secretary of public education for appropriate distribution.

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