SENATE BILL 178

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

George K. Muñoz

 

 

 

 

 

AN ACT

RELATING TO PUBLIC SCHOOL FINANCE; REQUIRING THAT SCHOOL DISTRICTS ENROLLING MORE THAN TWO THOUSAND STUDENTS ALLOCATE AT LEAST NINETY PERCENT OF THE MONEY A PUBLIC SCHOOL GENERATES THROUGH THE STATE EQUALIZATION GUARANTEE DISTRIBUTION TO THAT PUBLIC SCHOOL; LIMITING THE UNRESTRICTED CASH BALANCES OF SCHOOL DISTRICTS THAT FAIL TO MEET THE ALLOCATION REQUIREMENT; REQUIRING SCHOOL DISTRICTS AND CHARTER SCHOOLS TO USE EVIDENCE-BASED SPENDING PLANS TO IMPROVE ACADEMIC OUTCOMES OF AT-RISK STUDENTS; ALLOWING THE PUBLIC EDUCATION DEPARTMENT TO INTERVENE IN PUBLIC SCHOOLS THAT FAIL TO MAKE PROGRESS ON IMPROVING OUTCOMES.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of the Public School Finance Act is enacted to read:

     "[NEW MATERIAL] BUDGETS--PERCENTAGE OF STATE EQUALIZATION GUARANTEE DISTRIBUTION TO GENERATING SCHOOLS.--

          A. For each school district that has a student population of more than two thousand, the local school board shall:

                (1) calculate the number of program units that are generated by each public school in the school district through the state equalization guarantee distribution; and

                (2) allocate to each public school within the school district a minimum of ninety percent of the state equalization guarantee distribution generated by that public school's program units.

          B. In any year in which a school district fails to meet the allocation requirement required by the provisions of this section, that school district shall be subject to the following limits on that school district's unrestricted operational cash balance at the end of the fiscal year:

                (1) if the current year program cost is less than seven million five hundred thousand dollars ($7,500,000), eighteen percent of the budgeted expenditures;

                (2) if the current year program cost is seven million five hundred thousand dollars ($7,500,000) or more but less than fifteen million dollars ($15,000,000), twelve percent of the budgeted expenditures;

                (3) if the current year program cost is fifteen million dollars ($15,000,000) or more but less than thirty-five million dollars ($35,000,000), ten percent of the budgeted expenditures;

                (4) if the current year program cost is thirty-five million dollars ($35,000,000) or more but less than three hundred million dollars ($300,000,000), eight percent of the budgeted expenditures; and

                (5) if the current year program cost is three hundred million dollars ($300,000,000) or more, five percent of the budgeted expenditures."

     SECTION 2. A new section of the Public School Finance Act is enacted to read:

     "[NEW MATERIAL] EVIDENCE-BASED SPENDING PLANS TO IMPROVE ACADEMIC OUTCOMES FOR AT-RISK STUDENTS.--

          A. Each school district and charter school shall submit a three-year evidence-based spending plan that describes how the funding the school district or charter school receives from the state equalization guarantee distribution will be used to provide culturally and linguistically relevant education that improves academic outcomes for Native American students, low-income students, English learner students and special education students at each public school. The department shall provide a tool to assist school districts and charter schools in developing an evidence-based spending plan for each public school that is aligned to culturally and linguistically relevant goals and metrics.

          B. The department shall require that school districts and charter schools track and report academic outcomes tied to program funding for Native American students, low-income students, English learner students and special education students at each public school. If adequate progress, as determined by the department, for the target students at each public school has not been made in a school year, the school district shall implement training, reassess curriculum and provide high-quality instructional materials as deemed appropriate by the department for that public school. If a public school has not made adequate progress for at least one of the target student groups for three years in a row, as determined by the department, the secretary shall contract with a level 3A teacher or 3B school administrator, who may have recently retired but had held such license, who has expertise in the issues and needs of at-risk student populations and has experience improving academic outcomes for at-risk student populations to revamp programming provided to those students, including curriculum, instructional material, class scheduling, extended time offerings, professional development for evidence- or research-based or innovative pedagogical methods and any other changes to improve outcomes.

          C. If a public school has met or exceeded adequate progress as determined by the department, the school shall be eligible to receive available discretionary funding for enhanced or additional programming for Native American students, low-income students, English learner students and special education students at that public school."

     SECTION 3. Section 22-8-13.2 NMSA 1978 (being Laws 2011, Chapter 12, Section 1) is amended to read:

     "22-8-13.2. FINANCIAL REPORTING.--

          A. Each local superintendent or person in charge of the fiscal management of a charter school shall provide quarterly reports on the financial position of the school district or charter school, as applicable, to the local school board [of the school district] or the governing body [of the charter school] for use in reviewing the financial status of the school district or charter school. The department shall develop the forms to be used for the financial reporting required under this section. The forms shall provide for at least the following:

                (1) a report on the budget status of the [local] school district or charter school, including the approved operating budget for revenues and expenses compared with year-to-date actual revenue and expenses;

                (2) a statement of any budget adjustment requests;

                (3) cash reports, including revenue, expenses, temporary loans and cash balances for operational, state and federal grants, capital outlay and debt service funds;

                (4) voucher reports, including a list of issued warrants or checks;

                (5) reports listing procurement, travel [or] and gas card expenses; [and]

                (6) investment reports; and

                (7) for school districts with student populations of more than two thousand, a report on how the school district is allocating the state equalization guarantee distribution or other revenue at each public school to improve the academic outcomes of Native American students, low-income students, English learner students and special education students at the public school.

          B. School districts and charter schools shall post the reports required [under] by Subsection A of this section on the school district's or charter school's [web site] website.

          [C. As used in this section:

                (1) "charter school" means a school organized as a charter school pursuant to the provisions of the Charter Schools Act; and

                (2) "governing body" means the governing structure of a charter school as set forth in the school's charter.]"

     SECTION 4. APPLICABILITY.--The provisions of this act apply to the 2026-2027 through 2030-2031 school years.

     SECTION 5. DELAYED REPEAL.--Sections 1 and 2 of this act are repealed effective July 1, 2031.

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