NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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

 

 

SPONSOR:

Rawson

 

DATE TYPED:

03/12/03

 

HB

 

 

SHORT TITLE:

NMSU Endowed Chair for Nursing

 

SB

722/aSEC

 

 

ANALYST:

Williams

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

500.0

 

 

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

 

Relates to SB 94, SB 186, SB 291, SB 455, SB 460, SB 466, HB 255, HB 376, HB 385, HB 476, HB 567, HB 756

 

SOURCES OF INFORMATION

 

LFC Files

Commission on Higher Education

New Mexico State University

 

SUMMARY

 

            Synopsis of SEC Amendment

 

The Senate Education Committee amendment removes the reversion language.

 

            Synopsis of Original Bill

 

Senate Bill 722 appropriates $500.0 from the general fund to the Board of Regents of New Mexico State University for the purpose of an endowed chair for nursing.

 

Significant Issues

 

NMSU notes an endowed chair would provide incentive to retain or recruit senior nursing faculty with additional funds and prestige for the faculty member.

 

In 2002, the Nursing Shortage Statewide Strategic Summit of the Commission on Higher Education and the University of New Mexico Health Sciences Center noted the importance of expanding nursing education program by increasing faculty and enhancing faculty retention through sal-

ary adjustments.  Specifically, the Summit calls for an incremental 500 licensed nurse graduates per year (doubling of current levels) beginning in three years and continuing for fifteen to twenty years.

 

FISCAL IMPLICATIONS

 

The appropriation of $500.0 contained in this bill is a non-recurring expense to the General Fund.  Any unexpended or unencumbered balance remaining at the end of FY04 shall revert to the general fund. 

 

Through the Faculty Development Fund created in 2002, NMSU currently has the opportunity to utilize $2,675,000 toward endowed chairs and endowed faculty development programs, as follows:

            Program                         State Treasury funds        Non-govt’l funds (match)  Total    

3 Endowed Chairs                        $1,500,000                  $1,500,000                  $3,000,000

4 Endowed Professorships                  800,000                      800,000                     1,600,000

Endowed Faculty Development           375,000                      375,000                        750,000

                                                            $2,675,000                 

 

According to the LFC budget document, over the past couple of years, the Legislature has appropriated funds to institutions to address statewide nursing workforce needs.  The Legislature appropriated a total of $2,569.8 in FY03 to provide market salary adjustments for nursing faculty, convert nursing faculty from a nine-month contract to a 12-month contract, and expand nursing student enrollments for two-year and four-year institutions, other than the University of New Mexico.  NMSU received $419.2, of which 85 percent was allocated to provide market salary adjustment for nursing faculty and 15 percent was allocated to expand nursing student enrollment.  NMSU Alamogordo received $27.9, with 71.4 percent allocated to provide market salary adjustments for nursing faculty and 28.6 percent allocated to expand nursing student enrollment.  NMSU Carlsbad received $34.9 for market salary adjustment for nursing faculty.  Finally, NMSU Dona Ana received $104.8, equally split between market salary adjustments for nursing faculty and expansion of nursing student enrollment.

 

For those institutions that did not use the funds appropriated in FY03 to expand nursing student enrollments, the LFC recommended institutions expand nursing enrollment in FY04.  The LFC budget recommendation for FY04 includes $419.2 for NMSU nursing expansion, $27.9 for NMSU Alamogordo nursing expansion, $34.9 for NMSU Carlsbad nursing expansion and $104.8 for NMSU Dona Ana nursing expansion.

 

TECHNICAL ISSUES

 

If this is to be an endowment, funds must not revert because the faculty is paid from the interest of the investments.   The bill could be amended to remove the last sentence, the reversion clause, which starts on line 18 and ends on line 20.

 

OTHER SUBSTANTIVE ISSUES

 

The Faculty Development Fund was created during the 2002 session.  Conformity with the law requires that the four-year public higher education institutions have in place two items to access the Fund:  1) an investment policy approved by their Board of Regents, and 2) an advisory committee in place whose duties involve oversight of the institutional investments. AW/njw