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

SPONSOR Maestas

ORIGINAL DATE

LAST UPDATED

02/06/08

HB 622

SHORT TITLE Promote Financial Literacy in Schools

SB

ANALYST Escudero

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$100.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to SB 84, HB 408

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Education Department (PED)

SUMMARY

Synopsis of

House Bill 622 appropriates $100.0 to the Public Education Department (PED) to promote and

develop a curriculum for financial literacy education.

FISCAL IMPLICATIONS

The appropriation of $100.0 contained in this bill is a recurring expense to the general fund. Any

unexpended or unencumbered balance remaining at the end of FY shall revert to the general

fund.

PED personnel will research available financial literacy curriculum and pursue development of

such curriculum for the state. 40 hours of an ED Admin A @ $25.50 + 30% and 20 hours of an

Exec Sec A @ $16.89 + 30% = $1.8. Curriculum development and promotion of financial

literacy for students would encompass the remainder of the allocation.

House Bill 622 – Page

2

SIGNIFICANT ISSUES

According to PED, financial literacy has received notable attention since the passage of Title V

of the Fair and Accurate Credit Transaction Act (FACT Act) that established the Financial

Literacy and Education Commission with the purpose of improving the financial literacy and

education of persons in the United States.

http://www.mymoney.gov/aboutus.shtml

There is

current data on high school student financial literacy and their understanding of what is financial

literacy. Results indicate that there is some indication of improvement from the 2004 to the 2006

survey, but it is minimal and less than 60%. (

www.jumpstart.org

).

The U.S. government has established the website,

http://www.MyMoney.gov

dedicated to

teaching all Americans the basics about financial education. U.S. teens have enormous

purchasing power but often lack the skills to manage resources well.

In 2007, the Legislature passed HB 1205 that requires public high schools to offer as an elective financial

literacy that would count as elective credit toward meeting high school graduation units. Staff at the PED

have worked to ensure that information regarding this change to statute was communicated to the New

Mexico public schools, including charter schools, and universities. Currently, an existing Consumer

Economics course meets the requirements of the Financial Literacy elective.

Financial literacy is a component of the Economics Stand of the New Mexico Social Studies

Content Standards.

PERFORMANCE IMPLICATIONS

There is no specific PED performance measure; however, this does support the implementation

of the New Mexico Social Studies Content Standards, Benchmarks, and Performance Standards,

especially

the strand for Economics.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Relates to SB 84 and HB 408. Senate Bill 84 and HB 408 appropriate $100.0 from the general

fund to the Indian Affairs Department (IAD) for culturally appropriate financial literacy training

for teens and adults of the Ramah Chapter of the Navajo Nation.

OTHER SUBSTANTIVE ISSUES

As stated by PED, as financial literacy leads to better outcomes for individual consumers and for

our economy generally and continued effort in this area is highly desirable. Fortunately, given

the current level of interest in improving financial literacy and education both in the United

States and internationally, opportunities abound for cooperation and collaboration among public,

private, academic and community institutions to educate students in this area. Advances in

technology also offer great promise for improving the quality and delivery of financial

information and for sharing of research and best practices among financial education providers.

http://www.mtjumpstart.org/files/Bernankepressrelease.pdf

PME/bb