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

SPONSOR McSorley

ORIGINAL DATE

LAST UPDATED

1/27/08 HB

SHORT TITLE State Work Study Program Funding

SB 240

ANALYST Wilson

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$1,500.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Children, Youth & Families Department (CYFD)

Higher Education Department (HED)

SUMMARY

Synopsis of Bill

Senate Bill 240 appropriates $1,500,000 from the general fund to the Higher Education

Department for expenditure in fiscal year 2009 to increase funding for eligible institutions to

employ eligible students through the state work study program.

FISCAL IMPLICATIONS

The appropriation of $1,500,000 contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of fiscal year 2009 shall revert

to the general fund.

HED requested a substantial increase in general fund in the FY09 work study budget for

increased capacity and funding to account for new state minimum wage laws. The HAFC

recommendation includes a $250,000 increase or 4.4% over the FY08 appropriation. However,

documentation for increased costs due to the statewide minimum wage and intended expanded

uses of general fund support to enhance work study capacity was not provided to the LFC before

the finalization of the LFC Report by HED.

Senate Bill 240 – Page

2

HED has now provided the following documentation:

Funding provided through SB240 will allow for adjustment to recent increases in the

minimum wage, an additional 600 work study jobs, and minimal support for approved

community organizations to host work study college students through the New Mexico

Work Study Program. SB240 will also leverage in additional Federal Corporation for

National and Community Service Eli Seigal Education Awards (scholarships through the

New Mexico Commission for Community Volunteerism) at an estimated amount of

$1,000 per work study job for a total of $600,000. This scholarship is not an additional

scholarship to be managed by HED.

SIGNIFICANT ISSUES

The New Mexico Work Study Program allows students to earn funds to offset costs associated

with continuing their education. According to the New Mexico Commission for Community

Volunteerism, the increased funding for work study requested in SB240 will provide additional

college students with the experience of hands-on career exploration in a variety of fields of

study. In return students will earn wages to support their academic goals. Work study is also an

effective debt prevention tool. Students who earn wages through work study are less likely to

exit college with significant debt.

Increased student debt burden can negatively affect students’ entry into public service careers,

including teaching and social services, as students are less apt to pursue lower-paying

occupations. According to the American Association of State Colleges and Universities, while

average debt levels are rising nationally, select states, including New Mexico, are taking

proactive roles to overcome the subsequent service shortages through creative programs such as

loan for service and debt repayment programs. While these efforts can be successfully directed

to target specific shortages in public service occupations, overall increases in funding for general

work study or service related programs can assist students in multiple fields in retention and

subsequent attainment of degrees.

OTHER SUBSTANTIVE ISSUES

The New Mexico Work Study Program was created to provide funding for employment

opportunities for qualified resident students attending New Mexico’s public colleges or

universities and the following eligible colleges in New Mexico:

•

College of Santa Fe

•

St. John's College

•

College of the Southwest

•

Institute of American Indian Art

•

Navajo Technical College

•

Dine College

•

Southwestern Indian Polytechnic Institute

Student employment can be through public postsecondary institutions, nonprofit educational

institutions, state political subdivisions, state agencies, and approved nonprofit organizations.

The amount of work study awarded to a New Mexico student varies depending on the student’s

financial need and the availability of funds. To be eligible for work study, a student must:

Senate Bill 240 – Page

3

•

Be a United States Citizen

•

Qualify as a New Mexico resident

•

Be enrolled as an undergraduate or graduate student

•

Enroll at least half-time during regular session

•

Enroll at least 3 credit hours during summer session

•

Demonstrate financial need

DW/bb