Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports
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F I S C A L I M P A C T R E P O R T
SPONSOR Martinez, W.K.
ORIGINAL DATE
LAST UPDATED
2/23/2007
3/04/2007 HB 999/aHEC
SHORT TITLE Reduce School Finance State Credit
SB
ANALYST
McOlash/Aguilar
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY07
FY08
FY09 3 Year
Total Cost
Recurring
or Non-Rec
Fund
Affected
Total
$8,000.0 $59,800.0 $67,800.0 Recurring General
Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Public Education Department (PED)
Attorney General’s Office (AGO)
Department of Finance & Administration (DFA)
SUMMARY
Synopsis of HEC Amendment
The House Education Committee amendment to House Bill 999 provides that school districts
shall budget and expend for capital outlay a portion of the district’s state equalization guarantee
distribution equal to the amount of the local revenue and federal revenue for which the state does
not take credit.
TECHNICAL ISSUES
A central premise under which the state’s educational system operates is “local board control"
which allows school boards to retain local autonomy in the actual use of funds by making the
distribution noncategorical, allowing districts to address prioritize needs locally. The provisions
contained in the amendment direct that districts shall “budget and expend" SEG funds for capital
purposes. This appears to be in conflict with Section 22-8-18 NMSA 1978 which provides that
“Funds generated under the Public School Finance Act [22-8-1 NMSA 1978] are discretionary to
local school boards…"