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

 

 

 

SPONSOR:

HEC

 

DATE TYPED:

03/05/03

 

HB

451/HECS

 

SHORT TITLE:

Public School Employee One-Time Salary Raise

 

SB

 

 

 

ANALYST:

Segura

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

$14,000.0

 

 

Non-Rec

Cash Balances

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

State Department of Education (SDE)

 

SUMMARY

 

     Synopsis of Bill

 

The House Education Committee Substitute for House Bill 451 appropriates $14,000.0 from school district and charter school cash balances to provide a two-percent one-time supplemental salary increase to each school employee calculated on one-half of the employee’s yearly salary. The superintendent of public instruction is given the authority to grant a waiver to any school district or charter school for whom the requirement would cause a hardship.

 

The original bill would have appropriated $14,000.0 from the General Fund to the SDE for expenditure in fiscal year 2003 to provide a two percent one-time, supplemental salary increase to all public school employees.

 

     Significant Issues

 

According to SDE, issues may arise because Article IV, Section 27, of the Constitution of the State of New Mexico prohibits extra or increased compensation for any public officer or servant after services are rendered or contracts made. There is a provision in the approved SBE contracts( Section 22-10-11.A NMSA 1978) for instructional personnel and administrators that allows districts to provide pay increases as mandated by the Legislature; however, because the supplemental salary increase is mandated from district and charter school cash balances, the contract clause may not apply. Section 22-8-41.C NMSA 1978 prohibits the use of operational fund cash balances for salaries and payroll.

 

FISCAL IMPLICATIONS

 

House Education Committee Substitute for House Bill 451 appropriates $14,000.0 from school district and charter school cash balances to provide a two-percent one-time supplemental salary increase.

 

The SDE notes that HB2 reflects the deduction of $16,400.0 in cash balances from school districts’ and charter schools’ and a redirection of operational expenditures into direct instruction, if more cash balance is utilized for fiscal year 2003, the likelihood of a decrease in unit value for fiscal year 2004 becomes greater due to the shortfall in cash balance credit.

 

OTHER SUBSTANTIVE ISSUES

 

Based on 2002-2003 Operating Budget the following are estimated costs to met the mandates of the legislation:

 

                        Teachers                                  $8,331.6

                        Other Instructional                    $1,526.0

                        All Others                                 $3,570.1

                        Transportation                          $   407.5

Total Cost of 2% on ½ Annual Salary         $13,835.2

 

RS/njw