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

SPONSOR Garcia, Mary Helen

DATE TYPED 02/06/05 HB 155

SHORT TITLE NMSU Financial & Economic Literacy Program

SB

ANALYST Woods

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$50.0

Recurring

General

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to the appropriation for New Mexico State University in the General Appropriations Act.

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Pubic Education Department (PED)

New Mexico State University (NMSU), College of Business and Economics (CBAE)

New Mexico Commission on Higher Education (CHE)

SUMMARY

Synopsis of Bill

House Bill 155 – Making an Appropriation to New Mexico State University to Develop Partner-

ships with the Public Schools to Promote Financial and Economic Literacy – appropriates

$50,000 from the general fund to the Board of Regents of New Mexico State University for ex-

penditure in FY06 to develop partnerships with the public schools and other educational entities

to promote financial and economic literacy. Any unexpended or unencumbered balance remain-

ing at the end of FY06 shall revert to the general fund.

Significant Issues

PED indicates New Mexico teachers are responsible for the delivery of economic education as

part of the K-12 New Mexico Social Studies Content Standards, Benchmarks and Performance

House Bill 155 -- Page 2

Standards. Elementary teachers, in particular, may have a difficult time acquiring economic

education as part of their undergraduate teacher preparation program. This partnership opportu-

nity could provide teachers with additional knowledge and skills to assist students in attaining

the standards. NMSU, as a postsecondary institution in New Mexico, is experienced in estab-

lishing partnership programs with New Mexico schools, as typified by the Math Partnership for

Middle School Teachers initiative.

NMSU-CBAE notes that this program anticipates are several desirable outcomes including the

fact that experienced teachers throughout the state will receive the assistance they need in struc-

turing, integrating, and delivering instruction to their students in economics and personal finance

that is current and assisted by the most up to date instructional technology. Such instruction will

move closer to what is required by New Mexico Performance Standards. Literacy and genuine

interest among students will also grow.

CHE indicates this request was approved by the NMSU Board of Regents and submitted to CHE

for review; however, the program was not recommended for expansion by the CHE at this time.

FISCAL IMPLICATIONS

The appropriation of $50,000 contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY06 shall revert to the gen-

eral fund.

ADMINISTRATIVE IMPLICATIONS

NMSU-CBAE suggests that principals and superintendents in New Mexico public schools will

find it easier to meet current statutory educational requirements in the areas of economics and

personal finance. The program will enable NMSU-CBAE to more intensively utilize its facilities

and the distance education capabilities of NMSU to assist public schools as well as to forge

stronger ties with public schools.

NMSU would retain oversight of the program.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Relates to the appropriation for NMSU in the General Appropriations Act.

OTHER SUBSTANTIVE ISSUES

As general background information – and citing extrapolative analyses from The National Coun-

cil on Economic Education – PED notes that Louis Harris & Associates, Inc. conducted a na-

tional survey, The Standards in Economics Survey, in the spring of 1999, to evaluate adult and

student understanding of the Voluntary National Content Standards in Economics. This survey

was based on interviews with a national cross-section of 1,010 adults ages 18 and over and a rep-

resentative sample of 1,085 students in grades 9-12. Findings from this survey indicate the

following:

•

Only 48 percent of high school students across America understand basic economic con-

cepts embodied in the standards. Students who were taught economics scored higher

House Bill 155 -- Page 3

than those who were not, and students who had at least one college-educated parent

scored higher than those who did not. In spite of the low scores, however, most students

and adults understand the economic principles that had the greatest impact on their daily

lives, such as the most common sources of personal income and the factors to consider

when making purchasing decisions.

•

Students and adults alike lacked a basic understanding of scarcity, money and inflation,

with fewer than half demonstrating knowledge of these values. A majority of adults and

students did not understand the implications of government-established price ceilings or

who benefits from government-supplied goods and services. Many were also unfamiliar

with the definitions of the gross domestic product and budget deficit. The survey con-

cludes that Americans are receptive to economic education, and that economic education

appears to make a significant difference in the understanding of basic economics.

NMSU-CBAE additionally offers the following observations with respect to this initiative:

•

In the mid-1980s New Mexico was placed in a group of about 23 states requiring signifi-

cant K-12 instruction in economics and personal finance. Current education statutory re-

quirements call for courses in economics and personal finance at the high school level

and for an examination of competency in economics at the same level.

•

Performance standards for economics and personal finance literacy in the social studies

strand are, comparatively, some the nations most strident and robust (New Mexico Con-

tent Standards, Benchmarks, and Performance Standards, Reference Guide, Grades 9-

12).

•

Surveys of undergraduate enrollees in introductory economics courses at NMSU indicate

that less than 48 percent of these students have taken the required course in economics

and, of those, very few report having been exposed to the content required by the per-

formance standards. Informal conversations with experienced high school teachers of

business and social studies indicate their preparation in economics and personal finance is

seriously inadequate.

•

NMSU-CBAE has recently received recognition and affiliation with the National Council

on Economic Education (NCEE), an organization which is exclusively dedicated to the

mission of raising cognition levels on a national level in economics and personal finance

by affecting the levels of preparation of teachers in the K-12 grades. NMSU-CBAE

seeks to institute a series of on-campus and distance education summer workshops for

and to develop long term relationships with New Mexico K-12 teachers, The overriding

purpose of these programs is to raise the capacity of teachers to teach stand-alone courses

in economics and personal finance that meet standards as well as to integrate subjects in

both areas into other parts of the curriculum, such as language arts and mathematics. The

expertise of NCEE as well as its vast curriculum and teacher resources will greatly ad-

vance teacher training and delivery in the classroom to the children of New Mexico.

•

NMSU-CBAE is also currently engaged in the process of seeking and obtaining matching

funds from the private sector to assist in this effort. The joining of the funds from will

make it possible, in the first year of operation, to invite forty to fifty teachers from

House Bill 155 -- Page 4

throughout the state to the summer 2005 workshops prepared and delivered by NMSU-

CBAE, pay appropriate stipends, and meet the travel costs of those residing outside of the

Las Cruces area. Additionally, a constant and continuous level of involvement between

NMSU and teachers would be made possible by an interactive web-page as well as mini

workshops held throughout the academic year.

BFW/sb