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

SPONSOR Stewart

DATE TYPED 03/12/05 HB 286/aSEC

SHORT TITLE School Principal Salary Calculation

SB

ANALYST Chabot

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

Public Education Department (PED)

SUMMARY

Synopsis of SEC amendment to HB 286

The Senate Education Committee amendment to House Bill 286 amends the title and provides

that if a level 3-A teacher does not demonstrate essential competency in any given school year,

the district shall provide professional development and peer intervention during the following

school year. If the teacher still fails to demonstrate essential competency, the school district may

choose not to contract with the teacher to teach in the classroom.

Synopsis of Original Bill

House Bill 286 amends Section 22-10A-2 NMSA 1978 of the School Personnel Act to include

the definitions of an “instructional leader”, and “responsibility factor”. It strikes existing mini-

mum principal salaries in statute and replaces it with minimum salaries for principals and assis-

tant principals based upon a ten-month contract tied to the minimum salary for a level 3-A

teacher multiplied by the responsibility factor. Upon demonstration of instruction leader compe-

tence through highly objective uniform statewide standard of evaluation, minimum salaries

would be as follows:

House Bill 286/aSEC -- Page 2

SCHOOL YEAR 2006-07 (FY07)

Position

Level 3-A

Minimum

Responsibility

Factor

Minimum

Salary

High School Principal

$45,000

1.60 $72,000

High School Assistant Principal

$45,000

1.25 $56,250

Middle or Junior High School Principal

$45,000

1.40 $63,000

Middle or Junior High School Assistant Principal

$45,000

1.15 $51,750

Elementary School Principal

$45,000

1.20 $54,000

Elementary School Assistant Principal

$45,000

1.10 $49,500

SCHOOL YEAR 2007-07 (FY08)

Position

Level 3-A

Minimum

Responsibility

Factor

Minimum

Salary

High School Principal

$50,000

1.60 $80,000

High School Assistant Principal

$50,000

1.25 $62,500

Middle or Junior High School Principal

$50,000

1.40 $70,000

Middle or Junior High School Assistant Principal

$50,000

1.15 $57,500

Elementary School Principal

$50,000

1.20 $60,000

Elementary School Assistant Principal

$50,000

1.10 $55,000

Significant Issues

The Three-Tiered Teacher Licensure established minimum salaries for teachers. However, ac-

cording to DFA, a number of states, including New Mexico, are experiencing difficulties in re-

cruiting and retaining principles. The National Conference of State Legislatures predicts by

2008, the number of principals needed is expected to increase 20 percent. The Office of Educa-

tional Accountability and the University of New Mexico surveyed approximately 70 percent of

New Mexico schools and found the average principal tenure is 2.8 years and 51 percent of the

schools responding had 3 to 7 principals in the last ten years. The LESC School Principal Work

Group identified 701 principals and 333 assistant principals in the 89 school districts.

Principals are identified in the bill as the instructional leader for school and continuity is a criti-

cal factor in improving instruction.

The Senate Education Amendment adds the provision of requiring professional development and

peer intervention for level 3-A teachers not demonstrating professional competencies. It pro-

vides that the school district may choose not to contract with the teacher to teach in the class-

room if the professional competencies are demonstrated after the professional development and

peer intervention. In addition, school districts will have to comply with all due process require-

ments related to employment and termination proceedings established by the district policies and

also consider any teacher union contracts related to termination or change of duties.

PERFORMANCE IMPLICATIONS

If minimum salaries improve recruitment and retention of principals and assistant principals, im-

proved student outcomes may result.

House Bill 286/aSEC -- Page 3

FISCAL IMPLICATIONS

No appropriation is contained in this bill; however, increases in program costs in the State

Equalization Guarantee will result as the minimum salaries are implemented. In the presentation

to LESC in November 2004, recurring costs were estimated at $2.5 million for FY07 and $4.1

for FY08. Actual costs will be determined by the salaries being paid at the start of each year. In

addition, DFA estimates $200 thousand will be needed to develop the evaluation framework for

principals and assistant principals that is to be in place before the minimum salaries become ef-

fective.

PED estimates $175 thousand will be needed to design the required evaluation system which will

need to be in place by end of the 2005-06 school year. It states the agency cannot absorb the cost

within the appropriated budget. The agency suggests using contractors would be the best way to

design the evaluation system.

TECHNICAL ISSUES

House Bill 286 should be amended to include an appropriation of $175 thousand to fund the de-

velopment of the required evaluation system.

ALTERNATIVES

Leave the statute unchanged and pay principals based upon school student population (200 or

fewer, $58,000; 201 to 400, $60,000; 401 to 600, $62,000; 601 to 800, $64,000; 801 to 1,000,

$66,000; and more than 1,001, $68,000). Assistant principals are not included in the current

statute.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

The statute will remain unchanged.

POSSIBLE QUESTIONS

1.

Should principal and assistant principal salaries be a negotiated item without having a

minimum salary level.

GAC/lg