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

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR Irwin

DATE TYPED 02-08-05 HB 301

SHORT TITLE WNMU Nursing Programs

SB

ANALYST Woods

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$584.4

Recurring

General

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to the appropriation for Western New Mexico University in the General Appropriations

Act.

Relates to SB343, HB177, SB84

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Department of Health (DOH)

New Mexico Health Policy Commission (HPC)

New Mexico Commission on Higher Education (CHE)

SUMMARY

Synopsis of Bill

House Bill 301 – Making an Appropriation for the Nursing Program at Western New Mexico

University – appropriates $584,350 from the general fund to the Board of Regents of Western

New Mexico University for expenditure in FY06 to expand the Bachelor of Science nursing pro-

gram. Any unexpended or unencumbered balance remaining at the end of FY06 shall revert to

the general fund.

House Bill 301 -- Page 2

Significant Issues

DOH notes that there is a severe nursing shortage nationally and in New Mexico. As a rural and

frontier state, this is a critical issue for New Mexico. In the 2002–2012 employment projections,

the New Mexico Department of Labor forecasts an annual job growth rate of 37 percent for reg-

istered nurses.

This growth rate predicts new jobs that cannot be handled by the current nursing workforce.

This state projection is consistent with the U.S. Department of Health and Human Services’ pro-

jection that if the current trend continues, New Mexico's nursing shortage will reach 25 percent

in 2005, 36 percent in 2010, and 57 percent in 2020. This is double the national average.

While this program was approved by the WNMU Board of Regents for consideration by CHE, it

is not included in the CHE 2005-2006 Higher Education Funding Recommendation.

PERFORMANCE IMPLICATIONS

DOH indicates this bill is consistent with the DOH Strategic Plan in Program Area 9: Admini-

stration; Strategic Direction: Achieve excellence and accountability in administration and ser-

vice. Objective 3: Increase the health workforce supply, in collaboration with other entities in

New Mexico.

FISCAL IMPLICATIONS

The appropriation of $584,350 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

WNMU would retain oversight of the program.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Relates to the appropriation for Western New Mexico University in the General Appropriations

Act.

Relates to SB343 in that SB343 also appropriates $584,350 from the general fund to the Board of

Regents of Western New Mexico University to fund recurring expenditures of a Bachelor of Sci-

ence degree in nursing and registered nurse program expansion. However, this bill restricts ex-

penditures to FY06, while SB343 authorizes expenditures in FYs 05 and 06.

Also relates to SB84 and HB177, both of which seek to appropriate $500,000 from the general

fund to the Board of Regents of New Mexico State University in FY06 to increase the number of

nursing options in the state.

House Bill 301 -- Page 3

OTHER SUBSTANTIVE ISSUES

DOH indicates that the Executive Budget Recommendation proposes to appropriate nursing pro-

gram dollars in a coordinated way to maximize leveraging of the dollars and avoid duplication.

This effort would be lead by the Commission on Higher Education and is based on recommenda-

tions by the Governor’s Higher Education Task Force. DOH further observes:

•

The funding appropriated in this bill will be used to expand the Bachelor of Science nurs-

ing program. According to the New Mexico Consortium for Workforce Development

(NMCWD), one third of NM nurses are over 50 years of age. New Mexico currently

produces about 500 new registered nurses (RNs) each year, but continues to experience

escalating vacancies in health care facilities.

•

Based on New Mexico Department of Labor and Board of Nursing data, 91 percent of the

registered nurse workforce is currently employed. As of 2004, New Mexico has in-

creased its registered nurse workforce by 9 percent since 2001. As a direct result of the

shortage and nursing vacancies as reported in the New Mexico Consortium for Work-

force Development Survey in 2002, 72 percent of the hospitals curtailed services; 38 per-

cent of home care agencies refused referrals; 15 percent of long-term care facilities re-

fused admissions, and public health offices curtailed services.

•

Legislative funding for nursing education (baseline and $2 million through the Commis-

sion on Higher Education), along with some public/private partnerships, expanded the

capacity in basic nursing programs in FY03 and FY04, almost doubling the number of

nursing student slots from 559 to 1,115. There were 2,005 qualified students for the

1,115 slots in the state’s nursing programs. Twelve of fifteen programs have turned

down applicants, or have a 1-3 year waiting list for students to enter the program. The

largest barrier to increasing school capacity is a lack of qualified faculty. Nursing faculty

positions remain vacant because average faculty salaries are about half that of compara-

bly prepared clinical nurses, and because fewer nurses are choosing a nursing education

specialty in graduate school.

•

Increasing the production of licensed nursing graduates of New Mexico’s nursing educa-

tion programs was the highest priority of the Nursing Shortage Statewide Strategic Sum-

mit convened by the New Mexico Commission on Higher Education (NMCHE) and the

UNM Health Sciences Center in October 2002. The fundamental strategy for addressing

the shortage is expansion of nursing education programs. The planning team recognized

the critical importance of reducing attrition of the professional workforce, but concluded

that increasing nursing graduates provides the biggest potential and achievable gains in

the near future. The number one priority identified at that time was to double the number

of licensed nursing graduates in New Mexico. The second priority was to implement a

process and infrastructure to sustain this effort over the long term.

For comparison purposes, HPC adds the following, more general comments regarding the nurs-

ing shortage problem:

•

New Mexico is below the national average for active registered nurses per 100,000 popu-

lation (Quick Facts 2004, HPC).

House Bill 301 -- Page 4

•

Nationally, there was a 26 percent decrease of registered nurse graduates between 1995

and 2000 (Health Resources & Services Administration, “Projected Supply, Demand, and

Shortages of Registered Nurses: 2000-2020).

•

Recent forecasts speculate a national shortage of 800,000 nurses by 2020 (Bureau of

Health Professions, National Center for Health Workforce Analysis, Projected Supply,

Demand, and Shortages of Registered Nurses: 2000-2020).

•

In 2001, national hospitals reported vacancy rates of 13.0 percent for registered nurses

and 12.9 percent for licensed practical nurses (Healthcare Workforce Shortage and Its

Implications for America’s Hospitals, First Consulting Group, Fall 2001).

•

New Mexico has 14,300 registered nurses (RNs) and 3,000 licensed practical nurses

(LPNs) with New Mexico addresses. The state is significantly impacted by the nursing

shortage with health care institutions having 494 RN and LPN positions they cannot fill

(New Mexico Center for Nursing Excellence). The Health Resources and Services Ad-

ministration (HRSA) predicts that New Mexico will not be able to fill 57 percent of its

nursing requirements by 2020.

CHE notes that it is committed to the adequate and equitable support of necessary instructional,

student services, and academic support initiatives for all students in New Mexico. Activities to

be funded in this proposal are currently recommended for funding through the Instruction and

General (I&G) higher education funding formula within the General Appropriation Act. Fund-

ing of this program without consideration of similar needs at all institutions could weaken the

equitability and thus the integrity of the I &G formula.

BFW/njw:yr