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

SPONSOR Williams

DATE TYPED 03/18/05 HB 405

SHORT TITLE ENMU Ruidoso Branch Community College

SB

ANALYST Williams

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$281.8

Recurring in

FY07; escalates

as phase-in oc-

curs; see text for

details on timing

issues

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates Senate Bill 610

Relates to Appropriation in the General Appropriation Act for Eastern New Mexico University,

Ruidoso Instructional Center

SOURCES OF INFORMATION

LFC Files

Commission on Higher Education (CHE)

New Mexico Association of Community Colleges (NMACC)

SUMMARY

Synopsis of Bill

The bill authorizes the creation of a branch campus of Eastern New Mexico University at Rui-

doso, which then triggers termination of the status of the Ruidoso off-campus instruction pro-

gram of Eastern New Mexico University.

Significant Issues

Pursuant to 21-2-26.9 NMSA 1978, “effective January 1, 1998, no new public post-secondary

educational institution, branch campus or off-campus instructional center shall be created except

as specifically created by the Legislature.” The Ruidoso campus is currently organized as an in-

structional center under 21-14a-1 through 21-14A-10 NMSA 1978 for off-campus instruction.

House Bill 405 -- Page 2

FISCAL IMPLICATIONS

The bill does not contain an appropriation. The bill authorizes branch campus status which en-

hances formula funding of the effort in Ruidoso. The additional funding would support the

physical plant, student services and to some extent academic support, such as the library.

CHE requested the funding expansion be phased-in in a manner similar to that used for the con-

version of the Taos branch of the University of New Mexico. The phase-in consists of 40 per-

cent of total estimated cost in the first year, followed by 15 percent annual increments until the

full 100 percent funding expansion is reached.

Full cost of the expansion is approximately $704 thousand; the partial phase-in of this cost would

be $281.8 in FY06 utilizing the methodology described above.

The associated estimated fiscal impact could be included in legislation as an appropriation for an

FY06 impact. Otherwise, the impact would likely occur in FY07, when CHE updates the higher

education funding formula. This legislation is not a guarantee of funding; future total workload

costs of the higher education funding formula and other needs of higher education such as com-

pensation and inflationary increases will be balanced against availability of recurring general

fund monies. Both LFC and CHE staff agree with this interpretation.

The campus already receives a two-mill property tax levy which is more than the one mill re-

quired of a branch campus. Selected, other two year campuses in the state receive mill levy

revenue greater than that required in statute, but the higher education funding formula only takes

credit for the statutory requirement.

ADMINISTRATIVE IMPLICATIONS

CHE notes enactment of this legislation would also result in establishment of a local advisory

board for the branch campus and an operating agreement negotiated between the Ruidoso branch

and Eastern New Mexico University, Main.

TECHNICAL ISSUES

Does the bill need an effective date to align branch campus status with the beginning of the fiscal

year.

OTHER SUBSTANTIVE ISSUES

CHE regulations (5 NMAC 2.2) require a process for the review and approval of a petition to

establish a branch community college. CHE criteria included in the review process are:

•

A local mill levy of at least two mills;

•

Population base to provide at least five hundred full-time students;

•

At least fifty percent of the costs of initial construction from private or local sources;

•

Governance structure;

•

Means for acquisition of property, including purchase, lease, donations or any other

means;

•

Eligibility and level of funding request of the state; and

House Bill 405 -- Page 3

•

Brokering of extended learning provisions.

The process culminated with the formal approval of the Ruidoso petition by the CHE on January

19, 2005.

ALTERNATIVES

NMACC notes since ENMU-Ruidoso already receives revenue from a two mill property tax

levy, the center is eligible for status as an independent community college.

POSSIBLE QUESTIONS

1.

What are the pros/cons of expanding funding to this instructional center.

2.

How will new funding be allocated to support instruction, academic support, student ser-

vices, or some other branch function.

3.

Who does the campus serve.

4.

To what extent are classes offered at the center generated focused on concurrent enroll-

ment, for credit and non-credit. Is there greater emphasis on any of these components.

5.

What performance outcomes for the branch campus would be reported to the legislature.

How would additional funding impact institutional performance outcomes.

6.

Are there are instructional centers or locations at which students are currently being

served and which may petition for branch campus status in the future.

ANA/rs