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

SPONSOR Varela

DATE TYPED 03/12/05 HB 509/aHAFC

SHORT TITLE Create Nurse Educators Fund

SB

ANALYST Williams

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to numerous student financial aid and nursing bills

Relates to General Appropriation Act with formula funding for student credit hours, nursing ex-

pansion line item, $2 million lump sum to CHE for nursing programs and funding for Nursing

Loan for Service programs

Relates to SB 190/aHAFC

SOURCES OF INFORMATION

LFC Files

Commission on Higher Education (CHE)

Department of Health (DOH)

Health Policy Commission (HPC)

SUMMARY

Synopsis of HAFC Amendment

The amendment removes the appropriation. It is important to note the bill retains the provision

to authorize the CHE to retain up to a five percent administrative fee.

Synopsis of Original Bill

House Bill 509 appropriates $100 thousand from the general fund to the commission on higher

education for the purpose of establishing a new fund to assist degree-seeking, college- and uni-

versity-employed nursing educators to pay tuition and books. CHE is authorized to develop

rules for continuing employment or payback provisions for students utilizing the fund and is

permitted to retain $5,000 as an administrative fee.

House Bill 509/aHAFC --Page 2

Significant Issues

The legislation would establish the precedent of permitting CHE to retain administrative fees.

CHE indicates the agency would require additional FTE to administer the fund, but only $5,000

would be permitted to be retained by the agency under the provisions of this bill.

The HPC notes: “though the schools have almost doubled the number of student nurse slots in

the schools to 1,115, there are still twice as many - 2,005 - qualified students applying for

these slots. This means 12 out of 15 nursing programs in the state have turned down ap-

plicants or have a waiting list of 1 to 3 years for students qualified to enter their pro-

gram.” (Source: NM Center for Nursing Excellence)

As of July 15, 2004, one month before most schools began the fall term, the Center reported

“schools reported 46.5 nurse faculty vacancies. In addition, the average age of the nursing

faculty workforce in New Mexico is 54,” - greater than the national average.

The Department of Health notes:

“The Department of Health and Human Services (DHHS) estimates that vacant nursing posi-

tions in NM will reach 25% in 2005, 36% in 2010 and 57% in 2020. According to the

NM Consortium for Workforce Development (NMCWD), one third of NM nurses are

over 50 years of age. New Mexico currently produces 500 new registered nurses (RNs)

each year, but continues to experience escalating vacancies in health care facilities at a

rate double the national average.”

PERFORMANCE IMPLICATIONS

DOH notes the bill is consistent with its Strategic Plan in Program Area 9: Administration; Stra-

tegic Direction: Achieve excellence and accountability in administration and service. Objective

3: Increase the health workforce supply, in collaboration with other entities in New Mexico.

FISCAL IMPLICATIONS

It is important to note the bill retains the provision to authorize the CHE to retain a five percent

administrative fee.

The appropriation of $100 thousand contained in this bill is a recurring expense to the general

fund. Any unexpended or unencumbered balance remaining at the end of the fiscal year would

not revert.

This bill creates a new fund and provides for continuing appropriations. The LFC is concerned

about including continuing appropriation language in the statutory provisions for newly created

funds. Earmarking reduces the ability of the legislature to establish spending priorities.

TECHNICAL ISSUES

Is it the legislature’s intent for the provisions of the bill to apply to employees of two-year post-

secondary institutions. Clarification may be needed.

HPC notes “would the bill consider if there were a return at some future date to the diploma

House Bill 509/aHAFC --Page 3

school type of programs previously operated by hospital, would those educators be eligible.”

Is it the legislature’s intent to limit the provisions of the bill to New Mexico public, post-

secondary institutions.

OTHER SUBSTANTIVE ISSUES

•

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

tion (Quick Facts 2004, HPC).

•

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 Cen-

ter for Nursing Excellence). The Health Resources and Services Administration (HRSA) pre-

dicts that New Mexico will not be able to fill 57% of its nursing requirements by 2020.

Nursing Education Programs

According to the Nursing Shortage Statewide Strategy Session (NS4) “Addressing New Mex-

ico’s Nursing Shortage: A Statewide Strategy Framework,” almost every New Mexico nursing

education program has a waiting list of 6-75 qualified applicants.

Quoting from “Addressing New Mexico’s Nursing Shortage: A Statewide Strategy Framework -

December 2002,” there are a variety of recommendations from the nursing professionals in the

State to ease the shortage. Some of these recommendations include:

•

Nursing Student Loan for Service Act.

•

Investigate the use of existing programs like the Nursing Student Loan for

Service Act in cooperation with the CHE Health Professions Advisory

Committee to address shortages.

•

Identify and make accessible information about existing and new sources of

money for nursing education, e.g., Nurse Reinvestment Act.

•

Commit state funds for full-time MSN/PhD nursing students in the

education track. If indicated, seek additional funding of the Nursing Student

Loan for Service Program.

The New Mexico Center for Nursing Excellence recommends a faculty loan repayment program.

This program would repay loans associated with graduate education - masters and doctorate

level- in return for a commitment to teach in one of the state's nursing programs for 3 years.

HPC notes the bill “appears to have much of the intent of the recommendations of providing sup-

port to current nurse educators to obtain higher-level degrees which would in turn provide the

advanced faculty required by accrediting agencies. Accrediting bodies recommend that the mini-

mum education requirement for faculty for the associate and bachelor degree programs be a

master’s degree; to teach graduate level nursing programs a doctorate is recommended.”

CHE currently administers the Nursing Student Loan for Service program. This program goal is

to increase the number of nurses in areas of the state which have shortages. As a condition of the

loan, a student must declare intent to practice as a nurse in a designated health professional

shortage area in New Mexico.

House Bill 509/aHAFC --Page 4

ALTERNATIVES

The HPC notes funding from Con Alma or McCune foundations may be alternative sources of

funding.

AW/lg:yr