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 Nava

DATE TYPED 01/31/05 HB

SHORT TITLE Charter School Growth Units

SB 274

ANALYST Chabot

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB 120, SB 125

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Education Department (PED)

SUMMARY

Synopsis of Bill

Senate Bill 274 amends Section 22-8-23.1 NMSA of the Public School Finance Act to add char-

ter schools to the enrollment growth program unit calculation under public school funding for-

mula. In this calculation, charter schools will be considered the equivalent of a school district.

The bill also specifies that growth units generated by the charter school will be paid directly to

the charter school.

Significant Issues

This bill changes the distribution of the State Equalization Guarantee to some charter schools

whose growth in total school membership on the 40

th

day is equal to or exceeds one percent.

Currently, charter schools are not eligible for enrollment growth units under the funding formula.

Revenue earned by a charter school for growth will be paid directly to the charter school. This

bill supports PEDs and the Governor’s initiatives.

Senate Bill 274 -- Page 2

The LESC and LFC have both recommended a public school funding formula study in FY2006;

changes to the funding formula should wait until the study is complete and changes proposed to

the Legislature during the 2006 session.

FISCAL IMPLICATIONS

Changes to the public school funding formula modify the distribution of the state equalization

guarantee to school districts and charter schools.

OTHER SUBSTANTIVE ISSUES

This bill will allow a charter school to earn growth units; however, a similar sized school grow-

ing just as fast may not if its school district is not growing overall.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

The funding formula will remain unchanged.

POSSIBLE QUESTIONS

1.

Can this change to the funding formula be held in abeyance until a formula study is com-

pleted and recommendations made to the 2006 Legislature.

2.

How many charter schools would qualify for growth units based upon the 2005-06 school

year 40

th

day data.

GAC/lg