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

SPONSOR Lopez

DATE TYPED 02/23/05 HB

SHORT TITLE Second Semester for Education Works Program

SB 691

ANALYST Weber

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

SUMMARY

Human Services Department

Synopsis of Bill

Senate Bill 691 amends a section of the Education Works Act, Section 27-2D-4 E, NMSA 1978

(being Laws 2003, Chapter 317, section 4), changing the time limit for participation in the Edu-

cation Works Program. Current statute limits participation in the program for no more than

twenty-four months, except that a recipient may participate in the Education Works Program for

one additional term following the twenty-four month limit if doing so will result in the recipient

earning a degree. New language would a allow for a recipient to participate for two additional

academic terms following the twenty-four month limit if doing so will result in a degree and at

the discretion of the Director.

Significant Issues

The following is contributed by the Human Services Department.

SB 691 does not include any appropriation for the Education Works Program for allowing for

Senate Bill 691 -- Page 2

participation beyond the twenty-four month limit. Since there are no additional funds for the

program, recipients participating beyond twenty-four months may limit the number of slots

available for new participants into the program that is currently set at 500 statewide.

The proposed language indicates a second term is based on the recipient earning a degree and at

the discretion of the director, which in the definitions section of the act is the Director of the In-

come Support Division. The conditions for discretion are not defined, which allows for varied

reasons to limit participation two additional terms beyond the twenty-four month period such as

fiscal, high participation of new enrollments into the Program, and other reasons determined ap-

propriate by the Director.

Currently, there are 500 slots available for the Education Works Program at an annual FY $2

million budget. During State Fiscal Year FY04, there was a monthly participant average of 450

participants in the program with a FY expenditure of $1,874,132.

Preliminary data from the Human Services Department work program contractors indicates that

during state FY04 there were 43 graduation degrees obtained by participants in the program.

Approximately 63% of participants have obtained employment with an average annual income of

$22,522.

Individuals who meet eligibility criteria may also participate in secondary vocational education

in the New Mexico Works Program in accordance with New Mexico Works Act, Section 27-

2B-5, NMSA 1978 (being Laws 1998, Chapter 8), which limits education as a primary work ac-

tivity to no more than 12 months and allows education as a secondary activity without restriction.

FISCAL IMPLICATIONS

With the annual current budget set by an appropriation of temporary assistance for needy fami-

lies funds, the amount available for this program is fixed. Extension of the time limit for partici-

pation may limit the availability of new positions for the program. As suggested by HSD the

current annual spending is near the annual appropriation making this scenario possible. Only

state maintenance of effort funds are available for this program as federal funds are not allowed

by TANF regulation.

MW/lg:yr