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

SPONSOR Komadina

DATE TYPED 2/28/05

HB

SHORT TITLE Funding For New School Openings

SB 811

ANALYST Hanika-Ortiz

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$1,000.0

Recurring General Fund

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

$1,000.0

Recurring New Schools Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Public Education Department (PED)

SUMMARY

Synopsis of Bill

Senate Bill 811 amends the Public School Finance Act, creates the New Schools Fund in the

state treasury and appropriates $1 million from the general fund to the New Schools Fund in

FY05 and subsequent fiscal years. Any unexpended or unencumbered balance remaining at the

end of a fiscal year will not revert to the general fund.

Significant Issues

This bill creates the new schools fund. The fund will consist of appropriations, income from in-

vestment of the fund, gifts, grants, donations and any other money credited to the fund.

Senate Bill 811-- Page 2

The fund is to be administered by the PED to assist school districts in start-up costs for new

schools that are not charter schools.

School districts may apply to the PED for money from the fund to pay for start-up costs, includ-

ing employment of staff, furnishings and equipment, technology, instructional materials and li-

brary resources.

PERFORMANCE IMPLICATIONS

SB 811 will assist the PED to meet performance measures as recommended by the Legislative

Finance Committee (LFC).

FISCAL IMPLICATIONS

The appropriation of $1 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert

to the general fund.

SB 811 creates the “New Schools Fund” and provides for continuing appropriations. The LFC

objects to including continuing appropriation language in the statutory provisions for newly cre-

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

The report from the LFC for FY05-06 recommended the PED concentrate on stabilizing current

program areas; improving oversight activities for the 89 districts, including data assessment, re-

porting, and financial accountability; and closing the achievement gap. It was also recommended

that this be accomplished with available resources and might require the redirection of resources

and the prioritizing of programs. States and public school districts nationwide are increasingly

focusing on effective administration in education to direct the maximum funding possible to the

classroom.

The President’s FFY06 budget request shows an overall reduction of public school education

funding by $2.8 million. However, Title I funding is increased by 2.8% to help disadvantaged

students overcome educational barriers to a total program of $112.5 million. Special education is

also increased 4.3% to a total of $87.8 million for supplemental services for special education

students and students with disabilities. These funds particularly have been increasing yearly from

2000 and have more than doubled. However, New Mexico is near the bottom on almost every

compliance measure related to special education. This brings the federal commitment to 19% of

per pupil expenditure.

ADMINISTRATIVE IMPLICATIONS

The PED must develop an application process and establish a rule for the process and can do so

with existing staff and resources.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Relates to the appropriation for the New Mexico PED in the General Appropriation Act.

Senate Bill 811-- Page 3

TECHNICAL ISSUES

The PED recommends an emergency clause be added to the bill.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

Districts will not have additional resources for costs associated with new schools.

AHO/lg:yr