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 SFl

DATE TYPED 03/09/05 HB

SHORT TITLE High School Graduation Exam Standards

SB 647/SFlS

ANALYST Chabot

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

Public Education Department (DFA)

SUMMARY

Synopsis of Bill

Senate Bill 647 amends Section 22-13-1.1 NMSA 1978 (Graduation Requirements) to qualify

for high school graduation beginning in 2009-10 school year, the eleventh grade standards-based

academic performance test required by Section 22-2C-4 NMSA 1978 (Assessment and Account-

ability) will be used as the state graduation examination. Students not passing the test, shall re-

ceive a certificate indicating the credits earned and the grade completed. However, if the student

passes the 11

th

grade test within 5 years of leaving school, the student may receive a high school

diploma. The local school board must develop a next step plan to each high school student that

includes the requirements for receiving a high school diploma. Minor editing to align the statute

with PED are also included.

Significant Issues

DFA assesses “a growing number of state as requiring students to pass exit examinations in order

to receive high school diplomas. As of 2004, twenty states had mandatory exit exams in place

with another five phasing in such exams by 2009.” In addition, in the next several years, the

federal No Child Left Behind may require mandatory testing in 10

th

and 11

th

grades. However,

Senate Bill 647/SFlS -- Page 2

exit exams can have negative impacts on student motivation and persistence if they fail possibly

leading to increase dropouts. Proponents show that exit exams aligned to curriculum and state

standards with remedial assistance when needed can lead systematic improvement in student

achievement.

The substitute bill addresses PED’s concern about courts generally have held that three to five

years’ notice is required to meet due process requirements for changing graduation requirements

by implementing the change in 2009-2010.

PED is also concerned the bill could have an adverse impact of high school graduation rates as

happened when the passing score for the High School Competency Examination was raised by

25 points in 2000-2001.

PERFORMANCE IMPLICATIONS

The testing requirement may lead to better performance in student proficiency on criterion-

reference tests.

PED has a plan for the 11

th

grade assessment to replace the High School Competency Exam as

the state’s exit exam in Spring 2008.

FISCAL IMPLICATIONS

The bill has no appropriation; some administrative expenses may result from the testing require-

ment. PED assesses these costs will be substantial particularly if students are allowed multiple

retests until they pass. Costs are estimated at $60-80 per student and 55 percent of students sta-

tistically will score below proficiency in at least one area and will need to retest. The department

estimates 18,000 extra tests may be required at an additional cost of $1.3 million plus additional

costs for test administration. PED estimates its costs for contract administration at $70 thousand.

Without funding for this new requirement, districts will have to shift funding from other educa-

tional priorities.

ADMINISTRATIVE IMPLICATIONS

DFA points out test scores must be accurately recorded and results received in sufficient time to

allow remedial assistance if needed by a student.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

The High School Competency Examination will remain the exit exam for high school students.

POSSIBLE QUESTIONS

1.

If only the 11

th

grade test is used to determine graduation, will it be a disincentive to 12

th

grade students.

GAC/njw