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

SPONSOR Salazar

ORIGINAL DATE

LAST UPDATED

02/1/06

02/09/06 HB 342/aHEC

SHORT TITLE

Northern Nm State School Salary Increases

SB

ANALYST Moser

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$3,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates Appropriation in the General Appropriation Act

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

NM Higher Education Department (NMHED)

SUMMARY

Synopsis of HEC Amendment

The House Education Committee amendments are technical in nature changing the term “state

school” to “college” as used in addressing the name of Northern New Mexico College.

Synopsis of Original Bill

HB342 appropriates $3,000,000 from the General Fund to the Board of Regents of Northern

New Mexico College for expenditure in FY06 and FY07 to raise faculty and staff salaries by ap-

proximately 51%. Any unexpended or unencumbered balance remaining at the end of FY07 shall

revert to the General Fund. The bill carries an emergency clause and would take effect immedi-

ately upon executive approval.

House Bill 342/aHEC – Page

2

FISCAL IMPLICATIONS

HB342 contains a $3,000,000 appropriation for expenditure in both FY06 and FY07 to raise fac-

ulty and staff salaries at NNMC by 51 percent. Because this is a salary increase this would be

considered a recurring expense.

HB 2/aHAFC appropriates 4.5 percent in compensation increases to faculty and staff of four- and

two-year public post-secondary educational institutions in addition to appropriating a 0.75 per-

cent increase in the employer contribution to the Educational Retirement Fund. This bill appears

to grant a 51 percent increase in addition to the 4.5% salary increase adjustment of HB2/aHAFC.

SIGNIFICANT ISSUES

HB342 is specific only to NNMC and would not apply to nursing faculty in other two-year

to four-year higher education facilities.

HB342 contains a $3,000,000 multi-year special appropriation for expenditure in both FY06 and

FY07 to raise faculty and staff salaries at Northern New Mexico State School. NMHED points

out that the official name of the school is Northern New Mexico College (NNMC). During the

2005 legislative session, Governor Richardson signed into law duplicate bills that changed the

name from Northern New Mexico State School to NNMC to signify its transition from two-year

to four-year status beginning in FY06. NMHED suggests an amendment to clarify this point (See

Alternatives).

The NMHED indicates that the New Mexico Association of Community Colleges (NMACC)

recently issued its report on Faculty and Staff Salary Comparisons for 2004-2005 with data self-

reported by the 2-year institutions and compared against data supplied by both the Chronicle of

Higher Education (CoHE) and the American Association of University Professors (AAUP).

Since NNMC was still a two-year institution in FY05, the report mainly compares its fac-

ulty/staff salaries against those of other two-year schools, but there are some comparisons with

the four-year schools in New Mexico as well.

The study showed NNMC's mean salary for faculty was $39,508--which was $20,109 less than

the mean salary at other New Mexico universities (including both two- and four-year institu-

tions). Additionally, the report showed NNMC faculty salaries averaging $25,300 for those with

a bachelor's degree; $29,100 for those with a master's degree; and $30,800 for those with a doc-

torate.

NMHED also indicates that its data shows salaries based on rank cannot be compared with other

institutions since NNMC reports only salaries for all faculty (without designation of rank) and

salaries of staff. NMHED used Integrated Post-secondary Education Data System (IPEDS) data

to compare NNMC faculty rank and salaries against those of the four-year state institutions that

serve rural populations (Western New Mexico University, Eastern New Mexico University and

New Mexico Highlands University). These data show the following:

NNMC

WNMU

NMHU

ENMU

Degrees

Bachelor's 5 12% $35,289 1 1% $30,024 0 0%

0 0%

Bachelor's 10 24% $32,016 3 4% $32,837 2 2% $41,000 2 2% $47,527

Master's 20 49% $40,138 23 28% $42,620 21 20% $44,832 23 28% $45,038

House Bill 342/aHEC – Page

3

Doctorate 6 15% $38,894 56 67% $48,458 83 78% $48,787 101 80% $51,545

Mean Salary

$39,429

Mean

Salary

$44,820

Mean

Salary

$44,873

Mean

Salary

$50,294

NMHED concludes that based on these comparisons, the mean salaries of the comparison four-

year institutions are higher due to the higher number of faculty with advanced degrees who con-

sequently receive higher salaries. Salaries for individuals with bachelor's or lower than bachelor's

degrees at WNMU are comparable to those of faculty at NNMC. Mean salaries for individuals

from NNMC, WNMU and NMHU are comparable. Some adjustments may need to be made for

individuals with bachelor's and doctoral degrees at NNMC. The comparison institution with the

highest salary for faculty according to rank is ENMU. Across the institutions the significant dis-

parities reported by the NMACC are not apparent.

The comparison of faculty salaries also cannot be made without distinguishing the curricula

taught by the different faculty. For example, at NNMC, faculty are primarily teaching lower di-

vision courses, whereas the faculty at the comparison institutions are teaching a combination of

lower division, upper division, and graduate courses. Finally, research and other faculty require-

ments, including the number of students served (teaching and advising), need to be considered

when comparing faculty salaries.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

HB342 relates to SB177, HB2/aHAFC, as well as SB1.

ALTERNATIVES

NMHED suggests that NNMC can submit a salary adjustment plan for study and review by

NMHED, the Legislative Finance Committee (LFC), and the Department of Finance and Ad-

ministration (DFA). Given the significance of this increase, a study is recommended to deter-

mine the financial impact not only on the NNMC salary structure, but on the overall higher edu-

cation funding formula. NMHED will be initiating a complete salary study of faculty and staff at

all institutions.

NMHED recommends that the submission of a salary adjustment plan by NNMC not occur until

the salary study is completed by NMHED.

NMHED recommends that the bill be amended as follows:

•

Delete "State School" and add the word "College" as the official name of the institution is

Northern New Mexico College (NNMC). During the 2005 legislative session, Governor

Richardson signed into law duplicate bills (SB594) Laws 2005, Ch. 304, 47th Legisla-

ture, 1st Session and, (HB461) Laws 2005, Ch. 308, 47th Legislature, 1st Session, that

changed the name to signify the transition from a two-year to four-year institution begin-

ning in FY06.

GM/mt:nt