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.

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

SPONSOR Stewart

ORIGINAL DATE

LAST UPDATED

1/23/2007

3/12/2007 HB 35/aHEC/aHAFC

SHORT TITLE School Principal Salary Calculation Changes

SB

ANALYST Aguilar

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

** NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

** LESC analysis received 3/12/2007 indicates that appropriations contained in House Bill

2 are sufficient to implement the provisions of this bill with no additional funding.

Duplicates Senate Bill 73

Duplicates appropriations contained in House Bill 2

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Education Department (PED)

Office of Educational Accountability (OEA)

SUMMARY

Synopsis of HAFC Amendment

The House Appropriations and Finance Committee amendment to House Bill 35 as amended

removes the appropriation.

Synopsis of HEC Amendment

The House Education Committee amendment to House Bill 35 adds language which includes as

part of principal evaluations a tie to student achievement and progress on the educational plan for

student success.

House Bill 35/aHEC/aHAFC – Page

2

Synopsis of Original Bill

House Bill 35 appropriates $4.2 million from the general fund to the public school fund for

distribution through the state equalization guarantee to implement minimum salaries for

principals and assistant principals in the 2007-2008 school year.

House Bill 35 amends existing statute by:

•

Adding a definition of “responsibility factor" and assigning multipliers to be used in

determining salary minimums;

•

Providing that in order to receive a level 3-B (administrator) license a “teacher" rather

than an “instructional leader" must have held a level 3-A license for at least one year;

•

Removing school size and adding a responsibility factor as the criteria for determining

salary minimums for principals and assistant principals;

•

Providing that the $50,000 minimum salary for level 3-A teachers be used as the base for

applying the responsibility factor, and;

•

Requiring that by the beginning of the 2008-2009 school year, a uniform standard of

evaluation be implemented.

FISCAL IMPLICATIONS

The appropriation of $4.2 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of fiscal year 2008 shall revert

to the general fund.

Estimates made by LFC and LESC indicate that $4.2 million would be sufficient to implement

the minimums contained in the bill assuming no salary increases. As compensation

appropriations increase, this amount would decrease.

Existing statute, based on school size, would require approximately $750 thousand to implement

minimums.

The public school support recommendation from the executive does not recommend funding for

principals using a responsibility factor nor does it recommend minimum salaries for assistant

principals.

SIGNIFICANT ISSUES

Since the implementation of the three-tier salary structure for teachers, concerns have been raised

that principal’s and assistant principals’ salaries were not keeping pace with increases in teacher

salaries and a number of administrators were returning to the classroom causing a shortfall in

available candidate pools. The Office of Educational Accountability notes that a number of

studies have identified school leadership as second only to teaching among school-related factors

that affect student achievement. Recent research by the OEA indicates a high turnover rate of

principals in the New Mexico schools in need of improvement and there is widespread concern

that fewer experienced educators will choose to become or remain principals if they can make as

much or more money by staying in the classroom.

House Bill 35 attempts to address these concerns by implementing an evaluation system for

House Bill 35/aHEC/aHAFC – Page

3

principals and by including a responsibility factor that ensures principals’ and assistant

principals’ minimum salaries are always higher than the highest proposed minimum salaries

($50,000) for Level 3 teachers.

The bill also replaces the term “instructional leader" with the word “teacher" as a technical

correction to statute. Under provisions of the Public School Code “instructional leader" is not

defined as an educational position.

Minimum salaries would be as follows:

Elementary School Principals, $60,000

Middle School Principals, $70,000

High School Principals, $80,000

Elementary School Assistant, $55,000

Middle School Assistant, $57,500

High School Assistant, $62,500

ADMINISTRATIVE IMPLICATIONS

PED has indicated it will require as much as $400 thousand to develop the evaluation system yet

in testimony before LESC the department indicated it had utilized $150 thousand from the

Teacher Professional Development Fund and $60 thousand in funds received from the Wallace

Foundation to begin development of the system. It appears the agency is well on its way to

developing the evaluation system and may not require additional funding.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

House Bill 35 duplicates Senate Bill 73 and relates to appropriations contained in House Bill 3.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Salary minimums currently in statute based on school size would take effect on July 1, 2007.

PA/nt:csd:mt