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

SPONSOR Nava

ORIGINAL DATE

LAST UPDATED

2/15/2007

HB

SHORT TITLE

Economics & Personal Finance Education Center

SB 926

ANALYST Moser

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$300.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

NM Department of Higher Education (HED)

Public Education Department (PED)

SUMMARY

Synopsis of Bill

Senate Bill 926 appropriates $300,000 from the General Fund to the Board of Regents of New

Mexico State University (NMSU) to pay for the Center for Economics and Personal Finance

Education.

FISCAL IMPLICATIONS

The appropriation of $300,000 contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of (FISCAL YEAR) shall revert

to the general fund.

SIGNIFICANT ISSUES

PED reports that New Mexico schools, under the prevailing Content and Performance Standards

and Benchmarks in the Social Studies strand, administered by the PED, are mandated to impart

training in economics and personal finance education at all levels, K-12. These standards require

the teaching of a high school economics course and the testing of high school students as a con-

Senate Bill 926 – Page

2

dition for graduation. Additionally, federal No Child Left Behind legislation imposes on states

the testing of economics concepts as one of the 10 critical core areas (along with reading, mathe-

matics, science, etc.).

NMSU conducted studies related to economic and personal finance literacy of students in New

Mexico schools and found that students struggle with meeting the standards for a variety of rea-

sons. Its research shows that universities need to meet the challenge and assist the state in filling

important gaps in the teacher preparation programs. A large proportion of teachers certified to

teach in social studies have not taken sufficient hours of undergraduate economics (micro and

macro economics). Accordingly, the corps of teachers in New Mexico most eligible to teach

economics that aligns with standards is inadequately trained. Second, instruction in the K-8

years in the areas of economics and personal finance rarely occurs on a systematic basis. Thus,

K-8 students move into the high school years unprepared to receive instruction in economics and

personal finance that aligns with standards.

NMSU indicates that less than 50% of enrolled undergraduates elect to take undergraduate eco-

nomics. This leads to many college graduates, in the days of globalization, entering the job mar-

ket unprepared to compete with similarly situated students in other states who do possess knowl-

edge of important concepts such as exchange rates and the effects of monetary policy on interna-

tional capital investments. Evidence also shows that Advanced Placement (AP) economics was

offered in only four high schools throughout the State in 2005-2006. This statistic stands in sharp

contrast to the offering of AP courses in other areas such as history and mathematics.

The Center for Economics and Personal Finance at NMSU has been in existence since May

2005, when it received its charter from the National Council on Economics Education. Since

then, it has hosted 17 teacher training workshops for high school teachers. Under contract with

the PED, the Center also created a web-based curriculum for high school economics

(http://cepfe.nmsu.edu) that translates the prevailing standards and benchmarks into lesson plans

and makes them available throughout the state over the Internet. The Center has also formed sev-

eral important alliances that include the Federal Reserve Bank of Dallas, the Federal Reserve

Bank of Kansas City, the National Council on Economics Education, the network of over 225

university-based Centers across the nation and the PED.

NMSU reports that the appropriation would enable the Center to strengthen its work with teach-

ers, especially those teachers in hard to reach rural and border areas, and with tribal schools.

Additionally, the Center would start the slow process of advocating and promoting K-8 econom-

ics and personal finance education, create a master teacher corps of teachers in economics that

would mentor other teachers, promote interest in the student body by a series of competitions,

involve parents and move toward a comprehensive teacher preparation in AP economics.

HED reports that the primary goal of the Center for Economics and Personal Finance (CEPFE) is

to bridge the gap between what students need to know about economics and what they are being

taught in school. In 2005 over 2,000 students in grades 9-12 took an economics survey in the

form of a quiz which covered topics such as scarcity, allocation of goods and services, role of

competition, role of money, and specialization and trade..

According to the director of CEPFE, this appropriation would supplement the existing operating

budget and assist the center with a number of new initiatives as they work to address the statis-

tics above. Specifically, this appropriation would be used for the following:

Senate Bill 926 – Page

3

•

Teacher training workshops.

•

Expand outreach to K-8 populations in the state.

•

Design and implement a parental involvement project per a request from Senator Nava.

•

Design and implement a web-based curriculum for grades K-8 which models the curricu-

lum that has been designed for high schools.

•

Distribute the curriculum and materials that integrate and interface with the web-based

training.

•

Any remaining fund would be used for travel and assistantships.

This request was not on the list of priority projects submitted by NMSU to the New Mexico

Higher Education Department (NMHED) for review and was not included in the Departments

funding recommendations for FY08.

GM/nt