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

SPONSOR Moore

ORIGINAL DATE

LAST UPDATED

1/21/2008

HB 56

SHORT TITLE

NMSU Cooperative Extension Service Station

SB

ANALYST McOlash

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$1,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico State University – Agriculture & Home Economics (NMSU-AEH)

New Mexico Higher Education Department (NMHED)

SUMMARY

Synopsis

House Bill 56 appropriates $1,000,000 from the General Fund for FY09 to the Board of Regents

for New Mexico State University (NMSU) to support the operation of NMSU's Cooperative

Extension Service (CES) and Agricultural Experiment Station (AES). NMSU indicates $500,000

would be directed to each entity.

FISCAL IMPLICATIONS

The appropriation of $1,000,000 contained in this bill is a recurring expense to the General Fund

Any unexpended or unencumbered balance remaining at the end of FY09 shall revert to the

General Fund.

SIGNIFICANT ISSUES

The NMSU Agricultural & Home Economics analysis indicates that:

Neither AES nor CES have received increases in funds to offset the increases in

costs to operate in the past eighteen years. The cost of fuel and petroleum based

House Bill 56 – Page

2

products has increased sharply over the past several years. The AES and CES

faculty and staff travel extensively throughout the state by automobile. The

relevancy of AES and CES work many times depends upon the ability of the

employees to be on site with farmers, ranchers, and with related value added

industries. Costs to operate demonstration farms includes fuel to operate

irrigation wells, farm equipment, purchase petroleum based fertilizers, etc.

This request was submitted by NMSU to the New Mexico Higher Education Department

(NMHED) for review and is included in the Department's funding recommendation for FY09.

The Legislative Finance Committee recommendation includes a $44.9 increase for the AES from

$15,230.9 (FY08) to $15,275.8 (FY09) and level funding of $12,257.8 for the CES.

OTHER SUBSTANTIVE ISSUES

The following table, provided by NMSU, illustrates the funding history in unrestricted funds for

AES and CES from fiscal year 1990 to fiscal year 2006:

Agricultural Experiment Station:

Revenues: FY 1990 FY 2006

State Appropriations $ 7,041,700 $ 13,547,904

Sales and Services $ 844,998 $ 1,585,367

Total $ 7,886,698 $ 15,133,271

Expenditures:

Personnel Service Costs $ 5,763,206 $ 11,401,424

Travel $ 220,675 $ 492,379

Operations Expenses $ 1,579,161 $ 3,284,611

Equipment $ 144,105 $ 444,029

Total Expenditures $ 7,707,147 $ 15,622,443

Increase in Unrestricted Funding from 1990 to 2006 92%

Increase in Non-Personnel Service Costs from 1990 to 2006 117%

Cooperative Extension Service:

Revenues: FY 1990 FY 2006

State Appropriations $ 5,169,600 $ 10,289,154

Sales and Services $ 12,404 $ 607,661

Total $ 5,182,004 $ 10,896,815

Expenditures:

Personnel Service Costs$ 4,250,875 $ 8,878,934

Travel $ 308,640 $ 652,512

Operations Expenses $ 536,975 $ 2,008,207

Equipment $ 85,690 $ 122,147

Total Expenditures $ 5,182,180 $ 11,661,800

Increase in Unrestricted Funding from 1990 to 2006 110%

Increase in Non-Personnel Service Costs from 1990 to 2006 199%

House Bill 56 – Page

3

While funding for personnel service costs have been secured, funding for the costs that are

unavoidable to any operation have caused a short fall in funding to maintain levels of service to

the citizenry of the state.

It is not clear from the NMSU data how operating revenues and costs have not been offset.

BM/bb