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

SPONSOR Begaye

ORIGINAL DATE

LAST UPDATED

02/04/08

HB 408

SHORT TITLE Native American Financial Literacy Program

SB

ANALYST Escudero

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$100.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Education Department (PED)

Higher Education Department (HED)

SUMMARY

Synopsis of Bill

House Bill 408 appropriates $100.0 from the general fund to the Indian Affairs Department

(IAD) for culturally appropriate financial literacy training for teens and adults of the Ramah

Chapter of the Navajo Nation.

FISCAL IMPLICATIONS

The appropriation of $100.0 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

According to HED, the New Mexico Higher Education Departments (NMHED) analysis of this

bill focuses on the higher education implications of the proposed legislation. Additional insight

may be obtained from other departments analyses.

House Bill 408 – Page

2

The New Mexico Ramah Chapter of the Navajo Nation seeks funding to conduct financial

literacy training for teens and young adults. According to Focus Foundation, an organization

conducing financial literacy training around New Mexico, there a number of money traps that

young people can fall into without financial education. Financial education includes

developing an understanding of how the economic world works and how best to deal with

financial matters after high school. This legislation proposes to ensure the development of

culturally appropriate financial literacy training to help teens and young adults from the

Ramah Navajo communities make educated financial decisions on such things as credit, home

buying, and general banking among other topics.

According to PED, in 2003 Congress established the Financial Literacy and Education

Commission (FLEC) through the passage of the Financial Literacy and Education Improvement

Act, which was created to "improve the financial literacy and education of persons in the United

States through development of a national strategy to promote financial literacy and education."

(

http://www.treas.gov/offices/domestic-finance/financial-institution/fin-

education/commission/

)

The U.S. government has established the website,

http://www.MyMoney.gov

dedicated to

teaching all Americans the basics about financial education. U.S. teens have enormous

purchasing power but often lack the skills to manage resources well.

http://www.fcs.uga.edu/ext/econ/youth.php

PERFORMANCE IMPLICATIONS

As stated by HED, HB408 does not indicate how performance outcomes will be measured.

However, being part of the existing statewide ABE system would assure quality control and

accountability for services offered. Annual ABE performance measures are negotiated with and

reported to Office of Vocational and Adult Education at the U.S. Department of Education.

ADMINISTRATIVE IMPLICATIONS

As stated by HED, the Indian Affairs Department would be responsible for administering these

funds. NMHED successfully administers a state allocation and a federal grant to operate ABE

programs in New Mexico.

OTHER SUBSTANTIVE ISSUES

According to PED, if this bill is enacted the Ramah Chapter may need to communicate with the

Navajo Nation and the Navajo Nation Department of Dine Education (DODE) regarding the hire

of highly qualified financial teaching staff to meet the financial educational needs of their

community.

Navajo Nation may also want to consider communicating with their tribal programs to identify

common financial goals that can be utilized in this process.

As financial literacy leads to better outcomes for individual consumers and for our economy

generally, continued effort in this area is highly desirable. Fortunately, given the current level of

interest in improving financial literacy and education both in the United States and

internationally, opportunities abound for cooperation and collaboration among public, private,

House Bill 408 – Page

3

academic and community institutions. Advances in technology also offer great promise for

improving the quality and delivery of financial information and for sharing of research and best

practices among financial education providers.

http://www.mtjumpstart.org/files/Bernankepressrelease.pdf

ALTERNATIVES

As stated by HED, an alternative to appropriating HB408 funds to the Indian Affairs Department

would be to flow the funding through NMHED and to take advantage of the existing ABE

accountability and professional development systems. NMHED's Adult Basic Education (ABE)

Division oversees programs around New Mexico that offer financial literacy instruction through

various classes. ABE programs serve people 16 years and older whose skills are below a 12th

grade equivalent. The NMHED ABE Division currently oversees four ABE programs offering

services near Ramah Navajo communities: University of New Mexico-Gallup, New Mexico

State University-Grants, Navajo Technical College, Yah-Ta-Hey Sage Lifelong Learning Center,

and Tepeyac Consortium Inc. These programs are accountable to NMHED which has instituted a

new state-of-the-art database, state-level policies, and fiscal procedures.

An additional alternative would be to seek non-state funding sources such as federal and private

funding.

PME/bb