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

SPONSOR Cisneros

ORIGINAL DATE

LAST UPDATED

1/30/08

HB

SHORT TITLE Northern NM State School Salary Increases

SB 253

ANALYST Haug

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$332.3

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Higher Education Department (HED)

SUMMARY

Synopsis of Bill

Senate Bill 253 appropriates $332.3 from the general fund to the Board of Regents of Northern

New Mexico State School (now Northern New Mexico College) to increase faculty and staff

salaries to a level closer to peer institutions.

FISCAL IMPLICATIONS

The appropriation of $332.3 contained in this bill is a recurring expense to the general fund. Any

unexpended or unencumbered balance remaining at the end of fiscal year 2009 shall revert to the

general fund.

This request was not submitted by NNMC to NMHED for review and was not included in the

Department’s funding recommendation for FY09.

Senate Bill 253 – Page

2

SIGNIFICANT ISSUES

The HED states:

The purpose of SB253 is to make faculty salaries at NNMC comparable to those offered

at other state institutions of higher education. NNMC hopes to double its student

population in five years and increase its number of faculty by 25% in the same period. In

order to attain this goal, NNMC not only hopes to retain its current faculty, which is

aging and approaching retirement age, but also attract new faculty.

The New Mexico Higher Education Department (NMHED) conducted a faculty salary

study in 2006. NMHED estimates that correcting the current difference between salaries

at New Mexico institutions and their peer averages will require an estimated $25,218,000

in additional funding. Assuming this will occur over 4 years, additional funds will be

required to offset an anticipated salary inflation of 3.5%, bringing the amount to

approximately $28,750,000. This will require an annual allocation of $7,200,000 to allow

the institutions to approximate the average salaries of their peers. All values assume the

inclusion of benefits in the calculations.

The NMHED report further noted that the case of NNMC is unique in that the institution

is in transition as it expands its mission to include degrees beyond the associate's level.

Currently, it offers a primarily lower division curriculum, with a typical community

college faculty; that is, a faculty with fewer terminal degrees than other comprehensive

institutions. All faculty are classified as instructors and salaries are in line with instructors

at other comprehensive institutions. Five new bachelor's degrees have been approved and

NNMC is planning to propose a number of bachelors’s and graduate programs in the near

future. Faculty with terminal degrees will be required for these programs. It is expected

that these new faculty members will be hired at the peer average for assistant professors

at other comprehensive universities. Based on this assumption, the salaries required for

NNMC will be approximately $1.9 million dollars for 32 additional faculty by 2009.

Nonetheless, NMHED's study found that current NNMC faculty members are primarily

instructors and that there is no current salary discrepancy between faculty of that rank at

other comprehensive universities in the state. It is not known how many of the faculty has

terminal degrees or could be classified at the assistant professor level. Without this

information, it is not known whether the request in this appropriation elevates the salaries

of instructional faculty without terminal degrees beyond that of similar faculty at other

comprehensive institutions.

GH/jp