SENATE JOINT MEMORIAL 27

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

George K. Munoz

A JOINT MEMORIAL

REQUESTING THE LEGISLATIVE FINANCE COMMITTEE, TOGETHER WITH THE LEGISLATIVE EDUCATION STUDY COMMITTEE, THE PUBLIC SCHOOL CAPITAL OUTLAY COUNCIL AND THE PUBLIC EDUCATION DEPARTMENT, TO CONDUCT A THOROUGH STUDY OF THE PUBLIC SCHOOL CAPITAL OUTLAY FUNDING FORMULA AS IT HAS EVOLVED SINCE ITS ENACTMENT IN 2001 AND ASSESS WHETHER THE FUNDING FORMULA IS MEETING THE REQUIREMENTS OF ARTICLE 12, SECTION 1 OF THE CONSTITUTION OF NEW MEXICO.

     WHEREAS, in 1973, the United States supreme court found, in San Antonio Independent School District v. Rodriguez, that a free public education was not a federal constitutional right; and

     WHEREAS, in a dissenting opinion, however, one of the justices stated that "nothing in the Court's decision. . . should inhibit further review of State educational funding schemes under State constitutional provisions"; and

     WHEREAS, Article 12, Section 1 of the constitution of New Mexico provides that a "uniform system of free public schools sufficient for the education of, and open to, all children of school age in the state shall be established and maintained"; and

     WHEREAS, New Mexico courts have not yet specifically construed the meaning of either "uniform" or "sufficient" in this constitutional provision; and

     WHEREAS, in 1974, New Mexico was one of the first states in the nation to adopt a school financing system to fund operational expenses; and

     WHEREAS, this system became a national model of equitable school finance and was based on a studied, deliberate attempt to create an equitable system; and

     WHEREAS, this system applied, however, only to funding a school district's operational expenses and not capital outlay expenses; and

     WHEREAS, for nearly the next three decades, New Mexico had two separate financing systems for funding its schools: operational expenditures, which were dependent on the combined wealth of the entire state divided equitably among all school districts; and capital outlay funding, which was dependent almost entirely on local property tax wealth, an inherently unequal method for funding school expenses; and

     WHEREAS, at that time, the state took credit in its state equalization guarantee for ninety-five percent of school districts' impact aid funds, which are federal funds provided to school districts in lieu of property taxes for children living on or near tribal and federal lands; and

     WHEREAS, as a result, the affected school districts were left with only five percent of impact aid funds for capital outlay expenses; and

     WHEREAS, establishing an equitable method for distributing operational funds had, some asserted, resulted in a unequal effect on capital outlay funding for school districts with little taxable property; and

     WHEREAS, a 1998 study of New Mexico school facilities by a nationally recognized research organization revealed a one-billion-five-hundred-million-dollar ($1,500,000,000) deficiency statewide for public schools; and

     WHEREAS, in 1998, three school districts, the Zuni, Gallup-McKinley county and Grants-Cibola county school districts, filed suit in state district court; and

     WHEREAS, the plaintiff school districts based their suit on the premise that the state's financing of public school capital outlay needs violated rights under the constitution of New Mexico's guarantee of a "uniform" system "sufficient" for the education of all the state's children; and

     WHEREAS, the school districts argued that all they were seeking was a system that approached equity in the funding of capital improvements; and

     WHEREAS, in 1999, State District Court Judge Joseph L. Rich granted the plaintiffs' motion for a partial summary judgement and held that the then-current system for funding capital improvements violated Article 12, Section 1 of the constitution of New Mexico and ordered the state to "establish and implement a uniform funding system for capital improvements" and to correct "existing current inequities"; and

     WHEREAS, when the state appeals court denied the state's request for an appeal, the legislature established the public school capital outlay task force, which had the task of designing a new public school capital outlay funding system; and

     WHEREAS, the task force chose as its guiding philosophy the concept of adequacy, which was defined as the minimum acceptable level for the physical condition and capacity of school buildings, the educational suitability of education facilities and the need for technological infrastructure; and

     WHEREAS, the task force did consider equity, but because equity did not necessarily result in equal education, the task force endorsed the concept of adequacy and recommended that to the legislature; and

     WHEREAS, in 2001, the legislature passed a measure that covered both the short-term deficiencies and the long-term critical capital outlay needs with funding for public school capital outlay projects being shared between school districts and the state on a formula basis, with awards granted to school districts based on adequacy standards; and  

     WHEREAS, later in 2001, the court appointed a special master to review the state's progress in developing a uniform system for public school capital improvements; and

     WHEREAS, the following year, after having conducted hearings to take testimony, the special master found that the legislature had passed "one of the most dramatic actions ever taken by the state to remedy disparities of capital funding" and "is in good faith and with substantial resources, attempting to comply with requirements" of the court; and

      WHEREAS, the special master also found that "because the use of direct [legislative] appropriations necessarily removes substantial funds from the capital outlay process where merit and need on a priority basis dictate how funds are to be distributed, the state should take into account in its funding formula these appropriations as an element thereof"; and

     WHEREAS, Judge Rich ordered the approval of the special master's report; and

     WHEREAS, the judge's order recognized that the legislature had made some progress and should continue its work but reserved the right to review subsequent legislative activity; and

     WHEREAS, in a 2007 article in the New Mexico Law Review entitled "No Cake for Zuni: The Constitutionality of New Mexico's Public School Capital Finance System", the late Lynn Carillon Cruz made a strong case for reviewing and making changes to the public school capital outlay funding formula; and

     WHEREAS, no further judicial review of the Zuni lawsuit occurred, except for status conferences held in March 2006 and March 2014, until July 2015, when the Gallup-McKinley county school district filed an unopposed motion to amend the original complaint; and

     WHEREAS, in the amended complaint the plaintiffs asserted that the "adequacy standards" for public school construction as established and amended by the public school capital outlay council violated Article 12, Section 1 of the constitution of New Mexico because they were not sufficient for the education of all the children of school age; and

     WHEREAS, among the necessary costs to make facilities sufficient for students in the plaintiff school districts that were not covered in the adequacy standards were the following:

          A. extension of utilities to school construction sites in isolated rural areas;

          B. construction and maintenance of teacherages for schools in isolated rural areas;

          C. required payment of the Navajo business tax for construction on Navajo tribal lands;

          D. security measures that are more secure than magnetic locks, which are required in the adequacy standards;

          E. fixtures, furniture and equipment that are not included in the adequacy standards; and

          F. athletic fields beyond multipurpose practice fields; and

     WHEREAS, other costs to meet standards required by the state of New Mexico and the federal government include the following:

          A. facilities for Navajo language and culture classes required by the state's Indian Education Act;

          B. federally required Title IX athletic fields;

          C. facilities required for pre-kindergarten-related parent education programs;

          D. facilities for "response-to-intervention" at-risk students; and

          E. computers and computer stations for mandated computer-based assessments; and

     WHEREAS, the plaintiff school districts also assert that the current adequacy standards do not establish an "acceptable level for the physical condition and capacity of buildings, the educational suitability of facilities and the need for technological infrastructure" as required by statute; and

     WHEREAS, in addition, the plaintiff school districts assert that the state-share portion of the public school capital outlay funding formula is skewed to benefit property-tax-rich school districts, allowing them to regularly exceed adequacy standards, while property-tax-poor school districts do not have the same ability; and

     WHEREAS, as examples, the plaintiffs cite amounts of funding for above-adequate facilities that are bigger, more specialized and more amenity-filled in the Albuquerque, Clovis municipal, Eunice, Hobbs municipal and Ruidoso municipal public school districts; and

     WHEREAS, the complaint also asserts that some school districts receive substantial capital outlay funding through direct legislative appropriations, while the Gallup-McKinley county and Zuni public school districts receive none; and

     WHEREAS, the complaint also asserts that "Gallup-McKinley and the individual plaintiffs are victims of discrimination and are being denied the uniform and sufficient education rights, opportunities and protection mandated by Article 12, Section 1, of the state constitution"; and

     WHEREAS, in late 2016, the eleventh judicial district court held evidentiary hearings in Gallup; and

     WHEREAS, the case has been continued until spring 2017;      NOW, THEREFORE, BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO that the legislative finance committee, together with the legislative education committee, the public school capital outlay council and the public education department, be requested to conduct a thorough study of the New Mexico public school capital outlay funding formula as it relates to the requirements of Article 12, Section 1 of the constitution of New Mexico and report its findings to the legislature and the governor before the second session of the fifty-third legislature; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the directors of the legislative finance committee and the legislative education study committee, the chair of the public school capital outlay council and the secretary of public education.

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