HB0077

HOUSE BILL 77

54th legislature - STATE OF NEW MEXICO - first session, 2019

INTRODUCED BY

Roberto “Bobby” J. Gonzales and Jacob R. Candelaria

AN ACT

RELATING TO PUBLIC SCHOOL FINANCE; LIMITING THE GROWTH OF ADMINISTRATIVE EXPENDITURES BY SCHOOL DISTRICTS AND CHARTER SCHOOLS; DECLARING AN EMERGENCY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 22-8-2 NMSA 1978 (being Laws 1978, Chapter 128, Section 3, as amended) is amended to read:

"22-8-2. DEFINITIONS.--As used in the Public School Finance Act:

A. "ADM" or "MEM" means membership;

B. "administrative expenditures" means expenditures for general administrative support services, central services, operation and maintenance of plants and other support services designated as the 2300, 2500, 2600 and 2900 functions in the department's chart of accounts for expenditures;

C. "consumer price index" means the average of the monthly consumer price indexes for a calendar year for the entire United States for all items as published by the United States department of labor;

[B.] D. "membership" means the total enrollment of qualified students on the current roll of a class or school on a specified day. The current roll is established by the addition of original entries and reentries minus withdrawals. Withdrawals of students, in addition to students formally withdrawn from the public school, include students absent from the public school for as many as ten consecutive school days; provided that withdrawals do not include students in need of early intervention and habitual truants the school district is required to intervene with and keep in an educational setting as provided in Section 22-12-9 NMSA 1978;

[C.] E. "basic program ADM" or "basic program MEM" means the MEM of qualified students but excludes the full-time-equivalent MEM in early childhood education and three- and four-year-old students receiving special education services;

[D.] F. "cost differential factor" is the numerical expression of the ratio of the cost of a particular segment of the school program to the cost of the basic program in grades four through six;

[E.] G. "department" or "division" means the public education department;

[F.] H. "early childhood education ADM" or "early childhood education MEM" means the full-time-equivalent MEM of students attending approved early childhood education programs;

[G.] I. "full-time-equivalent ADM" or "full-time- equivalent MEM" is that membership calculated by applying to the MEM in an approved public school program the ratio of the number of hours per school day devoted to the program to six hours or the number of hours per school week devoted to the program to thirty hours;

[H.] J. "operating budget" means the annual financial plan required to be submitted by a local school board or governing body of a state-chartered charter school;

[I.] K. "program cost" is the product of the total number of program units to which a school district is entitled multiplied by the dollar value per program unit established by the legislature;

[J.] L. "program element" is that component of a public school system to which a cost differential factor is applied to determine the number of program units to which a school district is entitled, including MEM, full-time-equivalent MEM, teacher, classroom or public school;

[K.] M. "program unit" is the product of the program element multiplied by the applicable cost differential factor;

[L.] N. "public money" or "public funds" means all money from public or private sources received by a school district or state-chartered charter school or officer or employee of a school district or state-chartered charter school for public use;

[M.] O. "qualified student" means a public school student who:

(1) has not graduated from high school;

(2) is regularly enrolled in one-half or more of the minimum course requirements approved by the department for public school students; and

(3) in terms of age:

(a) is at least five years of age prior to 12:01 a.m. on September 1 of the school year;

(b) is at least three years of age at any time during the school year and is receiving special education services pursuant to rules of the department; or

twenty-second birthday on the first day of the school year and is receiving special education services pursuant to rules of the department;

[N.] P. "staffing cost multiplier" means:

(1) for fiscal year 2019, the instructional staff training and experience index;

(2) for fiscal year 2020, the weighted average of the instructional staff training and experience index at seventy-five percent and the teacher cost index at twenty-five percent;

(3) for fiscal year 2021, the weighted average of the instructional staff training and experience index at fifty percent and the teacher cost index at fifty percent;

(4) for fiscal year 2022, the weighted average of the instructional staff training and experience index at twenty-five percent and the teacher cost index at seventy-five percent; and

(5) for fiscal year 2023 and subsequent fiscal years, the teacher cost index; and

[O.] Q. "state superintendent" means the secretary of public education or the secretary's designee."

SECTION 2. A new section of the Public School Finance Act is enacted to read:

"[NEW MATERIAL] LIMITING THE GROWTH OF ADMINISTRATIVE EXPENDITURES.--

A. For the 2019-2020 school year operating budget and subsequent school year budgets, a school district or charter school's administrative expenditures shall not exceed the prior year's administrative expenditures plus the lesser of:

(1) a percentage of the prior year's administrative expenditures less than or equal to the consumer price index for the prior calendar year; or

(2) a percentage of the prior year's administrative expenditures less than or equal to the percentage increase in the state equalization guarantee distribution for the current fiscal year compared with the prior fiscal year.

B. The department may waive the limitation on growth of administrative expenditures for a school district or charter school that either:

(1) has administrative expenditures per student that are lower than the administrative expenditures of ninety percent of similarly sized districts or charter schools; or

(2) is ranked in the top ten percent of school districts or charter schools for student performance.

C. Prior to requesting a waiver from the department, the school district or charter school shall hold a public hearing and the local school board or governing body shall approve the waiver request by an affirmative vote of at least two-thirds of the local school board or governing body members.

D. By December 1 of each year, the department shall issue a report on the percentage of each school district's and charter school's spending that consisted of administrative expenditures during the prior school year. The report shall also include a list of school districts or charter schools that received a waiver on the limitation on growth of administrative expenditures. The report shall be prominently posted on the department's website.

E. The department may promulgate rules to implement the provisions of this section."

SECTION 3. Section 22-8-9 NMSA 1978 (being Laws 1967, Chapter 16, Section 63, as amended) is amended to read:

"22-8-9. BUDGETS--MINIMUM REQUIREMENTS.--

A. A budget for a school district shall not be approved by the department that does not provide for:

(1) a school year and school day as provided in Section 22-2-8.1 NMSA 1978; [and]

(2) a pupil-teacher ratio or class or teaching load as provided in Section 22-10A-20 NMSA 1978; and

(3) the limitation on growth of administrative expenditures as provided in Section 2 of this 2019 act.

B. The department shall, by rule, establish the requirements for an instructional day, the standards for an instructional hour and the standards for a full-time teacher and for the equivalent thereof."

SECTION 4. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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