SENATE BILL

55th legislature - STATE OF NEW MEXICO - second session, 2022

INTRODUCED BY

Roberto "Bobby" J. Gonzales

AN ACT

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

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

     SECTION 1. A new section of the Public School Finance Act is enacted to read:

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

          A. Beginning with the 2023-2024 school year operating budget, a school district or charter school shall not submit an operating budget for the ensuing fiscal year that includes budgeted administrative expenditures that exceed the budgeted administrative expenditures in the current year plus the lesser of:

                (1) a percentage of the current year's administrative expenditures less than or equal to the increase in the consumer price index from the prior year; or

                (2) a percentage of the current year's budgeted administrative expenditures less than or equal to the percentage increase in program cost for the budgeted fiscal year compared with the current fiscal year.

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

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

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

                (3) has been newly authorized within a five-year period from the enactment of this section.

          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 of a charter school shall approve the waiver request by an affirmative vote of at least two-thirds of the members of the local school board or governing body of a charter school.

          D. Except for a school district or charter school receiving a waiver under Subsection B of this section, the department shall not:

                (1) approve an operating budget of a school district or charter school that does not limit the growth of administrative expenditures as provided in Subsection A of this section; and

                (2) approve a budget adjustment request to increase administrative expenditures if the adjusted budget would provide for an increase in the budgeted year's administrative expenditures above the amount allowed in Subsection A of this section."

     SECTION 2. Section 22-8-2 NMSA 1978 (being Laws 1978, Chapter 128, Section 3, as amended by Laws 2019, Chapter 206, Section 6 and by Laws 2019, Chapter 207, Section 6) 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 uniform chart of accounts for expenditures;

          [B.] C. "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.] D. "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;

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

          [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 and educational plan required to be submitted by a local school board or governing body of a state-chartered charter school;

          [I.] K. "performance measure" means a quantitative indicator used to assess the output or outcome of an approved program;

          [J.] L. "performance target" means the expected level of performance of a program's performance measure;

          [K.] M. "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;

          [L.] N. "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;

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

          [N.] P. "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;

          [O.] Q. "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 and other criteria:

                     (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;

                     (c) except as provided in Subparagraph (d) of this paragraph, has not reached the student's twenty-second birthday on the first day of the school year; or

                     (d) has reached the student's twenty-second birthday on the first day of the 2019-2020 school year, is counted in a school district's or charter school's MEM on the third reporting date of the 2018-2019 school year, has been continuously enrolled in the same public school since that reporting date and is still enrolled in that school;

          [P.] R. "rural population rate" means that proportion of the total population within a school district's geographic boundaries that lives in a rural area and not in an urban area as defined by the United States census bureau;

          [Q.] S. "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

          [R.] T. "state superintendent" means the secretary of public education or the secretary's designee."

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