NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

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(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to Relates to HB303, HB114 SB 289 and SB492.

SOURCES OF INFORMATION

State Department of Public Education (SDE)

SUMMARY

Synopsis of Bill

This bill enacts a new section of the Public School Code cited as the "Elementary and Secondary School Voucher Act". The purpose of the act is to establish a voucher program that provides New Mexico's students the opportunity to attend their choice of public schools in order to best suit their individual needs and interests.

Significant Issues

Students participating in the program must meet the following criteria: for the 1999-2000 school year, the student's family income in 1998 cannot exceed 100 percent of the 1998 federal poverty guidelines; for the 2000-2001 school year, the student's family income in 1999 cannot exceed 185 percent of the 1999 federal poverty guidelines; for the 2001-2002 school year, the student's family income in 2000 cannot exceed 235 percent of the 2000 federal poverty guidelines; for the 2002-2003 school year and subsequent years, all students shall be eligible to participate in the program.

A parent may use a voucher note to enroll his child in a public school outside of the school district in which the child resides. The bill proposes to issue the voucher note to the student in care of the student's parent or legal guardian. A school district shall redeem the value of the voucher note from SDE in four installments beginning in September and ending in May.

The voucher program will be administered by the State Department of Education and in cooperation with school districts, the department must initiate a public awareness campaign about the program.

FISCAL IMPLICATIONS

This bill does not contain an appropriation.

The value of the voucher note will be equal to the amount of money generated by the student through the public school funding formula if the student had attended public school in his school attendance zone, excluding any district or school size adjustment and training and experience adjustment. The value of the voucher shall also include a proportionate allocation for the local school district's at risk funding and a proportionate per student amount for transportation expenses.

SDE indicates that this bill will require local school districts to implement its provisions within existing resources.

According to SDE, the amount of funding attached to individual students varies depending on the type of student and the school district in which the student lives.

ADMINISTRATIVE IMPLICATIONS

The State Department of Education will be required to administer and implement the program and indicates that there could be significant administrative impact. The department estimates that one additional FTE would be required to implement this program at a cost of $51.8.

According to SDE, the cost to process payments to private schools through Department of Finance and Administration for qualified students in the program would be approximately $75.00 per warrant issued.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

This bill relates to SB289 and HB303. Both bills would establish a voucher program for qualifying parents or guardians to use to education students at any public or private schools.

HB 114 amends Section 22-1-4 NMSA 1978, or the provision of the public school code pertaining to open enrollment, by allowing school districts to establish additional preferences for second and third priority students.

SB492 amends Section 22-1-4 NMSA 1978 or the provision of the public school code pertaining to open enrollment, by clarifying existing language and adding further requirements.

TECHNICAL ISSUES

SDE indicates that the bill should provide that payment is made at the close of the month for which the student has attended the private school so as not to offend the provisions of Section 30-23-2 NMSA 1978, which requires that services must be rendered prior to payment with public funds.

Section 5 provides that students may establish eligibility for the 1999-2000 school year; however, the bill does not contain an emergency clause, thus implementing the bill for the upcoming school year may be difficult.

OTHER SUBSTANTIVE ISSUES

Please refer to the SDE analysis for other substantive issues.

CTF/njw

Attachment