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.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB21 Relates to HB4, HB27, SB2, SB7 and SB10

SOURCES OF INFORMATION

Office of Attorney General

LFC Files

SUMMARY

Synopsis of Bill

This bill enacts a new section of the Public School Code cited as the "Pilot New Mexico Work Voucher Program Act". This bill establishes a 4 year pilot program to provide students in the Albuquerque and Santa Fe Public School Districts with a voucher that may be used in any public or private school located in New Mexico.

Significant Issues

This bill would allow a maximum of 3,000 students from the Albuquerque Public Schools and a maximum of 1,000 from the Santa Fe Public Schools to participate in the voucher pilot program. If more than the maximum number of students allowed to participate apply for a voucher, the vouchers are distributed on a random basis.

A student is eligible to participate, in the program if his family is eligible to receive cash assistance or services pursuant to the New Mexico Works Act.

The pilot program shall begin July 1, 1999 and end June 30, 2003.

Students participating in the pilot program are subject to student assessments required by Section 22-1-6 NMSA 1978. The assessments are to be administered by the school district which provides the student with the voucher.

If a student selects a private school, his parent or legal guardian is responsible for transporting the student to school. However, if a student selects a public school, the Albuquerque and Santa Fe School Districts may promulgate rules in order to provide transportation for those students who select a school in the students' attendance zones within the school district's boundary.

FISCAL IMPLICATIONS

This bill appropriates $13,200.0 from the general fund to the state equalization guarantee distribution for expenditure in fiscal year 2000 to fund only those students counted in membership, pursuant to the Pilot New Mexico Works Voucher Program Act, who were not enrolled in a public school in New Mexico in the prior school year. Any unexpended or unencumbered balance remaining at the end of fiscal year 2000 shall revert to the general fund.

The value of each voucher is $3,100.00. If a student selects an accredited private school, the value of the voucher shall be increased by 10 percent.

Funding for public school students participating in the program who were included in the prior year membership count shall follow the student from either the Albuquerque or Santa Fe district state equalization guarantee distribution.

According to data provided by SDE, there are approximately 10,927 students attending private schools in Albuquerque and 2,687 students attending private schools in Santa Fe.

If all 4000 students authorized to participate in the program, were to come from private schools in Albuquerque and Santa Fe, the cost would be $12,400.0. If all 4000 students select an accredited private school this cost would increase by 10 percent for a total cost of $13,640.0.

If a student uses a voucher to enroll in a public school outside of the student's attendance zone, the school district where the student enrolls shall receive the amount that the student would have generated through the state equalization guarantee distribution, including any size or training and experience adjustment for the school district or the public school, and including a proportionate allocation for the local school district's at-risk funding. If the value generated by a student who uses a voucher to enroll in a private school is greater than $3,100.00, the district in the student's attendance zone shall receive the difference.

ADMINISTRATIVE IMPLICATIONS

The State Department of Public Education, the Albuquerque and Santa Fe public school districts are required to establish and bear the cost of administering the voucher program, and must initiate a public awareness campaign about the program.

A private school, the Albuquerque or Santa Fe Public School Districts shall redeem one-twelfth of the value of the voucher from the school district issuing it on the twentieth day of each month of the year.

SDE, the Albuquerque and Santa Fe Public School Districts shall report to the legislature on the outcome of the program.

The State Department of Education shall promulgate rules to implement and operate the program.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

This bill duplicates HB21 and relates to HB4, HB27, SB2, SB7 and SB10.

TECHNICAL ISSUES

This bill does not address accreditation issues for private schools participating in the program. An assumption must be made that private schools are not required to be accredited by the SBE or any another educational accrediting body.

The value of the voucher for students moving from one public school to another, will vary and could possibly exceed $3,100.00 given that size, training and experience and the district's at-risk funding are to be included in the calculation of the amount.

It should be noted that the cost to educate a child in half-day kindergarten with no special education services, is approximately $1,687.00. This amount is less than the $3,100.00 value of the voucher and the bill does not include a provision that would require that the voucher note redemption value not exceed the tuition and fees charged by a private school.

OTHER SUBSTANTIVE ISSUES

Attorney General Patricia A. Madrid recently issued an opinion regarding the use of public money to fund a school voucher program and it's permissibility under the New Mexico Constitution. The following is a summary of the information contained in the opinion issued January 29, 1999:

Conclusion:

"A school voucher program involving the use of public money to provide parents of private school children with tuition assistance raises serious and substantial state constitutional questions, most significantly under Article XII, Section 3, which proscribes the use of public money for the support of private schools, and the anti-donation clause of Article IX, Section 14.

Article XII, Section 3 provides that "no part of the proceeds arising from the sale or disposal of lands granted to the state by congress, or any other funds appropriated, levied or collected for educational purposes, shall be used for the support of any sectarian, denominational or private school, college or university." The Attorney General concluded "that a New Mexico court addressing the issue would likely conclude that tuition assistance under a voucher program constitutes the unconstitutional use of public money for the support of sectarian, denomination or private schools, whether the money is paid directly to the schools, the students or the parents".

The anti-donation clause of Article IX, Section 14 provides that "neither the state nor any county, school district or municipality, except as otherwise provided in this constitution, shall directly or indirectly lend or pledge its credit or make any donation to or in aid of any person, association or public or private institution....". According to the Attorney General, "the anti-donation clause appears to prohibit the state from providing tuition assistance in the form of vouchers to private school students. Whether the beneficiary of the assistance is the parents or the schools, the use of public money to subsidize the education of private school students, without more, is a donation to private persons or entities in violation of the state constitution. The educational purpose of private schools, an undeniably public purpose, is not sufficient to immunize the voucher program from constitutional challenge".

Article XII, Section 1 requires the state to maintain a uniform system of free public education. If a substantial proportion of the resources currently directed toward the support of the public schools is utilized in support of the voucher notes, the state's ability to maintain the mandated system of free public schools may be compromised.

CTF/gm