New Mexico School Funding

Public School Funding in New Mexico and Sufficient Funding for Public Education

Frequently-Asked Questions (REVISED DRAFT - 7/21/08)

What does the NM Constitution say about the funding of public education?

Article 12, Section 1 of the NM Constitution states:

“A uniform system of free public schools sufficient for the education of, and open to, all the children of school age in the state shall be established and maintained.”

The NM Constitution does not say a public school system will be established and maintained if funds are available. It specifically says a sufficient public school system shall be established and maintained. This is the only obligation, in terms of providing services to citizens, that the state Constitution imposes upon state government.

Is the current system of public education “sufficient?”

No.

A recent study of the public education system by the American Institutes for Research (AIR), a respected firm that has done studies of school funding mechanisms around the country, determined that school districts of all sizes in New Mexico do not receive sufficient funding to provide educationally-necessary services and to meet the mandates imposed upon them by state and federal law.

What does “sufficiency” mean for my child?

Sufficiency means that your child’s school and school district have the necessary resources to give your child a basic and solid education in a safe and functional environment.

This means that your children’s teachers have the training they need to effectively teach children with different learning styles, as well as tools such as an effective curriculum, support materials, and technology to get the job done. It means schools can provide a well-rounded education including a solid grounding in the core subjects as well as the benefits of physical and health and wellness education and an introduction to the arts and music. It means that quality services for special education needs or help in learning the English language will be available.

Background Regarding School Funding and the Funding Formula Study

What steps has the state legislature taken so far to review public school funding?

In 2005, the state legislature established the Funding Formula Study Task Force to review how schools in New Mexico are funded and to define any needed changes.

Under the terms of the enabling legislation, the Task Force contracted with the American Institutes for Research (AIR) to conduct a comprehensive study of the formula.

The study asked some very fundamental questions:

* What constitutes a “sufficient education” in the 21st century?
* Are New Mexico public schools currently able to provide a “sufficient education”?
* If not, what resources (staff, programs, professional development, additional school days, etc.) do schools and school districts need, rooted in best educational practices, to provide a “sufficient education”?
* How can these resources be allocated among schools and school districts so that every child’s needs can be met?
* How much will it cost to provide the needed resources?
* If additional dollars are needed, where will they come from?
* If the state provides additional funding and resources for schools, what results can taxpayers expect and how will school districts be held accountable?

Why is AIR qualified to conduct the study and develop a funding formula?

American Institutes for Research is a nationally-respected company with extensive experience in performing research-based studies on school finance and school reform.

Specifically, AIR has done studies on what constitutes sufficiency in education in New York, in a study funded in part by the Bill and Melinda Gates Foundation. AIR has conducted major studies in New York, California, and Alaska among others.

How did the Task Force and AIR develop their recommendations?

The Task Force and AIR conducted town hall meetings throughout the state where parents, teachers, school staff members, and local business and community leaders could provide input on the needs of their local schools.

Local communities weighed in on whether their children’s and schools’ needs were being adequately addressed by the state’s current methods for funding schools. Community members and educators were able to provide input through other means, such as surveys and a larger Stakeholder Panel.

Then, AIR met with “professional judgment panels” made up of experts from around the state whose task was to define what constitutes a sufficient educational program and determine how much it would cost. AIR worked with a subcommittee of the full Task Force to analyze all of the input received from the professional judgment panels, the public input process, and the Stakeholder Panel to define what a sufficient basic K-12 educational program includes and how it could be funded given the realities of New Mexico’s economy.

Ultimately, the project and proposed funding formula represent the output of a process that identified best educational practices, the judgments of professional educators, and the careful assessment of caring policymakers regarding the political and economic realities of the state.

Did AIR and the Task Force find that schools are able to deliver a sufficient educational program with the funding currently available?

No.

The findings identified several factors and best practices that are common to sufficient educational programs regardless of school size or location and that help to meet the needs of every child. Specifically, the panels recommended adding resources to reduce class sizes, allocate additional staff to support language and cultural heritage programs, extend the school year for all students, and add specialists to work with small groups of students with specific educational needs and to foster professional development (ongoing training) opportunities for teachers.

About Sufficient Funding for Public Schools

Why have New Mexico schools become insufficiently funded?

1. It appears that funding for education has become less of a state priority over the past several years.

Although the state has increased funding to education in recent years, these increases have not kept pace with growth in the state budget. In 1986-87, public schools received 51.6% of the state’s general fund expenditures. In the upcoming fiscal year, that percentage will drop to less than 44%.

Public schools received less than 35% of the available new revenue during the last legislative session. It is only fair to note that in the past ten years total public education funding has increased by 67% (about $1 billion), but it has not kept pace with the needs of schools or with the growth of the state budget, which has increased during the same period by a total $3.5 billion.

2. State and federal law, along with other factors in individual school districts, imposes requirements on school districts that have not been fully funded.

Some of these are:

1. Increases in fixed costs (insurance, fuel, utilities)
2. Testing and remediation mandates required by the federal No Child Left Behind Act (NCLB)
3. Increased high school graduation requirements and high school reform
4. Operational costs associated with opening new schools
5. Implementation of minimum teacher salaries to support student learning through recruiting and retention of high-quality teachers (not fully funded in some districts)
6. Requirements to provide services for students with special needs, which are continually being expanded beyond those in statute and regulation as a result of court action

3. We know more about how students learn and that not all children learn in the same way. One size no longer fits all.

In order to meet the needs of every child, schools must provide sufficient educational programs that support different learning styles, and must provide ongoing teacher and staff training in the best methods for helping students learn. We now know what tools school districts need to do the job, but funding has not kept pace.

4. The services schools are now expected to provide to meet the needs of children in today’s society have multiplied.

Schools now serve many special needs children who would not have been placed in public schools 20 or 30 years ago. Children now come into schools with social and medical needs far beyond what schools were expected to meet in the past. If students bring serious problems with them onto the school campus and schools are unable to give them the support they need, in some cases those students can pose a danger to themselves and to others.

Why did the percentage of the NM general fund going to fund to education decrease and state and federal mandates increase?

Good question. Funding for Education has become less of a priority as the state’s overall needs have grown.

New Mexico has many other needs, and over the last several years tax dollars have been shifted away from education to help meet needs in other areas such as health care and transportation. These are all legitimate needs, but it means that even as additional federal and state mandates are imposed, schools have to do more with a smaller proportion of the budget.

Although education funding has increased significantly in the past several years, almost all of this money has gone to meet soaring fixed costs such as insurance and utilities and to provide teachers a living wage. Salaries definitely needed improving, but with the percentage increase in funding for education declining in proportion to the total size of the state budget, school districts have not had adequate funding to support teacher training and educational programming that supports students’ achieving academic success.

What is the result of insufficient funding?

Schools are not sufficiently funded to provide necessary services and programs. Schools and school districts simply haven’t had the resources they need to assure that every child can succeed.

Obviously, there’s more to providing an effective education than money. But when more than 20 districts can’t make their budgets year after year without getting “emergency supplemental” funding from the state, and when districts can’t provide services mandated by the federal and state governments without slipping slowly “into the hole” financially, that confirms that schools aren’t sufficiently funded.

What new requirements have been placed on education in the last 20 years?

It’s a long list.

Some of the major ones are the testing and accountability requirements and framework imposed by NCLB, the many requirements set forth in the federal Individuals with Disabilities Education Act (IDEA) to benefit students with disabilities, and the rapidly-changing technological landscape that now demands that students and teachers be computer/PDA/communications-literate and able to teach and learn using technology. All of these are expensive for school districts to meet.

What have school districts done with the funding increases they have received?

The extra funding has helped to support people, programs, and facilities -- but it hasn’t kept pace with the needs.

By legislative mandate, the lion’s share of the additional money has gone to increase staff salaries and especially teacher salaries, including the establishment of minimum teacher salaries under the new three-tier licensure system. While this very much needed to be done, districts during the same period got little additional money to keep pace with fixed costs, provide teacher training and educational programs, and meet new mandates like NCLB coming from the federal government. In addition, many districts did not receive sufficient funding from the state to completely cover the cost of implementing three-tier licensure. This further eroded existing programs and made the creation of additional programs a near-impossibility.

How does the proposed new funding formula address the underfunding?

To sufficiently fund an adequate educational program would require an increase of funding for public education of about 14.5%.

The actual statewide average per-pupil funding under the old formula for 2007-08 was $7,110; the Task Force/AIR estimate of what would be required to fund a sufficient program is $8,144 (in 2007 dollars). This money would be funneled through the new formula as described above.

What will it cost to implement these recommendations?

The Task Force estimated that the state would need to allocate an additional $352 million (in 2007 dollars) in order to fund a sufficient educational program.

Where would this $352 million come from?

The legislature could consider a variety of options, including but not limited to:

Closing loopholes in the current tax laws
Re-directing existing tax revenue into education
Extending the use of interest from the land tax permanent fund
Generating additional tax revenue, possibly through a small increase to the statewide gross receipts tax which would not exceed the tax rates of neighboring states

Weren’t there estimates that the new formula would cost as much as $750 million to implement?

Yes, some of the early estimates added up to about $750 million -- but the numbers were re-evaluated to more accurately address sufficiency rather than the ideal.

The Task Force recognized that it may not be possible for the state to immediately afford to implement all of the programs local communities and educators feel would benefit students. The Task Force went through a lengthy and sometimes painful process to define those programs that were absolutely essential vs. those which would be beneficial, much the same as families do in setting their household budgets. The $352 million estimate is the minimum the Task Force determined would be needed to provide a sufficient educational program for all New Mexico school districts.

What does this “sufficient” educational program include?

Increased funding would allow school districts to offer programs and services shown to improve student achievement in school districts across the country and in districts in New Mexico that have been fortunate enough to institute some of these practices.

Districts would obviously continue to teach the “three R’s” -- core subjects including reading and language arts, math, science, and social studies. But a comprehensive, well-rounded program includes more than just the basics. School districts may choose to implement some or all of these programs and services depending on such factors as demographics, student test results, and the needs of children in their individual communities:

Extending the school year for students
Offering summer school and enhanced before- and after-school opportunities
Credit recovery to allow students who fail classes a chance to make them up and earn a diploma
Enhancing intervention efforts for children who may be at risk of academic failure
Enhancing remediation programs in the core subjects (language arts and reading, mathematics, science, and social studies)
Improving truancy prevention and intervention strategies
Establishing or enhancing bilingual/multicultural programs
Offering visual and performing arts, music, and physical education programs to more students
Enhancing programs for gifted students
Enhancing career-technical education programs
Improving the district’s ability to collect and analyze student and staff data and to use the information to improve student achievement
Improving student and school safety
Extending the school day for teachers or extending teachers’ contracted work days to provide additional time, beyond the school year, for teacher training
Lowering class sizes and student-teacher ratios
Employing academic coaches and resource teachers and specialists, particularly in reading, math, and English-language learning programs
Employing educational assistants, librarians, counselors, nurses, social workers, and student support service staff
Providing professional development opportunities for licensed school staff outside the instructional day or year
Providing teaching English as a second language and bilingual endorsement courses for instructional staff
Providing stipends for instructional staff who have a bilingual or teaching English as a second language endorsement
Improving information technology services for students and staff, including employment of qualified staff or contracting for outside technical assistance.

Sounds like the state is trying to impose programs on my local school district. Will my district lose local control over how it educates students?

No. The proposed formula, along with the other reforms proposed in statute, provides a framework – but recognizes that kids and the needs of kids are very different in different parts of the state.

Therefore, local superintendents and school boards still have discretion to adopt those programs and services that meet the needs of their students and communities. However, there are expectations schools and districts must meet. If those expectations are not met, the state can intervene and recommend or impose specific remedies to help schools that aren’t meeting the needs of kids. State statute and the federal NCLB mandate that the state require local schools that are in corrective action or restructuring to adopt best-practice-based strategies for improving student learning such as the ones suggested in the funding formula legislation.

Why do schools need all this extra “stuff” (specialists to help, art, music, PE, etc.)? A teacher and the “three R’s” were good enough for me.

The world has changed a lot in the past 50 years, and educational needs have changed and increased.

Schools have never just taught the “3 R’s”

The majority of schools have always offered programs like art, music, physical education, and elective classes that help students learn and teach them the academic and life skills they will need to become well-rounded individuals. But despite state efforts to support programs such as elementary fine arts and PE, the lack of availability of funding slowly chips away at districts’ ability to provide well-rounded educational programs.

We now know a lot more about how children learn.

We know that children are becoming obese because they don’t get enough physical exercise. We know that art and music, in addition to enriching children’s lives, can also be used to teach math and science concepts. Programs like athletics and fine arts provide reasons for students who might otherwise drop out to stay in school. Failure to meet the needs of students can have serious consequences for individuals, families and society as a whole.

The greatest methods and techniques of teaching don’t do students any good unless teachers know how to use them.

Specialists in reading, math, and other core subjects work with teachers to help them apply these techniques in the classroom. Since students learn in different ways, specialists help teachers adapt their style so they can help different types of learners. Specialists are especially important for students with special needs who may need intensive help with learning and even speech and physical mobility. The advent of computers and other technologies has added not only expense, but the need to train both students and teachers on how to benefit from technology.

Schools increasingly have had to take on family support roles that go beyond simply educating children.

Of course, it is not the job of schools to usurp the traditional roles of parents. But in a society where most parents have to work, many children live in poverty, and some live in dysfunctional or abusive environments, services provided by schools sometimes fill an important void. For some children, a visit to the school nurse is the only medical care a child receives. For students with drug, alcohol, or other issues, a school social worker or counselor may be a savior who networks with community services to get them the help they need and keeps them on the right track in school. Schools often connect parents to information on everything from how to help their children with homework to how to be more effective as parents. If schools are expected to provide these services, schools must receive sufficient funding to do so.

How is sufficient funding for schools a “win/win” for the state, for communities, for educators, and above all for children?

For the state and for communities, the new formula and the associated school finance reforms help to assure that school districts have the resources they need to do the job and are accountable for producing results.

Strong schools help to foster economic development by encouraging business and residents to locate in New Mexico. Businesses want an education system that produces a high-quality workforce and that will attract outstanding employees who want to work for them because they do business in a community that will provide a quality education for their children.

For teachers and school staff, the proposed finance reforms recognize that they have been asked to do a Herculean job without the resources they truly need.

The proposed formula provides additional funding for the training and support classroom teachers and other educators need to do the best possible job for every child.

For parents and families, the proposed formula helps to assure that schools will have the resources needed to provide a quality education, regardless of what special needs a student might have.

The formula provides training so teachers have the tools they need to effectively teach the curriculum to children with different ways of learning and to help every child learn. It also helps districts to provide the programs, services, and activities that keep students in school and help them to be successful in school and beyond.

Additional funding for public education would enable students and schools to thrive -- not just survive.

Is more money the answer?

The system is not fundamentally broken -- it just doesn’t have the resources to do the job.

In recent years, schools and school districts have been asked to do far more, but while funding for education has increased, it hasn’t kept pace with the demands now placed on schools.

We now have much better data on what our students know and how they learn, both for individual children and for schools and communities as a whole. This data has told us what resources we need to do the job – but we don’t have the money to pay for it.

Increasing resources for public education has worked in other states, notably North Carolina. These improvements not only helped students, but greatly supported economic development in the state.

About the Current and Proposed Funding Formulas

How are public schools in New Mexico funded?

The primary source for operational funding is the State of New Mexico.

Operational funds pay for teacher and staff salaries, fixed costs such as employee benefits, insurance, and utilities, supplies and other materials, business and custodial services, and provision of educational programs for students.

Many other states provide nowhere near the level of state funding for schools that New Mexico does. Why does so much of the money for funding public schools come from the state?

Taxpayers in other states pay local taxes to support operational costs for schools, whereas New Mexico taxpayers are prohibited from doing so and may only generate local revenue (taxes) to fund capital projects (renovating & constructing schools).

It is true that some states fund schools differently, with state government contributing a much lower percentage of school districts’ operational budgets. However, in those states, local school districts levy taxes on their communities to support even the day-to-day operational costs of educating their students.

Education in New Mexico used to be funded in this manner. However, in 1974, as a result of Natonabah vs. NM, a court case challenging the equity of funding of public schools, the state adopted the state equalization guarantee, the basic funding formula still in use.

How does the state currently determine how much money each school district should receive?

The state uses a complex formula, called the State Equalization Guarantee (SEG) to allocate education funds for school operations fairly among school districts.

The SEG allocates funding based on the needs of each individual student. It takes into account a variety of factors, including a student’s grade level and need for special education services. It also includes allocations for students deemed to be “at-risk,” students that cause a district’s enrollment to grow, and allocations to fund special programs such as fine arts in elementary schools.

The SEG does not fund student transportation (bus) services, and does not fund capital improvements (school construction and renovation). These areas are separately funded by the state and, in the case of school construction, by local taxpayers.

What is wrong with the current funding formula?

The current formula didn’t adjust sufficiently to meet the current needs of students.

The formula was originally established in 1974. As the educational and other needs of students and the requirements imposed by law have changed, the formula has been patched and amended. As the complexity of the formula has grown, it has become less equitable and has not kept pace with the needs of schools.

What are specifics of the school finance proposals as presented in HB 241 from the 2008 legislative session?

Based on the input received, AIR crafted a new and simpler funding formula that identifies a “sufficient per-pupil cost” as a base for allocating funding.

The sufficient per-pupil cost is based on a comprehensive instructional program that includes the cost of core academic programs, career-technical education, gifted programs, bilingual-multicultural programs, arts and music, health and physical education, and special education and appropriate staff.

The base per-pupil cost is then multiplied by a series of formula adjustment factors that provide additional funding for various pupil needs and size. These include:

Children living in poverty
English-language learners
Children in need of special education services (for charter schools; special ed funding is included in the base for school districts except as described below)
Student mobility (students entering/leaving a district)
Enrollment variations
Index of Staff Qualifications (replaces T & E)

Additional recommendations in the proposed legislation included:

pecial education funding:

Fund special education students and services with a single weight, rather than classifying special ed students into A/B, C, and D categories based on the nature and severity of the student’s disability

To limit the incentive for districts to increase funding by over-identifying special ed students, fund districts at a flat 16% of enrollment multiplied by the special education formula adjustment factor. The intent of this provision is to bring the state closer to the national average of students identified as needing special education services (12%-14%) and to encourage school districts to provide early intervention for students to prevent them from needing special education services later on. Districts with fewer than 16% of identified special ed students would use the additional funds generated to provide these prevention and intervention services

The proposed legislation includes a contingency fund to help districts with catastrophic costs related to educating students with disabilities that require especially extensive and expensive interventions. This type of fund serves as an insurance program to protect districts against extraordinarily high special education costs.

Replace the current Training and Experience (T&E) index with an Index of Staff Qualifications (ISQ) structured to reflect the three-tier licensure system and the average values of experience and educational qualifications of instructional staff employed in New Mexico
Increase the number of instructional hours/school days for students, and the number of professional development days for teachers and instructional staff
Retain incentives for teachers to achieve National Board Certification
Accommodate the needs of school districts that are growing or declining in enrollment by funding districts on the greater of the previous year’s average enrollment calculated on the 80th and 120th day of the school year (which meets the needs of districts declining in enrollment) or on the 40th day pupil count for the current year (which meets the needs of growing districts)
Require that districts align spending plans with priorities laid out in their schools’ and district’s Educational Plans for Student Success (EPSS)

The Task Force’s recommendations also included the following that do not appear in HB 241:

Expand and improve the statewide information system that links student performance with school resources to help better target resources to areas of student need and help monitor the progress of schools. This would help the state track which types of resources make a difference in terms of student achievement and to share this knowledge across the state
Allocate additional funding to the existing New School Development Fund to provide support to districts for programmatic (operational) costs associated with opening new schools

How are school districts held accountable for spending the additional funds wisely?

The proposed legislation creating the new funding formula requires that school and district budgets be aligned to Educational Plans for Student Success (EPSS).

These plans are developed by individual schools and districts and submitted to the state for approval. The law would require that the EPSS be developed with input from school staff, students, parents, business community members, post-secondary educational institutions, tribal governments located within the district, and other interested citizens. The PED would retain the authority to not approve a district’s budget until/unless it reflects alignment with the EPSS.

How are school districts held accountable for improving student achievement?

Schools are expected to show gains in student achievement in line with the requirements of the state accountability system and NCLB. NCLB requires sanctions for schools and districts whose students do not meet proficiency targets in the core subjects.

Increased money = increased accountability? What does that look like? How do schools become more accountable?

Schools are already very accountable. NCLB and the state’s accountability system already rate schools and mandate state intervention for schools that are not making required progress.

In addition, the proposed legislation would require school districts to align their budgets with their EPSS. The EPSS defines the philosophies, tactics, and techniques schools and districts use to help every student succeed. The EPSS already exists, but the law would require broadened public input into the creation of the EPSS.

The new formula does not specifically earmark funds for areas such as ELL and bilingual education, special education, PE and arts, etc. How does the proposed law guarantee that schools and districts will provide adequate programs in these and other areas?

The proposed law would require districts’ EPSS to specifically address the needs of low-income students, students not proficient in English, students who change schools (mobility), students in need of special education, and gifted students. Again, budgets must address the demographic profile of the district’s students.

Schools would be required to provide access to educational programs for bilingual and multicultural education, health and wellness including physical education, athletics, nutrition and health education, career-technical education, visual and performing arts and music, gifted education, advanced placement and honors programs, special education, and distance education.

The proposed legislation also creates a “Funding Formula Accountability and Implementation Assistance Committee” that would work with the state and with school districts on assuring the formula is appropriately implemented and would provide regular reports to the major standing legislative oversight committees (LESC and LFC) and to the Governor.

How does ISQ index enter into the formula? How does it compare to T&E? As a teacher, how will this affect my salary and earning power?

The ISQ (Index of Staff Qualifications) would replace and simplify the current Training and Experience matrix (T&E) used to determine compensation for teachers and other instructional support staff as defined under the law.

Like the T&E index, the ISQ bases compensation on training above the bachelor’s degree and on years of experience. The new ISQ for teachers would be aligned to the three-tier licensure system and factors in the minimum salaries for each tier.

What about instructional staff who are not teachers?

The legislation creates a similar, but not identical, ISQ that would govern salaries for instructional staff.

Like the teacher ISQ, it would base compensation on years of experience and on degrees and post-graduate hours earned. However, it is not a “tiered” system like the three-tier licensure system and is therefore not tied to the teacher salary minimums or the teacher’s three-tier structure.

Some students with severe physical or mental problems require very expensive services that cost much more than the base sufficient per-pupil cost. How will districts pay for these services?

The proposed legislation establishes a contingency fund to which districts can apply for funds to pay these costs.

Will gifted students be provided for?

Yes. The legislation specifies that school districts’ educational plans shall include educational programming for any gifted students identified in the district.

The legislation also requires the NM Public Education Department to adopt standards for identifying gifted students, and requires districts with gifted programs to create at least one advisory committee to regularly review the goals, priorities, and operational plans for the program.

Why do we need to increase the number of days in the school calendar? Why not keep kids in school and require teachers to do inservice outside of school days?

There are two parts to this question: the number of days/hours students are in class, and the days/time available to provide teachers and school staff with necessary training.

In New Mexico, students are in school for less time than they are in many other states, and the proposed legislation would extend the school day and school year for students.
It would also provide funding for additional days of teacher training.

Teachers work on contracts that only pay them for a specific number of days of work (typically 182 or 183). This means that if the state or school districts want to mandate additional training days, they are required to extend the teachers’ contracts and pay them for the extra days.

It may be in the best interest of students that teacher training (inservice) days be held throughout the school year. For example, teachers may need a day in the middle of the year to analyze data on how their students are doing so they can adjust their teaching strategies and help their students improve.