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School Funding Formula – New Mexico

| Written by ILSR Admin | No Comments | Updated on Nov 21, 2008 The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/rule/equity-in-school-finance/2081-2/

New Mexico’s school funding formula has long been considered one of the most equalized in the nation. A state will tend to have more equalized funding when several conditions apply: a) the state takes on a larger share of the funding (as opposed to when individual school districts raise the majority of funds through property taxes); b)states target their funding to poorer districts, and; c) states take into account regional differences in the cost of education (for instance, it is more expensive to educate a child in New York City than in Plattsburgh.)

Until 1997, the state of New Mexico contributed about 74 percent of school funds. In 1997 the legislature passed a revised school funding formula (S.B. 100), increasing the share of funds to around 84 percent and targeting more of these funds to at-risk students. Money raised in individual school districts may go towards construction and maintenance, but not for school operating costs.

New Mexico’s Public School Funding Formula

New Mexico Statutes 22-8-25

A.The state equalization guarantee distribution is that amount of money distributed to each school district to ensure that the school district’s operating revenue, including its local and federal revenues as defined in this section, is at least equal to the school district’s program cost.

B. "Local revenue", as used in this section, means seventy-five percent of receipts to the school district derived from that amount produced by a school district property tax applied at the rate of fifty cents ($.50) to each one thousand dollars($1,000) of net taxable value of property allocated to the school district and to the assessed value of products severed and sold in the school district as determined under the Oil and Gas Ad Valorem Production Tax Act [Chapter 7, Article 32 NMSA 1978] and upon the assessed value of equipment in the school district as determined under the Oil and Gas Production Equipment Ad Valorem Tax Act [Chapter 7, Article 34 NMSA 1978]. The school district shall budget and expend twenty percent of the total revenue receipts for capital outlay as defined in the manual of accounting and budgeting provided in Section 22-8-5 NMSA 1978.

C. "Federal revenue", as used in this section, means receipts to the school district, excluding amounts which, if taken into account in the computation of the state equalization guarantee distribution, result, under federal law or regulations, in a reduction in or elimination of federal school funding otherwise receivable by the school district, derived from the following:

(1) seventy-five percent of the school district’s share of forest reserve funds distributed in accordance with Section 22-8-33 NMSA 1978. The school district shall budget and expend twenty percent of the total forest reserve receipts for capital outlay as defined in the manual of accounting and budgeting provided in Section 22-8-5 NMSA 1978; and

(2) seventy-five percent of grants from the federal government as assistance to those areas affected by federal activity authorized in accordance with Title 20 of the United States Code, commonly known as "PL 874 funds" or "impact aid". The school district shall budget and expend twenty percent of the grant receipts for capital outlay as defined in the manual of accounting and budgeting provided in Section 22-8-5 NMSA 1978.

D. To determine the amount of the state equalization guarantee distribution, the state superintendent shall:

(1) effective July 1, 1999 calculate the number of program units to which each school district is entitled using the basic program membership of the fortieth day of the prior year for all programs; provided that special education program units shall be calculated using the membership in special education programs on December 1 of the prior year; effective July 1, 2000, calculate the number of program units to which each school district is entitled using an average of the membership on the fortieth, eightieth and one hundred twentieth days of the prior year; or

(2) calculate the number of program units to which a school district operating under an approved year-round school calendar is entitled using the basic program membership on an appropriate date established by the state board; or

(3) calculate the number of program units to which a school district with a basic program MEM of two hundred or less is entitled by using the basic program membership on the fortieth day of either the prior or the current year, whichever is greater; provided that special education program units shall be calculated using the membership in special education programs on December 1 of either the prior or the current year; and

(4) using the results of the calculations in Paragraph (1), (2) or (3) of this subsection and the instructional staff training and experience index from the October report of the prior school year, establish a total program cost of the school district;

(5) calculate the local and federal revenues as defined in this section;

(6) deduct the sum of the calculations made in Paragraph (5) of this subsection from the program cost established in Paragraph (4) of this subsection; and

(7)deduct the total amount of guaranteed energy savings contract payments that the state superintendent determines will be made to the school district from the public school utility conservation fund during the fiscal year for which the state equalization guarantee distribution is being computed.

E. The amount of the state equalization guarantee distribution to which a school district is entitled is the balance remaining after the deductions made in Paragraphs (6) and (7) of Subsection D of this section.

F.The state equalization guarantee distribution shall be distributed prior to June 30 of each fiscal year. The calculation shall be based on the local and federal revenues specified in this section received from June 1 of the previous fiscal year through May 31 of the fiscal year for which the state equalization guarantee distribution is being computed. In the event that a district has received more state equalization guarantee funds than its entitlement, a refund shall be made by the district to the state general fund.

History: Laws 1969, ch. 180, § 19; 1953 Comp., § 77-6-19; Laws 1971, ch. 263, § 9; 1972, ch. 90, § 1; reenacted by 1974, ch. 8, § 16; 1975, ch. 119, § 3; 1979, ch. 268, § 2; 1979, ch. 278, § 1; reenacted by 1981, ch. 176, §§3, 4, 5; 1986, ch. 32, § 20; 1986, ch. 33, § 16; 1988, ch. 63, § 1; 1988, ch. 64, § 29; 1989, ch. 258, § 1; 1990, ch. 94, § 3; 1993, ch. 226, § 23; 1993, ch. 231, § 14; 1997, ch. 40, § 8; 1999, ch. 275, § 1.

22-8-25.1. Additional per unit distribution from public school fund.

Thelegislature shall maintain each year in the public school fund an amount equal to the amount of revenue produced by all school districts pursuant to Paragraph (2) of Subsection B of Section 7-37-7 NMSA 1978 for which credit is required to be taken pursuant to Section 22-8-25 NMSA 1978. Each year the department shall distribute to each school district an amount determined by the department on a per program unit basis which shall be included within the state equalization guarantee distribution made pursuant to the general appropriation act.

History: 1953 Comp., § 22-8-25.1, enacted by Laws 1985 (1st S.S.), ch. 15, § 17; 1988, ch. 64, § 30.

22-8-26. Transportation distribution.

A.Money in the transportation distribution of the public school fund shall be used only for the purpose of making payments to each school district for the to-and-from school transportation costs of students in grades kindergarten through twelve attending public school within the school district and of three- and four-year old children who meet the state board approved criteria and definition of developmentally disabled and for transportation of students to and from their regular attendance centers and the place where vocational education programs are being offered.

B. In the event a school district’s transportation allocation exceeds the amount required to meet obligations to provide to-and-from transportation, three- and four-year old developmentally disabled transportation and vocational education transportation, fifty percent of the remaining balance shall be deposited in the transportation emergency fund.

C.Of the excess amount retained by the district, at least twenty-five percent shall be used for to-and-from transportation-related services, excluding salaries and benefits, and up to twenty-five percent may be used for other transportation-related services, excluding salaries and benefits as defined by rule of the department

D. In the event the sum of the proposed transportation allocations to each school district exceeds the amounts in the transportation distribution, the allocation to each school district shall be reduced in the proportion that the local school district allocation bears to the total statewide transportation distribution.

E. Local school boards, with the approval of the state transportation director, may provide additional transportation services pursuant to Section 22-16-4 NMSA 1978 to meet established program needs.

History: 1953 Comp., § 77-6-22, enacted by Laws 1967, ch. 16, § 76; 1969, ch. 180, §21; 1974, ch. 73, § 1; 1975, ch. 342, § 2; 1976 (S.S.), ch. 20, § 1; 1978, ch. 127, § 3; 1979, ch. 67, § 1; 1979, ch. 289, § 1; 1979, ch. 305, § 2; 1987, ch. 149, § 2; 1988, ch. 64, § 31; 1995, ch. 208, § 1; 1999 (1st S.S.), ch. 11, § 1.

22-8-27. Transportation equipment.

A.The state superintendent shall establish a systematic program for the purchase of necessary school bus transportation equipment.

B.In establishing a system for the replacement of school-district-owned buses, the state superintendent shall provide for the replacement of school buses on a twelve-year cycle. School districts requiring additional buses to accommodate growth in the district or to meet other special needs may petition the state superintendent for additional buses. Under exceptional circumstances, districts may also petition the state superintendent for permission to replace buses prior to the completion of a twelve-year cycle or to utilize buses in excess of twelve years contingent upon satisfactory annual safety inspections.

C.In establishing a system for the utilization of contractor-owned buses by school districts, the state superintendent shall establish a schedule for the payment of rental fees for the use of contractor-owned buses. As with school-district-owned operations, the state superintendent shall establish procedures to ensure the systematic replacement of buses on a twelve-year replacement cycle. School districts requiring additional buses to accommodate growth in the district or to meet other special needs may petition the state superintendent for additional buses. Under exceptional circumstances, districts may also petition the state superintendent for permission to replace buses prior to the completion of a twelve-year cycle or to utilize buses in excess of twelve years contingent upon satisfactory annual safety inspections. Effective with the 1995-96 school year, no school district shall pay rental fees for any one bus for a period in excess of five years. In the event a school bus service contract is terminated, the state superintendent shall calculate the remaining number of years that a bus could be used based on a twelve-year replacement cycle and calculate a value reflecting that use. The local school district shall deduct an amount equal to that value from any remaining amount due on the contract or if no balance remains on the contract, the contractor shall reimburse the school district an amount equal to the value calculated.

History: 1953 Comp., § 77-6-23, enacted by Laws 1967, ch. 16, § 77; 1988, ch. 64, § 32; 1993, ch. 226, § 24; 1995, ch. 208, § 2.

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