Studies Recommend Funding Changes in New Mexico

Last Updated: November 29, 2011

This article appeared in the November 2011 Rural Policy Matters.

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Two recent reports in New Mexico come from very different sources and are making very different recommendations about education funding in the Grand Canyon State. But both recognize the economic reality that additional funding for schools is needed and not likely to be allocated under the present system.

Last month, the nonprofit New Mexico Voices released their report, Funding Public Schools in New Mexico in the Great Recession. Focusing on the last year of education funding, it highlights the 5.1% drop in the education budget and the loss of 2,300 education sector jobs. Funding Public Schools recommends raising additional revenue to prevent a further loss of education quality: “State policy-makers were unable or unwilling to make up this shortfall with new revenues. Lawmakers could have enacted a wide variety of tax measures that would not have harmed the state economy but would have kept the public school budget from falling.”

The report goes on to say that the current formula is not meeting needs, and that, in the absence of greatly increased revenues, the Legislature should raise new revenue next year, rather than continue to cut K–12 funding, and it should make pre-K more widely available. The report also recommends tapping property taxes for public school operating costs and raising income tax on higher earners to raise revenue.

A Different Analysis, Different Solution

Another education funding study was released to legislators earlier this month by the Legislative Finance Committee and the Legislative Education Study Committee. That report argues that the funding distribution system needs to be simplified and brought up to date to better implement good education policy. The 50-page report does not recommend additional funding for schools, but does come with a $48 million price tag for a hold-harmless provision for districts that would lose funding under the formula. Currently, $2.3 billion in education funding is distributed through its public school funding formula to 89 school districts and to 84 charter schools.

One of the main contentions of the Evaluation of the Public School Funding Formula report is that the current formula allows school districts to “game” the formula by seeking additional funding by over-identifying special education students. The report also takes aim at adjustments for small school size, saying that districts have created or kept “unnecessary” schools to receive extra funding. In addition, the report also challenges the use of bilingual education and compensating teachers for advanced degrees.

One simplification recommended in the report is a separate at-risk category for students that would direct an additional 15% per-pupil funding to districts based on free and reduced price lunch eligibility. Currently, according to the report, a less than 10% differential goes to those students, and the report points out that other states weight their allocation as much as 50% for poverty. Research has indicated that the actual cost of educating a student living in poverty is as much as twice that of a non-poor child.

The report does endorse many of the formula changes recommended by a 2008 report including a simplified formula with a limited number of weights, but it rejects that report’s recommended 15% increase in education funding to districts, which would have meant the state spent an additional $345 million on public education. That report was conducted by the American Institutes of Research for the Funding Formula Study Task Force. (Read Rural Trust analysis of the study here and here.) It suggested overhauling New Mexico's education funding formula but also recommended the state spend an additional $345 million on public education.

Lawmakers have publicly dismissed the legislative report’s $48 million cost as prohibitive, and also characterized some of its conclusions as superficial. It is not yet clear whether they will take legislative action to implement any of the report’s recommendations, but many legislators have expressed commitment to continued discussions of education funding reform.

New Mexico’s formula is 38 years old, and state education spending levels are very low compared to other states. The state has the nation’s highest rates of rural minority students, rural English Language Learners, and rural students in poverty. New Mexico’s rural districts have struggled through underfunding even in financially stable years.

Read more:

Coverage on the New Mexico Voices report:

Read the report here:

Coverage on the Legislative Funding Report:

Older coverage discussing the new implementation of four-day school weeks in other states, a common practice in New Mexico’s rural districts:

Read more from the November 2011 Rural Policy Matters.