April 15, 2003 MEMORANDUM TO: New Mexico Legislators FROM: D. Pauline Rindone RE: Summary of Public School-Related Legislation Passed by the Forty-Sixth Legislature, First Session, 2003 (after Executive action) On March 26, 2003, the LESC mailed a memorandum on the Summary of Public School-Related Legislation that passed during the 2003 legislative session, in some cases before Executive action. This April 15, 2003 mailout includes the same materials but now reflects all action by the Governor. Please destroy any earlier versions. This 2003 legislative session was one of the busiest in recent memory. From the time leaders in both chambers gaveled the 2003 session to order on the first day until adjournment “sine die” on the 60th day, the work never slowed. Completing work on the General Appropriation Act of 2003 with enough time for Executive action before the session ended, the Legislature also addressed a number of important issues, not the least of which include public school reform and the way the state approaches funding public school capital outlay. Always the focus of a major portion of the Legislature’s work are the General Appropriation Act and Public School Support for the coming school year. This year, the Legislature addressed budgetary issues in the General Appropriation Act (Laws of 2003, Chapter 76) and the Supplemental General Appropriations Act (Laws of 2003, Chapter 83). Both bills were signed into law with partial vetoes prior to the end of the session. In total Public School Support for FY 04, the 2003 Legislature appropriated a grand total of nearly $1.9 billion in total public school support for FY 04, which is an increase of approximately $79.7 million or 4.4 percent over the FY 03 appropriation. The total appropriated program cost for FY 04 is above $1.8 billion, an increase of approximately $88.0 million or 5.1 percent over FY 03. This amount includes funding for: • a 6.0 percent salary increase for teachers and other instructional staff effective in December 2003; • a statewide, minimum teachers’ salary of $30,000, effective in December 2003, and the first phase of implementation of a three-tiered licensure structure for teachers; • a 3.0 percent salary increase for other education employees, including transportation, effective at the beginning of the fiscal year; • statewide insurance premium increases and fixed costs; and • administration of criterion-referenced tests, which will be given to students for the first time in the next school year. LESC – 03/26/03 *=Emergency Clause 1 a=as amended Also included in the appropriations bills is funding to implement funding formula changes, including: • $4.5 million (in addition to almost $4.5 million already in the “base”) to provide relief for districts experiencing rapid growth. Ever since the Public School Funding Formula was amended in 1999 to require that districts be funded on the prior year’s enrollment, growing districts have not had sufficient funds to cover current year costs; • $4.0 million to fund the Fine Arts Education Act, which allows districts to have additional funding if they offer State Department of Education (SDE) approved elementary school fine arts programs; and • $470,000 to provide for salary increments for teachers certified by the National Board for Professional Teaching Standards. The Legislature also appropriated $7.0 million in General Fund and $4.0 million in TANF dollars to fund the fourth year of the five-year phase-in of full-day kindergarten bringing the total to 80 percent of students in New Mexico who have the full-day program available to them. Other operational funding in the General Appropriation Act of 2003 provides more than $138.0 million for categorical public school support including public school transportation, supplemental distributions, instructional materials, educational technology, incentives for school improvement, and evaluation of the three-tiered licensure system. Additionally, the General Appropriation Act of 2003 provides approximately $21.8 million in related appropriations, including over $9.3 million to fund SDE agency operations. The Legislature also provided direct legislative appropriations in two separate bills, which the Governor signed, of more than $13.4 million from the General Fund and proceeds from the sale of severance tax bonds for public school capital outlay projects throughout the state (see Table 4). Among the major education measures passed by the 2003 Legislature and signed into law is HB 212, as amended, Public School Reforms. This bill makes major changes to the Public School Code [Chapter 22, NMSA 1978] and includes among its provisions: • enactment of the Assessment and Accountability Act, which complies with the federal No Child Left Behind Act of 2001; • measurement of adequate yearly progress of all students; • development of a professional three-tiered licensure structure that requires teachers to demonstrate competency prior to moving to the next level; and • changes in local governance that move personnel responsibilities from the local board to the local superintendent and school principals. The 2003 Legislature also passed a joint resolution proposing to amend Article 12, Section 6, of the state constitution to make SDE a cabinet-level department headed by a secretary of public education, who is a qualified, experienced educator appointed by the Governor and confirmed by the Senate. The proposed amendment would also create a “public education commission” consisting of ten elected members whose powers and duties would be determined by law. LESC – 03/26/03 *=Emergency Clause 2 a=as amended Another joint resolution passed by the Legislature would amend Article 12, Section 7 of the state constitution to increase the annual distribution from the state’s Land Grant Permanent Fund for public education. Voters will have the opportunity to vote on these proposed amendments in a special election to be held on September 23, 2003 as specified in enacted legislation (HB 310). Another important measure passed by the 2003 Legislature builds on legislation passed in 2001 that changed the way the state funds public school capital outlay. The legislation that was passed and signed into this session: • creates the Public School Facilities Authority; • refines the methodology for calculating the percentage of school district participation in capital projects funded by the Public School Capital Outlay Council (PSCOC); • requires a partial offset of legislative direct appropriations based on local district property wealth; • provides a minimum guarantee of $5.00 per mill per unit for maintenance needs for all districts imposing the SB 9 two-mill levy and extends the maximum time for the levy to be in effect from four to six years; and • requires PSCOC approval of preventive maintenance plans, which districts must implement in order to receive grant awards. The enclosed materials denote action taken by the 2003 Legislature relating to public schools after Executive action: • Table 1, Public School Support and Related Appropriations for FY 04, General Appropriation Act of 2003; • Table 2, Public School-Related Appropriations, General Appropriation Act of 2003; • Table 3, Public School-Related Appropriations to State Department of Education, Supplemental General Appropriations Act; • Table 4, Public School Capital Outlay; • Selected Public School-Related Language, General Appropriation Act of 2003; and • Passed, Public School-Related Legislation, Forty-Sixth Legislature, First Session, 2003. xc: Governor Bill Richardson Lieutenant Governor Diane D. Denish Members of the State Board of Education Presidents of Local Boards of Education Public School District Superintendents Other Interested Parties LESC – 03/26/03 *=Emergency Clause 3 a=as amended TABLE 1 PUBLIC SCHOOL SUPPORT AND RELATED APPROPRIATIONS FOR FY 04 GENERAL APPROPRIATION ACT OF 2003 (DOLLARS IN THOUSANDS) FY 03 FY 04 Appropriation APPROPRIATION Chapter 76 (partial veto) Laws of 2003 1 PROGRAM COST $1,696,566.5 $1,714,906.2 1 2 Resource Reallocation: 1 percent of FY 03 program cost ($18,000.0) 2 3 Adjusted Program Cost $1,696,906.2 3 4 ENROLLMENT GROWTH $3,992.0 $4,473.1 4 5 FIXED COSTS ($3,992.0) $3,325.5 5 6 INSURANCE COSTS $17,222.7 $25,000.0 6 7 COMPENSATION for Public School Employees: 7 8 Teachers (6 percent in FY 04) $32,098.3 8 9 Instructional Staff (6 percent in FY 04) $5,879.0 9 10 Other Certified and Non-Certified (3 percent in FY 04) $11,554.5 10 11 Three-tiered Licensure Structure (1st yr. to $30,000) $5,700.0 * 11 12 Full-day Kindergarten Phase IV $998.0 $7,000.0 2 12 13 Student Assessment of CRTs/Administration $2,000.0 * 13 14 National Board Certification (formula change) $470.0 14 15 Enrollment Growth (formula change) $4,500.0 15 16 Elementary Fine Arts (formula change in Chapter 83 (partial veto), Laws of 2003) $4,000.0 16 17 PROGRAM COST $1,714,787.2 $1,802,906.6 17 18 Sanding Credit Adjustment $119.0 $88,000.4 18 19 TOTAL ADJUSTED PROGRAM COST $1,714,906.2 5.1% 19 20 LESS PROJECTED CREDITS (from school district cash balances) ($16,400.0) 20 21 LESS PROJECTED CREDITS ($57,483.5) ($58,600.0) 21 22 LESS OTHER STATE FUNDS (from driver's license fees) ($2,000.0) ($3,000.0) 22 23 STATE EQUALIZATION GUARANTEE $1,655,422.7 $1,724,906.6 23 24 Dollar Increase Over FY 03 Appropriation $69,483.9 24 25 Percentage Increase 4.2% 25 26 CATEGORICAL PUBLIC SCHOOL SUPPORT 26 27 TRANSPORTATION $92,181.9 $94,500.0 27 28 Compensation (3 percent in FY 04) $1,222.2 28 29 TOTAL TRANSPORTATION $92,181.9 $95,722.2 29 30 SUPPLEMENTAL