How New Mexico Public Schools are Funded

Presentation

Espanola Public Schools

How Espanola Public Schools are Funded

Operational Funding

Nearly all state level school district funds are distributed through the Public School Fund. Revenues are derived from the following sources:

• The General Fund• The Current School Fund• Federal Mineral Leasing Revenue

Where does the money come from?

General Fund Revenue

Current School Fund

• Earnings on Invested Permanent School Fund

• Land Income

• General and Gross Receipts Tax

• Income Tax

• Interest Earnings

• Severance Taxes

• License Fees

Federal Mineral Leases

Free Textbooks

Public School Fund• State Equalization

Guarantee• Transportation• Supplemental

Distributions• Out-of–State Tuition• Emergency• Emergency Capital

Outlay

School District Operational Revenue

How is the Money Distributed?

State equalization guarantee—accounts for more than 90% of the districts’ Operational Revenue

Emergency—Provides for emergency distributions to districts in financial need (guidelines and restrictions apply

Emergency Capital Outlay—Provides for districts that have had an unexpected capital emergency that is immediate

NM Funding Formula History• Based on a model developed in 1974 by the National

Education Finance Project (NEFP) in the late 1960’s and early 1970’s.

• In applying this computer application for distribution of funds, a Governor appointed committee was formed in 1973 and their initial task was to define the educational need for the children of New Mexico.

• The committee’s second task was to design a funding formula based upon the definition of educational need that would equitably fund district’s throughout the state.

• Past methods of funding had created a high degree of disequalization among districts because of differences in local wealth, urban and rural communities, as well as diversity throughout our state.

NM Funding Formula History

• As a result of the committee’s work, the 1974 NM Legislature enacted the Public School Finance Act.

• Designed to distribute operational funds to school districts objectively and in a non-categorical manner while providing local district autonomy.

• Formula dollars (above the line) are not earmarked for specific programs; formula dollars (below the line such as instructional materials, transportation, student nutrition) are intended for specific purposes, as defined.

The intent of the 1974 Finance Act [22-8-17 through 25 NMSA 1978] is to equalize financial opportunity at the highest possible revenue level and to guarantee each New Mexico public school student access to programs and services appropriate to his or her educational needs regardless of geographic locations or local economic conditions.

Formula also encourages local school district initiatives in seeking more efficient and effective means of achieving desirable educational goals.

Goals

Formula uses cost differentials to reflect the costs associated with providing educational services to students, all of whom have different educational needs.

For example, research indicates it takes more to educate a high school student than a second grade student; and additional funding is required for bilingual students and special education students.

A program cost for each district is determined by multiplying the full-time student equivalency to be used in the calculation of the program units is the prior year average of district memberships of the 80, 120 days of school.

Program units are then added together and multiplied by the district’s Training & Experience Index to produce the adjusted program units.

Program Cost

Units generated by students served in nonprofit special education institutions;

Units generated for teachers by the National Board for Professional Teaching Standards

Units generated by the various size adjustment factors in the formula for small and rural schools and districts;

Units generated by “risk” factors;

Adjusted Program Units

Units generated by growing districts; Units generated by newly created districts; Save harmless units generated to protect

districts from a too precipitous decline in revenue

Units generated by Charter School Student Activities

Units generated by Home School Student Activities

Adjusted Program Units

The grand total of all the units is then multiplied by the unit value for that school year resulting in the district’s program cost, which is then adjusted to determine the state equalization guarantee.

Adding together revenue coming into the district as the result of a required half-mill property tax levy; and revenue generated by Impact Aid, except that revenue generated specifically for special education; and any revenue generated through Forest Reserve funds;

Multiplying the result by 75% to determine the revenue for which the state takes credit; and

State Equalization Guarantee (SEG)

Program cost is the amount of money assumed under the formula to be necessary for a given district with a particular configuration of students and educational programs to provide educational services. A district’s state equalization guarantee is the amount of money the State of New Mexico “guarantees” to provide the district to defray most program cost. The exact amount is determined by:

Subtracting the 75% credit amount from program cost.

Determine the excess cash balance as defined in Section 22-8-41 NMSA 1978.

Subtract the cash balance credit in accordance with Section 22-8-41.

Subtract cash balance credit from program cost

State Equalization Guarantee (SEG)

Questions?

Now, let’s take a look at our funding for the developing our 2015-16 Budget.

Interim Superintendent’s

Budget Development

REACHING FOR EXCELLENCE

District’s Mission

Mission: The mission of the Española Public School District is to provide and continuously improve a quality education for all students in a safe environment by implementing  an educational program that insures students are prepared to meet educational and lifelong challenges.

Superintendent’s Charge to Cabinet

• Exploration of K-12 Class Size Policy and State Waivers• Budget reductions should avoid direct impact on the

classroom, if possible• Provisions for health and safety of students and staff• Provisions for change and innovation to enhance

students’ educational experiences• Effective professional development

Superintendent’s Charge to Cabinet

• Maintenance of district’s Technology Plan and integration of technology into appropriate areas of curriculum and instruction, student management, district management

• Recommendations cannot create an overcrowding or worse situation for students; recommendations must support equal or improved learning environments

Superintendent’s Charge to Cabinet

• Achievement of cost efficiencies and identification to reduce costs

• Adherence to all current employee collective bargaining agreements

• Open communication and collaboration among all constituents to build a shared vision regarding our current operational budget

• Create a plan of implementation with short, medium and long-term goals that would fold into a comprehensive strategic plan

Superintendent’s Charge to Cabinet

• Consider reduction of employee salaries as a last resort given northern New Mexico’s high cost of living, and the high rates of poverty in Rio Arriba County.

• Federal Programs (Title Programs, IDEA) funds cannot be used to supplant operating budget.

Where We Have Been (A Three Year History in EPS)

July 1, 2013 SEG $ 29,188,134 July 1, 2014 SEG $ *30,137,080 July 1, 2015 SEG $ 29,805,959

*2013—PED adjustment to assist districts with 3% raise and technology needs to support PAARC assessments.

*

Where We Are

July 1, 2014 SEG $ 30,137,080

July 1, 2015 SEG $ 29,805,959

Reduction from

2014 to 2015 $ 331,121

Where We AreReduction from 2014 to 2015

$331,121

INCREASED COSTS FOR 2015-16

Tier Jumps and “Leveling Up” Tier Jumps $300K Health Care Premium Increases $ 65K Property and Liability Insurance Increase $ 125K Reduction in Transportation Budgets Statewide $

166K

Where We Are

Technology Salaries$ 333K

Appropriately Aligning Positions to Operational Budget $ 30K

Additional FTE—Gifted teacher, regular education, early childhood, preschool, EA’s for special ed.

$ 562K Board Expenses—Superintendent

Search(advertising, travel, etc.) $ 10K

Bottom Line

Reduce our budget for the 2015-16 school year by:

$1,922,121

Recommendations for Reducing our Budget

Telecommunications: $ 188K (shift to e-rate) Reduce Security Contract $

66K Velarde Closure $ 332K Meals for Student Athletes $

25K

Recommendations for Reducing our Budget

Reduce BOE Meeting Stipend$ 8K

Board Travel & Training $ 10K Facilities & Maintenance $

338K KDCE $ 5K Administrative Position TBD

$ 80K

Recommendations for Reducing our Budget

Contracted Grounds $ 225K

Two furlough days(all staff) $ 200K

Additional furlough day (12 month) $ 25K

Property Rental (mobile homes) $ 22K

Facilities Rentals (non school programs)$ 25K

Reduce Legal $ 55K

Recommendations for Reducing our Budget

Irwin Legal$ 10K

CEP (Food Services)$100K

Lobbyist$ 25K

Utilities$100K

Public Relations/Marketing $ 25K Telephone Repairs

$ 75K Parent Portal

$ 14K

Total of Recommended Reductions to Budget

$1,953,000

Questions and Answers

Board Discussion

Next Steps