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Financing Education in NM

All types of questions circulated at the Learning Alliance Forum on Education Finance on January 26, 2012.

How is education funded in New Mexico?How equitable is New Mexico’s education financing?

How can state education finance policy be designed for improvement & innovation?

How can districts and principals re-allocate funds to improve education?

What are the implications of next generation learning (online and competency) on funding schools? 

Sharing their perspectives,Don Moya, Chief Financial Officer, Albuquerque Public Schools, Myra Segal, Voices for NM's Children and Robert Baade, Principal, Robert F. Kennedy High School and member of the Funding Formula Task Force raised a number of important issues to consider in understanding NM's education financing policies and practices.

Short History of Education Finance in NM
In FY12, New Mexico will allocate about $2.3 billion for K-12 education. Nearly all state-level school district operational funds are distributed through the Public School Fund. New Mexico’s Constitution requires that a “uniform system of free public schools sufficient for the education of and open to all children of school age in the state shall be established and maintained”. However, there is no constitutional definition for what school age means or what defines education and educational services. When the constitution was created students spent much less time in school. In today’s world, we increasingly include early childhood development, pre-school, and ensuring that all students (even those that disengage from school for awhile) graduate with transitional support to career and colleges. Click here for more information on how NM Schools are Funded.  
In 1974 the New Mexico Legislature enacted the Public School was acclaimed as one of the most innovative of the school finance plans at that point in time. The formula is designed to distribute operational funds to school districts objectively and in a noncategorical manner while providing for local school district autonomy. Formula dollars received by local districts are not earmarked for specific programs. Within statutory and regulatory guidelines,school districts have the latitude to spend their dollars according to local priorities. New Mexico’s education system is based on state funding. Hawaii and NM are the only two states that do not draw on property tax. Much of NM would be unable to depend on property taxes because of the amount of land owned by the military, government, and tribes. (Note: Hawaii’s state public education system runs the schools. There are no school districts or school boards.)   
 
Key Issues
  1.  Adequacy: In 2006 a state-appointed, independent, Funding Formula Task Force was convened to determine whether our public schools were being provided sufficient funding. After a comprehensive study by AIR, it was determined that nearly every New Mexico school district, was operating with insufficient funding. The recommendation was a 28% increase to ensure adequate funding and a 13% increased to provide sufficient funding. However the legislature failed to address this funding gap. Thus, NM's schools continue to operate well below the recommended funding levels.  Two different approaches were discussed at the event: 1) Litigation and 2) Additional revenue streams such as that being promoted by the  Kids Now initiative to use the Land Grant Permanent Fund for early childhood programs.
  2. Finetuning the Formula: Recent budget challenges, analysis and studies by various groups have highlighted acute formula problems, such as the ineffective allocation of resources to high need areas, administrative complexity, and weakening oversight. Staff from the Legislative Finance Committee (LFC) and Legislative Education Study Committee (LESC) conducted a joint evaluation to assess the funding formula’s efficacy in allocating resources and assess the oversight and administration of the formula by the Public Education Department to ensure resources are allocated in a fair, accurate and equitable manner.
  3. Keeping an Eye on Equity: There are different types of equity beyond allocation to districts across the state. We also need to keep an eye on equity within districts and within schools.
  4. Access: The funding formula may be acting as a obstacle to addressing our graduation crisis.  Funding is determined based on attendance and on prior year funding. Students who are not well-served by schools and fall off-track, need to take time off for work or take care of family, or are denied the opportunity to re-enroll are not included in funding formula.  
  5. Parent Power: Parents understand the value of education. However, it is hard for individual parents to engage in the democratic process in a meaningful way. It is important for parents to work together through organizations such as  Partnership for Community Action, Albuquerque Interfaith [505.268.3991‎] and PEAK.
  6. Innovation: The education finance policy conversation in NM is dominated by adequacy and the funding formula. There is not enough attention to how education financing can be a powerful tool at the state, district, and school level to drive innovation and improvement.  Other states are looking at ways to increase flexibility for districts to manage funds.  Many leading districts are seeking ways balance accountability with autonomy so that principals can manage their budgets more creatively to respond to student needs.  Two sources of information about ways to use education financing to drive improvement are the Center for Reinventing Public Education and Education Resource Strategies.

__________About the Author__________

Chris Sturgis is a founding member of the Learning Alliance.  She is Principal of MetisNet, a consulting firm that specializes in supporting foundations and special initiatives in strategy development, coaching and rapid research.  In addition to the Learning Alliance, she is involved with CompetencyWorks and the Youth Transition Funders Group, managing the Connected by 25 blog.

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This post does not represent the views of the Learning Alliance or any of its partner organizations.  The photograph was taken by Chris.