S 131 PUBLIC SCHOOL FUNDING CHANGES

Sen Mimi Stewart

Actions: [2] SEC/SFC-SEC [7] DP/a-SFC [8] DP/a - PASSED/S (35-0) [10] HEC/HAFC-HEC [12] DP-HAFC [15] DP [18] PASSED/H (50-0)

Scheduled: Not Scheduled

 Senate Bill 131 (SB 131) allows the Public School Facilities Authority (Authority) to budget on a five-year average and eliminates offsets for school districts and reduces the local match for some school districts. SB 131 eliminates the Impact Aid Credit. SB 131 eliminates offsets for charter schools and reduces the local match for pre-kindergarten projects. SB 131 provides technical cleanup. Makes appropriations.
 

 Senate Bill 131 (SB 31) amends Public Schools sections to make changes to budgeting and offsets. It eliminates the Impact Aid Credit. 

SECTION 1 amends the Public School Capital Outlay Fund of Public Schools Section 22-24-4 NMSA 1978 (being Laws 1975, Chapter 235, Section 4, as amended) to delete Subsections N and O, which are outdated, and reletters the section. 

SECTION 2 amends Public Schools Section 22-24-4.5 NMSA 1978 (being Laws 2014, Chapter 28, Section 4, as amended) to make a change in Subsection C to delete reference to Paragraph 11 and insert reference to Paragraph 9.

SECTION 3 amends Public Schools Section 22-24-5 NMSA 1978 (being Laws 1975, Chapter 235, Section 5, as amended) under Public School Capital Outlay Projects. Subsection B(2) addressing priorities for funding has item B(2)(d) deleted, which allowed the council to award school security system project grants.

Subsection 3B(5) is deleted, which removes procedures for calculating the phase one formula value, and the subsection is renumbered.

Formerly (6), now Subsection 3B(5) allows that no later than May 1 of each calendar year, the phase two formula value shall be calculated for each school district according to the provided procedure. 5(b) is deleted, which removes the value calculation that is added to the average unrestricted revenue used for capital expenditures.
 
Subsection 3 B(5) amends this subsection as follows:
… the value calculated pursuant to Subparagraph (a) of this paragraph divided by the value calculated pursuant to Subparagraph (b) of this paragraph is calculated for each school district; Reference to future years is deleted.

Subsection 3B(6) is amended to change the paragraph reference numbers to Paragraphs 8, 9, and 10.The amount to be distributed from the fund for an approved project shall equal the total project cost multiplied by the following percentage, except that in no case shall the state share be less than six percent: The formulas in (a) through (e) are deleted, and this section is relettered. 
3B(6)(a) inserts a new formula for fiscal year 2024 through fiscal year 2026, as follows:
the percentage shall be the phase two formula value plus a percentage equal to one-third of the difference between one and the phase two formula value; provided that, for school districts with fewer than 200 MEM, the percentage shall be the phase two formula value plus a percentage equal to one-half of the difference between one and the phase two formula; and (b) for fiscal year 2027 and thereafter, the percentage shall be the phase two formula value;

Subsection 3B(7) deletes the definition of “phase one formula value”. 

Deletes 3B(9) for outdated material and renumbers.

Subsection 3C inserts to include career-technical education facilities or classrooms in the standards for educational suitability of facilities applicable to all school districts.

Subsection K is deleted, the section is relettered and a new Subsection K is added as follows:

K. For any school district that received a standards- or systems-based award from the council in Fiscal Year 2023, the state share for any future phase of the project for which funding has not yet been awarded shall be the amount calculated pursuant to Subsection B of this section for fiscal year 2024, regardless of the state share at the time of the initial award.

Subsection L is inserted to provide the definition of MEM and “membership”.

SECTION 4 amends Public Schools Section 22-24-5.4 NMSA 1978 (being Laws 2004, Chapter 125, Section 10, as amended) to update a paragraph number reference change.

SECTION 5 amends Public Schools Section 22-24-6.1 NMSA 1978 (being Laws 2007, Chapter 214, Section 1, as amended) the outdated calculation in Subsection B is deleted.

SECTION 6 amends Public Schools Section 22-24-12 NMSA 1978 (being Laws 2019, Chapter 179, Section 1) of the Pre-Kindergarten Classroom Facilities Initiative in Subsection D to insert the calculation for the state share of an approved prekindergarten classroom facilities initiative project for Fiscal Years 2024-2026.

SECTION 7 amends Public Schools Section 22-25-9 NMSA 1978 (being Laws 1975 (S.S.), Chapter 5, Section 9, as amended) to update and change a paragraph reference.

SECTION 8 makes a temporary provision to eliminate all current outstanding offsets held against school districts or charter schools for a direct legislative appropriation.

SECTION 9 appropriates $25,000,000 from the Public School Capital Outlay Fund to the Public School Facilities Authority in accordance with any procedures established by the Public School Capital Outlay Council for expenditure in Fiscal Years 2024 through 2027 for distributions to school districts to improve school security infrastructure. The Public School Facilities Authority shall disburse the funds to school districts in fiscal year 2024. The school districts shall have until Fiscal Year 2027 to use the funds. Any unexpended or unencumbered balance remaining at the end of Fiscal Year 2027 shall revert to the Public School Capital Outlay Fund. 
B. School security infrastructure may include the items specified.
C. The Public School Facilities Authority shall make a distribution to each school district in Fiscal Year 2024 in a manner in which each school district receives the greater of $50,000 or a percentage as specified.
D. A distribution provided to a school district pursuant to the appropriation provided in this section shall not be subject to any local match or offset. 

SECTION 10 appropriates $75,000,000 from the Public School Capital Outlay Fund to the Public School Facilities Authority in accordance with any procedures established by the Public School Capital Outlay Council for expenditure in Fiscal Years 2024 through 2027 to make a distribution to each school district in Fiscal Year 2024 to construct, renovate and equip career-technical educational facilities and pre-kindergarten facilities or to maintain and repair public school buildings. Any unexpended or unencumbered balance remaining at the end of Fiscal Year 2027 shall revert to the Public School Capital Outlay Fund. 
B. The Public School Facilities Authority shall make the distribution to each school district in a manner such that each school district receives the greater of $100,000 or the percentage as specified.
C. A distribution provided to a school district pursuant to the appropriation provided in this section shall not be subject to any local match or offset. 

SECTION 11 makes the effective date as July 1, 2023.

 

 The Senate Eduction Committee (SEC) recommends Senate Bill 131 (SB 131) to pass as amended.
SB 131 is amended in Section 9,  Appropriation, to insert “charter schools”  throughout Subsection A and D. In Subsection A, the amendment includes charter schools in the appropriation from the School Capital Outlay Fund to improve security infrastructure for Fiscal Years 2024 through 2027.
SB 131 is amended in Subsection to insert that the Public School Facilities Authority shall make a distribution to charter schools of $25,000.

Section 10, Appropriation, charter schools are added throughout Subsection A  and C. Subsection A is amended to allow charter schools to construct, renovate and equip career-technical educational facilities and pre-kindergarten facilities or to maintain and repair public school buildings in Fiscal Year 2024.

Subsection B inserts that the Public School Facilities Authority shall make a distribution to each charter school of $50,000.

Amendment by the Senate Finance Committee:
Senate Bill 131 (SB 131) is amended by the Senate Finance Committee (SFC) to strike all the senate education committee amendments, which would delete charter schools and distributions to charter schools. The SFC also deletes from the title “Making Appropriations”.  The SFC deletes the appropriations made by Sections 9 and 10 in their entirety.