Local Supplements to Operating Expenses
Representatives of Save Our Schools Los Alamos met with Deputy Education Secretary for Finance and Operations Paul Aguilar Friday, Nov. 22 to discuss a letter we sent to Secretary-Designate Skandera back in September. The letter argued that the State of New Mexico should deal with its education funding crisis by allowing local jurisdictions to provide operating supplements to promote school quality above the minimum guaranteed “adequate” level of education, just as local jurisdictions are allowed to provide capital supplements to provide quality school facilities. For decades, the New Mexico Public Education Department (NMPED) has warned that local supplements to promote school educational quality would be confiscated by cutting state funding dollar-for-dollar in response to local funding contributions.
SOSLA’s analysis is that this confiscatory action would not be the result of a State constitutional requirement, nor of a statutory provision enacted into law, nor of a promulgated Rulemaking process; but rather, it would be done as a matter of administrative policy – a policy that could simply be changed by administrative fiat, as it was imposed by administrative fiat.
Deputy Secretary Aguilar has not yet endorsed or denied our request to change the policy to allow for local operating supplements for educational expenses. He has directed his staff to evaluate both our interpretation of Departmental authority and the impact that such a policy change might have on the State Equalization Guarantee. He reported that because the next legislative session is expected to be very busy for education, so he expects that the issue will not be addressed until after the legislative session ends in late February 2014.
Although we didn’t get resolution from Mr. Aguilar, we did have a productive exchange. We found him to be very engaged, and strongly committed to pursuing avenues and ideas that can enhance educational quality and opportunities for New Mexico’s children. But, this is a complex system with a lot of moving parts, and Mr. Aguilar is focused on understanding the potential repercussions of our proposed approach.
Deputy Secretary Aguilar appreciates that SOSLA is driving to maintain and improve the educational experience of Los Alamos’ children, and he was supportive of that intent. He understands that our proposal to add local funds on top of our funding share from the State Educational Equalization Guarantee doesn’t call for a statewide tax increase (growing the education pie) and doesn’t ask for a more favorable distribution formula (a bigger slice of the pie.)
In evaluating our request, Mr. Aguilar is focused on the possible impacts that opening the door to local educational operating supplements could have on the State’s current ability to control the Federal Government’s “Impact Aid” to New Mexico’s schools. Each year, the Federal Government provides about $80 million in “Impact Aid” to New Mexico School Districts. In almost all states, these payments are made directly to the qualifying school districts by the Federal Government. Because New Mexico gathers all educational funding and redistributes it under the tightly controlled Educational Equalization Guarantee, the Federal Government allows NMPED to absorb and redistribute about 70 percent of this money as part of the state formula. Very few states have this authority and to earn it New Mexico has to pass an annual disparity test, confirming that education funding is adequately “equalized” between school districts.
In order to pass the test and retain this centralized control, the State provides the Federal Government with a comparison of per pupil revenue for all New Mexico school districts. The test drops the top 5 percent of best funded districts and the bottom 5 percent of most poorly funded districts; and the remaining group must conform to a defined distribution to meet the Federal standard. Mr. Aguilar is evaluating whether granting our request would jeopardize New Mexico’s chances of meeting this test, reducing state authority with regard to Federal Impact Aid, and undermining the overall New Mexico funding approach.
We understand Mr. Aguilar’s concern and we support his careful review of this matter. However, the State Education Equalization Guarantee distributes more than $4 billion annually, with the Federal Impact Aid in play amounting to under 1.5 percent of funding distributed. Since the Federal Impact Aid formula and the State Equalization Guarantee are both heavily weighted in favor of challenged communities, SOSLA believes that Federal Impact Aid’s inclusion in or exclusion from the State distribution is of little practical consequence; the dollars would substantially flow to the same communities under either approach. SOSLA believes that the opportunity for local communities to supplement educational operating spending with local funding would create a substantially more impactful opportunity than centralized control of Federal Impact Aid provides.
If NMPED agrees to support the concept of local supplements to operating expenses, they need to decide whether to do so through a simple policy change (as we suggest) or through legislative action.
While SOSLA wants to work collaboratively and cooperatively with NMPED to solve Los Alamos’ problem without adversely impacting the NMPED approach or any other school districts, it is possible that if NMPED does not agree to provide the relief requested, then the Los Alamos Public Schools or other school districts could seek redress in court on this very limited point of law, and could prevail.
Offloading Non-Class Day Expenses to Other Revenue Sources
In the near term, to address the Los Alamos Public Schools budget problem, Mr. Aguilar challenged us to think creatively about ways to offload non-instructional expenses onto other revenue sources. He suggested that expenses outside of class day engagement (things like utilities, afterschool programs, non-teaching staff, or facilities costs) could be properly funded outside of school operating expense money, freeing up state-allocated funding for instructional excellence.
Examples might include entering into an agreement under which the County would pay school utility costs; seeking grant funding for non-instructional expenses, like the new masters program for teachers; using local capital money to buy non-facility capital items like activity buses to maximize State Funding for technology purchases and other instructional expenses.
Mr. Aguilar also shared examples of how other school districts are properly taking this approach. Las Cruces has opened two pre-college high schools built on land donated by New Mexico State University, with the University paying some of the utility expenses. Some school districts have won grants to pay for after-school programs. Other districts find ways to fund school health centers outside of operating revenue. He also recommended that the district take a hard look at current expenses, things like enrollment per school, to see if there are different ways to deliver services to students that meet community expectations while lowering costs.
In previous articles, SOSLA has argued for this type of school cost-absorption by Los Alamos County to free up funding for educational enrichment. Our suggestions have included ceding responsibility for school grounds or even entire school facilities to the County with nominal lease-back agreements, reclassifying School Nurses as County Health Department Employees, and funding school library expenses as elements of the County library system.
As we have often written, school funding challenges threaten the quality public education our community has come to expect. We are ensnared in a complex state-run funding approach that disadvantages our students and our school staff as it diverts more money to communities with greater social and economic challenges; and then restrains us from further action to address our own challenges. As our engagement with NMPED has shown, there are legitimate avenues for dealing with this paradox, but pursuing those avenues will require proactive thinking by our School and County leaders, and support from the broader community.
To learn more about Save Our Schools Los Alamos, go to http://soslosalamos.com.