LESC pitches major changes to New Mexico public school funding formula in House Bill 63

SANTA FE — The Legislative Education Study Committee staff on Monday outlined proposed changes in House Bill 63 that would alter how New Mexico distributes its largest K‑12 funding stream, the State Equalization Guarantee.

The proposal would replace the current three‑part at‑risk index (Title I, mobility and English‑learner status) with a family income index and increase the at‑risk multiplier from 0.33 to 0.40; create a separate English‑learner factor; and raise the secondary student weight while adding sixth grade to the secondary category, LESC staff told the Senate Education Committee.

The change “replaces the current existing indicators of poverty — Title I, mobility and English learners — with the family income index methodology while also increasing that multiplier from 0.33 to 0.4,” Jessica Hathaway, deputy director of the Legislative Education Study Committee, said during the presentation.

Why it matters: the State Equalization Guarantee, commonly called the SEG or SCG in staff materials, is the flexible pot of money most districts use to support local priorities. Daniel Soupanyan, LESC public‑school finance analyst, told senators that “the vast majority of your support for public schools comes through the State Equalization Guarantee,” and that the formula assigns weights and generates program units that translate into funding for districts and charter schools.

LESC presented three fiscal recommendations alongside the policy options: the executive branch recommended about $4.372 billion for the SEG (a 4.8% increase from FY25), the Legislative Finance Committee recommended about $4.421 billion (an increase of roughly 6%), and LESC recommended $4.5 billion (an increase of about $334 million from FY25). Those totals represent staff calculations of how the formula and proposed changes would affect the overall appropriation to the SEG.

Staff described problems with current indicators. Mobility data, for example, depends on local coding practices, and Title I counts are federal data LESC staff said they cannot independently audit. “We do not have the ability to audit that data the way we would like,” Soupanyan said, which is a core reason LESC favors the family income index that matches state tax data, public benefits records and census data to student records.

House Bill 63 also would increase the secondary‑student weight; LESC noted the secondary multiplier (for grades previously counted as 7–12) was last adjusted in 1976 and that secondary programs today — career and technical education, fine arts, behavioral health services — often carry higher costs. The bill proposes raising the secondary factor and including sixth grade in that category.

Questions and next steps: Chairman Bill Soles and other senators encouraged members to meet individually with LESC analysts for technical briefings. Senator Ant Thornton asked to review the spreadsheets; Soupanyan and Hathaway said staff have published analysis and fiscal spreadsheets and offered follow‑up meetings. Committee members did not take formal action on the bill during the organizational meeting; LESC staff said hearings and bill work sessions will follow as the session proceeds.

What this does not say: LESC presented options and fiscal estimates and noted that many technical details — including final weight values, auditing rules and implementation timelines — remain for legislative debate. Staff repeatedly framed the presentation as background and urged senators to consult the detailed analysis posted with the bill when it is introduced.

LESC materials and context: staff said the family income index is a New Mexico method that matches student records with tax returns, SNAP and Medicaid data, and census information; for FY25 staff reported only nine students could not be matched in the pilot of that index. The discussion also referenced the Martinez‑Yazzie court case as the legal background for the state’s at‑risk investments and noted earlier legislative direction (House Memorial 51) to study the formula.

The committee will consider House Bill 63 during the legislative session; staff recommended more targeted briefings for members and published the LESC analysis and spreadsheets for senators to review.