Lawmakers, analysts outline competing K‑12 budgets; teacher pay, meals and CTE funding top differences

Santa Fe — Analysts for the executive and two legislative budget committees outlined three competing public‑school funding packages and flagged several areas of disagreement as the Legislature begins budget deliberations.

The Department of Finance and Administration(DFA), the Legislative Finance Committee (LFC) and the Legislative Education Study Committee (LESC) all proposed higher K‑12 spending for fiscal 2026, but differed on scale and where to place money. "This is a big, complex budget — it makes up 40% or so of the entire statewide general fund recurring budget," DFA analyst Simon Miller told the Appropriations & Finance Committee.

The competing totals the presenters called out were a $234 million (5.3%) increase in the executive recommendation, a $373 million (8.4%) increase in the LESC package, and a $263 million (5.9%) increase in the LFC plan. Analysts said compensation and insurance together account for roughly 60% of the growth in the LFC and DFA proposals.

Why it matters

The amount and structure of the state equalization guarantee (SEG) and related categorical appropriations determine school districts' operating capacity across New Mexico. Differences about whether to fund some items as recurring (part of the formula) or nonrecurring (one‑time or pilot) affect districts' long‑term planning and may shift costs locally.

What the analysts said

• Compensation: All three packages prioritize higher pay. The executive and LESC recommend a 3% compensation increase; LFC proposes 4% and would raise minimum teacher salaries (the LFC/LESC proposal would move minimums from $50K/$60K/$70K to $55K/$65K/$75K for levels 1, 2 and 3). Analysts warned raising the secondary weight or minimums has long‑term enrollment implications.

• State equalization guarantee and formula changes: LESC recommended using the family income index to better target at‑risk funding to students most in need and proposed increasing the secondary student unit from 1.25 to 1.3 (grades 6–12) to support middle and secondary needs, including career technical education (CTE). The LFC said it participated in the formula study but, citing long‑term enrollment declines in secondary membership, was not recommending an increase to the secondary weight at this time.

• Universal school meals: The three recommendations place universal meals in different line items and at different amounts. DFA: $50.7 million categorical; LESC: $55.7 million categorical; LFC: $42.2 million (below‑the‑line recurring). Analysts said the LFC sum roughly equals last fiscal year's spending and that current‑year projections show an approximately $8 million shortfall being funded as a one‑time supplement.

• Categorical/below‑the‑line items and pilots: Several large nonrecurring or multi‑year pilots appear in section 9 (the packet the analysts showed the committee). Proposals include: - Educator clinical practice: roughly $60 million over three years (split into $20M per year in several recommendations) to expand year‑long residencies and clinical placements. - Math achievement, school improvement/transformation and targeted attendance interventions: three‑year pilots with differing dollar levels across recommendations (DFA and LESC each proposed smaller recurring amounts than LFC on some items). - Indian Education Fund: the executive requested $90 million as a three‑year package (roughly $30M per year); LESC proposed smaller amounts in the near term; LFC recommended using the public education reform fund for some of these proposals.

• Career and technical education (CTE): The executive and LFC proposals include about $40 million nonrecurring for CTE activity; LESC takes a larger total approach (roughly $45M plus GROW fund dollars the committee would allocate) and would also rely on formula changes to increase recurring support for secondary CTE costs. Analysts and committee members said the state has not yet fully evaluated which CTE investments produce the largest, measurable student outcomes.

• Public Education Reform Fund and GROW: LESC and LFC recommended a transfer of $150 million from the general fund into the public education reform fund to support three‑year pilots (the packet labels these as "GROW‑style" multi‑year investments). Analysts said the transfer would allow stable three‑year funding for pilots and evaluation.

• Supports for students experiencing homelessness: The LESC package proposed a pilot to give unhoused high‑school students cash supports (the analysts discussed a prior private pilot that provided about $500 per month and reported substantially higher graduation rates among participating students). LFC and DFA proposed smaller or more targeted attendance and support interventions.

Questions and clarifications from legislators

Committee members pressed analysts on distributional impacts: how changes to transportation formulas affected rural providers, whether one‑time appropriations were being used to pay for ongoing functions, how cash balances at districts (unrestricted carryover funds) had grown during the pandemic and how that affected need for new recurring appropriations.

John (LESC), Sonny Lou (LFC) and Simon Miller (DFA) all noted differences in how items are presented (categorical, recurring SEG, below‑the‑line recurring, or nonrecurring) and said that some apparent disagreements were driven by bookkeeping and fund source choices rather than disagreement about policy goals.

Formal committee action

Later in the meeting the committee adopted the consensus reports for the agencies discussed in that day's block of hearings and moved to accept the executive recommendations where staff had reached agreement. Representative Garrett moved the motion; Representative Herrera seconded. Representative Pettigrew recorded opposition on the motion as adopted in committee minutes.

What happens next

Lawmakers will debate which items to fund as recurring versus nonrecurring, whether to adopt the formula changes in the pending House Bill 63 (the LESC formula revision package) and whether to approve the $150 million transfer into the public education reform fund to support multi‑year pilots. Committee members asked for additional information on program evaluation plans and clearer, consolidated documents showing where like items appear across the executive, LFC and LESC recommendations.

Quote excerpts

"This is a big, complex budget — it makes up 40% or so of the entire statewide general fund recurring budget," DFA analyst Simon Miller said when presenting the executive recommendations. LFC public‑schools analyst Sonny Lou told members: "You'll see on line 2, that's the base amount from the previous year. And then on line 27, that is the total for state equalization guarantee appropriations."

Ending

As the session advances, the committee will need to resolve technical differences (where specific dollars are placed in the bill text and fund sources) and decide whether several pilot programs should be continued as nonrecurring investments or converted into recurring formula funding. Committee members asked staff to return with cost‑and‑outcome information on major items — notably teacher‑compensation increases, the family income index rollout, CTE scaling and evaluations of the summer literacy and residency efforts — before final budget votes are taken.