HAFC presents public education budget scenario with $10M recurring and $30M one‑time for secondary reforms; hold‑harmless proposed for formula changes

A HAFC work group reviewed a staff scenario for the public education budget that adds $10,000,000 in recurring funding for secondary education reforms and a $30,000,000 one‑time appropriation to the Public Education Department for targeted secondary efforts, while recommending a two‑year hold‑harmless for some districts and charter schools facing funding changes.

The scenario, described by staff and PED representatives during the meeting, would increase the recurring School Support Unit (SCG/SEG) on line 22 by $10,000,000 and add a nonrecurring $30,000,000 on line 85 to PED for program oversight and targeted supports. Sunny, a staff member at the Public Education Department, summarized the change as: “The 10,000,000 on line 22 would go to schools. The 30,000,000 on line 85 would go to PED.”

Why it matters: the combined recurring and nonrecurring approach is intended to both raise unit funding that flows directly to schools and give the department resources to target interventions — for example, supports for students off track for four‑year graduation, targeted tutoring, or other performance‑measured programs. Committee members pressed staff on whether a one‑year nonrecurring amount would be sufficient for implementation; Representative Herrera said she did not “see one‑year funding working” for large programs and urged recurring funding when possible.

Discussion highlights - Hold‑harmless for formula changes: Staff explained a proposal to convert a K‑12 unit support appropriation into a two‑year funding‑formula hold‑harmless to smooth the transition from current at‑risk and English‑learner factors to a new family income index. Sunny said the hold‑harmless would “cover a year or two so that they have some time to transition their programming” as some schools could lose or gain funding under the school‑level at‑risk recalculation. Committee members debated whether the hold‑harmless should be one or two years; the HAFC scenario uses two years but committee members noted that could be adjusted.

- Impact on charters and districts: Staff gave a concrete example of Albuquerque Public Schools, explaining that under current law a charter receives the at‑risk factor of the district in which it is located. The family income index would allow a school‑level at‑risk calculation that could shift funding between schools and charters; the hold‑harmless is intended to blunt abrupt losses while districts and schools adapt.

- Secondary education reforms: Committee staff and PED described the recurring $10,000,000 as a “wiggle room” to stay within a 6% statewide target for the general fund while funding secondary reforms. The $30,000,000 nonrecurring sum would be available to PED to distribute more narrowly with performance measures attached.

Other notable line items discussed - Indian education: a three‑year appropriation of $10,000,000 per year (total $30,000,000) was proposed for Indian education initiatives (line 94), moving funding from other lines into section 5.

- Universal school meals and educator supports: the scenario includes a $5,000,000 appropriation to reflect potential cost overruns for universal school meals and raises the educator fellows line to $20,000,000, aligning with other recommendations.

- Summer enrichment internships: staff described a $5,000,000 increase for internships (line 102). PED staff explained the program started with federal relief funds, has been run through municipalities and tribal entities, and that an earlier $5,000,000 award went to Las Cruces this year; the new funding would expand the program statewide if allocated accordingly.

- Career and technical education (CTE): the scenario holds total CTE‑related funding at $40,000,000 by combining $30,000,000 from the general fund and $10,000,000 from the CTE fund (lines 109 and 159). Members emphasized the importance of CTE to rural schools and workforce goals and discussed options to spread some funds over multiple years.

- Public Education Reform Fund (PERF/PERF transfer): the scenario reduces the transfer to the public education reform fund from roughly $150,000,000 (under earlier scenarios) to about $84,000,000. Staff noted items that PERF would pay (lines 132–146), including new appropriations for Hispanic, bilingual, multicultural and Black Education Act efforts, a $1,000,000 wellness rooms pilot, and $6,300,000 for supports for students who are unhoused.

Other operational and policy questions - Enrollment credits and unit values: staff reminded members that credits designed to adjust for enrollment declines and other formula mechanics will affect unit values and net funding; committee members asked how credits and hold‑harmless provisions interact with increases in the formula.

- STEM/STEM Innovation and STEAM funding: members raised concerns that past STEM/STEAM appropriations (including a $6,000,000 reform fund item and a separate STEM Innovation Network flow‑through to higher education) are not included in the HAFC scenario and asked staff to follow up.

- Local programs and capital funds: members asked about smaller line items and local programs, including funding for locally sourced school food purchases (New Mexico Grown) and SB9 capital funding (the public school capital improvements mechanism). Staff described SB9 as the existing mechanism for school capital that uses a local two‑mill levy and a state gap fill when local revenue falls short.

No final votes or formal actions were taken. Committee members and staff said the scenario was presented for feedback and that the committee would reconvene to finalize recommendations on Monday.

Ending: Committee staff encouraged members to submit additional questions; PED staff and LFC/LESC staff offered to provide follow‑up details and to track pending legislation (for example, House Bill 63 and other bills referenced by members) that could affect recurring or nonrecurring allocations.