The Legislative Education Study Committee reviewed the education provisions of House Bill 2 and staff's road map for interim work, detailing major funding changes, new program investments and a $12 million appropriation to develop a statewide student information system that would host a statewide individualized education program (IEP).

John, LESC staff member, told committee members the largest single policy change this session was tied to House Bill 63, which he said carried "$132,900,000" in adjustments to how at-risk and secondary students are funded. He also summarized pay and categorical changes in HB2, including a $135.1 million allocation for 4% salary increases for educator personnel and a $42.2 million appropriation for school meals.

Why it matters: The budget-level changes affect how recurring dollars flow to school districts and charter schools through the state equalization guarantee (SCG), change categorical and below-the-line grant funding, and create new statewide systems intended to standardize services and data across districts.

LESC staff described recurring and nonrecurring changes. John noted that some charter schools lost at-risk funding under HB63 while many districts and other charter schools gained funding, because the law shifted to a family income index to better target poverty at the school-site level. He summarized other line items in HB2: a $35.2 million decrease in the SCG connected to enrollment adjustments; $38.4 million for a school district share of rising insurance costs; $14 million for early literacy and reading supports; $40 million for career and technical education and work-based learning; and $20 million for educator fellows.

John outlined nonrecurring and programmatic appropriations that will be administered by the Public Education Department (PED), including $12 million "for that statewide SIS that would be available to districts to use," which staff said is designed so the statewide IEP can operate within an integrated student information system rather than as a standalone silo. He added that PED has convened working groups and listening sessions with districts on the SIS design and rollout.

Other notable appropriations staff highlighted included $30 million spread over three years for Indian education initiatives (in addition to the $20 million Indian Education Fund), $15 million for out-of-school-time learning and high-dosage tutoring, $10 million for expanded summer internships (up from about $5 million last year), $6 million each for community schools and school improvement, $5 million for youth behavioral health supports, $3 million for a STEM network pilot, $50 million in capital outlay for CTE maintenance and repairs distributed under the SB 9 formula, and $60 million for electric vehicle infrastructure.

Discussion vs. decisions: Committee members asked clarifying questions; no formal motions or votes were recorded during the presentation. Representative Vaca pressed whether out-of-school-time funding would be sufficient after districts reported running out of funds late in the year; staff said program usage and design will be part of the committee's interim work plan. Representative Block raised concerns from districts (citing Alamogordo and Las Cruces) that salary increases could force local hiring freezes or use of reserves, noting local budget choices and enrollment declines affect how state increases translate to district budgets. Representative Nirvam asked whether pilot districts for the statewide SIS would have assurance of continued funding; staff said the intent is to recommend recurring support but that formal decisions on ongoing funding are for the Legislature to make.

Staff emphasized evaluation and oversight for new multi-year programs. The public education reform fund (PERF) was repurposed as three-year pilot funding and will require pre-specified evaluations; staff said evaluation plans are due to the Legislature in early summer. Staff also flagged that PED and legislators will need to resolve technical and contractual questions as districts migrate student data from multiple local systems to a statewide platform and that cybersecurity and procurement could be benefits of a single system when negotiated centrally.

Quotes from the hearing: "The biggest change to how we fund schools was House Bill 63," John said, noting both winners and losers from the formula revisions. On the proposed student information system, John said, "This $12,000,000 that you've appropriated is for that statewide SIS that would be available to districts to use." Representative Vaca asked whether the out-of-school-time appropriation would be "enough money," and staff said the item is included in the interim work plan so members can track program design and spending.

Context and next steps: LESC staff framed the presentation as part of a longer road map first developed in 2022 to guide interim work in four areas: educator ecosystem, academic design, whole-child supports and overarching systems. Staff recommended further interim study of program design, data quality and long-term capital financing, and said some items will return to the committee in the fall depending on implementation progress and evaluation results. The committee did not take formal action during the presentation.