LESC staff outline HB63 plan to boost secondary funding, change at‑risk index in state equalization guarantee

At a Legislative Education Study Committee hearing, LESC staff director John Cena and Legislative Finance Committee analyst Sunny Lou presented the committee’s proposal, carried in House Bill 63, to revise New Mexico’s state equalization guarantee (SEG). The proposal would raise the funding weights for sixth grade and for grades 7–12, change how the formula counts poverty and English learners, and remove the student mobility component from the at‑risk calculation.

The proposal would increase the sixth‑grade and 7–12 factors to 1.3 (from about 1.045 for sixth grade and 1.25 for grades 7–12). Under the LESC staff estimate, the combination of those secondary weight increases and the proposed changes to the at‑risk and English‑learner factors would cost an estimated $132,700,000 for the SEG if the legislature appropriates commensurate funding. Staff told the committee that roughly $79.8 million of that figure represents additional basic‑program funding for districts and about $42.1 million represents the at‑risk/English‑learner changes; charter schools would receive an estimated $10.9 million net increase under the proposal.

Why it matters: the SEG distributes state K‑12 funding to every district and charter based on units generated by students and student characteristics. LESC staff emphasized that raising the secondary weights would direct recurring formula funding to middle‑ and high‑school programming such as career and technical education (CTE) and secondary fine and performing arts programs. Staff said HB63 would also move the formula away from using a mobility component and toward a family‑income index to identify poverty at the local level, while creating a standalone English‑learner factor and a two‑year post‑exit EL factor.

Background presented to the committee noted long‑running reform efforts: House Memorial 51 (2023) requested study and consensus work on SEG adequacy; the American Institutes for Research (AIR) produced a 2008 cost study referenced in staff slides; and the Martinez‑Yazzie court rulings on constitutional adequacy have driven recent policy attention. Staff also reminded the committee that the SEG appropriation for FY25 was about $4,170,000,000, money that flows to districts and charters through the Public Education Department’s fiscal agent role.

Details of the proposal presented by staff include: - Increase sixth grade and grades 7–12 weights to 1.3 so secondary students generate more units in the basic program. - Replace the three‑part at‑risk index (Title I proxy, English learners, and mobility) with a family‑income index and a standalone English‑learner factor; eliminate the mobility component. - Proposed factor levels discussed in the presentation: a 0.4 at‑risk factor and a 0.33 English‑learner factor (staff estimated that these changes get closer to the 25–50% additional funding for at‑risk students that the Martinez‑Yazzie court mentioned in its findings). - A one‑year hold harmless provision estimated at about $4,200,000 for districts and charters that might see unit decreases because of the new calculations.

Committee members questioned staff on definitions and evidence. Senator Steinborn asked how “at‑risk” is defined; staff said the formula currently uses Title I membership, English‑learner percentage and mobility as the operational funding proxies and noted that the Martinez‑Yazzie court used a broader description that included Native American students, English learners, students with disabilities and low‑income students. Staff also discussed assessment trends, noting that national NAEP results show a post‑pandemic dip while state assessment changes complicate direct comparisons.

Staff stressed that HB63 would not require districts to spend the new money on specific programs; rather, it would generate recurring funds at the secondary level that local districts and charter governing bodies could use for priorities such as CTE, counselors, social workers or other student supports. Staff also noted that charter schools currently receive the at‑risk index of the district in which they are located; under the family‑income index charter schools would have their own measured at‑risk indices.

Timing and legal context: LESC staff said the Martinez‑Yazzie litigation remains active. Plaintiffs filed a motion in September 2024 asking for a remedial plan and asked LESC to lead coordination; PED filed a response in November 2024 that did not oppose a plan but argued the department should lead development. Staff said plaintiffs had a filing deadline (February 6 in the materials) to respond to PED’s reply and expected plaintiffs to ask the court to schedule a hearing afterward.

Votes and formal action: the committee discussion in the transcript reviewed the LESC staff proposal as represented in HB63; no committee vote or formal action on HB63 occurred during the recorded meeting. Staff said HB63 may be heard in the coming session and that related budget recommendations would be available soon.

The committee discussion also covered broader system issues — teacher recruitment and retention, principal training, and whether the state should provide a clearer definition and monitoring of how at‑risk funds are spent — but the written proposal presented to members was the HB63 package of weight and at‑risk changes and the short hold harmless.

What's next: staff said HB63 reflects the committee’s interim work and that legislators will receive staff materials as they move to session. The Martinez‑Yazzie filings are pending in court and could affect future legislation or implementation timelines.