LESC staff propose SCG revisions: raise secondary multiplier, embed Family Income Index, create standalone EL component

LESC public school finance staff presented a proposed revision to New Mexico's State Equalization Guarantee (SCG) that would redistribute existing formula funding to better target secondary programming and concentrated poverty and provide a standalone allocation for English learners.

"In FY '25, you all appropriated $4,200,000,000 to the SCG," Daniel, LESC public school finance staff, told the committee and said staff'developed the proposal after working with a stakeholder group and modeling district impacts. The proposal includes three principal changes: increase the grades 7'12 basic program factor by 0.05 (from 1.25 to 1.30), replace the current Title I/federal poverty indicator with the Family Income Index (FII) averaged over three years, and create a standalone English'learner component (including funding for the two years after EL exit).

Daniel said the secondary factor increase is intended to provide recurring, flexible funding for communities to support CTE, fine arts, additional counselors or other secondary'level needs. "Our intention is clearly for the money to primarily support CTE," he said, but added the funds are flexible and can be used for local priorities.

On poverty and at'risk funding, staff argued that the FII better captures concentrated community poverty and is auditable using state tax and benefits data. The proposal would assign charter schools their own poverty indicator rather than the indicator of their host district, staff said, and they proposed to remove the mobility component from the SCG and shift its funding into the poverty indicator because mobility reporting is administratively burdensome and error'prone.

Staff walked committee members through appendices showing district'by'district impacts and estimated an aggregate increase in formula distributions of about $132.6 million (roughly a 3.14% change): approximately $91.3 million from the secondary factor change and about $41.4 million from at'risk (FII/EL) changes. Staff emphasized that no district with secondary students would lose funding solely from the secondary factor change.

Committee members asked about comparability to other states and technical details: staff said they had reviewed Colorado and other states and planned additional outreach. Staff also noted that the FII would be calculated as a three'year average to smooth annual fluctuations. Next steps included engaging external partners to detail impacts and preparing statutory or rule text for committee review in November or December.

The committee did not take a formal vote; staff requested feedback and will return with refined modeling and proposed language.