New Mexico Public Education: Funding, Sufficiency, and - - PowerPoint PPT Presentation

New Mexico Public Education: Funding, Sufficiency, and Evidence-Based Policy

Charles Sallee, Deputy Director for Program Evaluation November 10, 2018

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Presentation Overview

• Summary of How New Mexico

Public Schools are Funded

• Description of the New Mexico

Education Sufficiency Lawsuit

• Review of Education Research

and Evidence-Based Programs

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Total State Funding: General Fund Revenue Forecast for FY20

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• The New Mexico Consensus

Revenue Estimating Group is comprised of economists from the LFC and the state departments of finance, taxation, and transportation.

• As of August 2018, the

Consensus Revenue Estimating Group forecasts $1.2 billion in new money for the state in FY20.

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New Mexico’s Fiscal Stability:

Recurring General Fund Year-Over-Year Revenue and Appropriations Growth

Source: LFC Files

• 15%
• 10%
• 5%

0% 5% 10% 15% FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Est. FY19 Est. Revenue Growth Appropriations Growth

Stress Testing State Energy Revenues

(Gross Receipts Taxes, Severance Taxes, and Federal Mineral Leasing)

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Source: LFC Brief (August 2018) Consensus Revenue Estimate, p.6

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New Mexico’s Lost Decade:

Employment Levels and Growth

760 780 800 820 840 860 2008 Jan 2008 Jul 2009 Jan 2009 Jul 2010 Jan 2010 Jul 2011 Jan 2011 Jul 2012 Jan 2012 Jul 2013 Jan 2013 Jul 2014 Jan 2014 Jul 2015 Jan 2015 Jul 2016 Jan 2016 Jul 2017 Jan 2017 Jul 2018 Jan

thousands of employees

New Mexico Monthly Employment Levels

(in Thousands of Employees)

• 1.0%
• 0.5%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 2011 Jan 2011 May 2011 Sep 2012 Jan 2012 May 2012 Sep 2013 Jan 2013 May 2013 Sep 2014 Jan 2014 May 2014 Sep 2015 Jan 2015 May 2015 Sep 2016 Jan 2016 May 2016 Sep 2017 Jan 2017 May 2017 Sep 2018 Jan 2018 May

New Mexico Monthly Year-over-Year Employment Growth

Source: Bureau of Labor Statistics (CES data)

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Medicaid’s Rapid Growth: From 5 Percent to 15 Percent of the State Budget

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

Percent of State General Fund Operating Budget, FY93-FY19

Public Education Higher Education Health, Hospitals, & Human Services (Excl. Medicaid) All Other Public Safety Medicaid

Source: LFC Files

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Prioritizing State Funding to meet New Mexico’s Challenges

Less Efficient: 100 Buckets to 100 Fires More Efficient: 100 Buckets to 3 Fires

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Source: LFC (May 2018) Post-Session Review.

Medicaid, $933.6 , 15% Public Safety, $436.5 , 7% Public Schools, $2,754.5 , 44% Higher Education, $792.1 , 13% Other, $1,311.2 , 21%

New Mexico General Fund Appropriations for FY19: $6.227 Billion Total (in Millions)

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State Funding for Public Schools, FY19

Operational (“Above-the-Line”) Funding:

• Allocated by a funding formula called the State Equalization Guarantee (SEG) formula.
• School districts and charter schools have discretion over how to spend operational funds.

Categorical (“Middle-of-the-Line”) Funding:

• Allocated by formulae for specific programs, e.g. transportation or instructional materials.
• School districts and charter schools must use categorical funds for categorical programs.

PED Initiative (“Below-the-Line”) Funding:

• Allocated by the Public Education Department (PED) for initiatives and pilot projects.
• School districts and charter schools generally apply for competitive grants from the PED.

$2.6 Billion $116.6 Million $90.9 Million

Source: LFC (May 2018) Post-Session Review.

• The SEG funding formula was established in 1974, and was hailed as a

national model for equalized funding for education.

• The SEG formula supports the Legislature’s policy that all students are

entitled to an equal education opportunity despite differences in local school district wealth.

• The SEG formula is student-driven: districts and charter schools are

awarded funding based on student enrollment, needs, and program participation.

• The SEG formula is an evolving formula and has been amended over

80 times in statute since its inception.

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State Equalization Guarantee (SEG) Funding Formula for Public School Operations

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• The formula uses 28 distinct components

to generate formula units and allocate over $2.6 billion in operational funds to public schools.

• Formula units are the product of the

number of students enrolled in a given program multiplied by the cost differential assigned to a program in statute.

SEG Funding Formula Components

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Basic Program Enrollment Components, $1,615.8, 63% Special Education Components, $447.3, 18% Teacher Training & Experience Index, $167.4, 7% Size Adjustment Components, $114.0, 4% At-Risk Index, $100.3, 4% Other Components, $109.2, 4%

Source: LFC analysis of PED data.

Formula Components Program Cost Funding Percent of Total

Basic Program Enrollment Components $1,615.8 63% Special Education Components $447.3 18% Teacher Training & Experience Index $167.4 7% Size Adjustment Components $114.0 4% At-Risk Index $100.3 4% Other Components $109.2 4%

Total $2,554.0 100%

Source: LFC files.

FY18 Public School Operational Funding Allocated by SEG Formula Components (in Millions)

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Historical New Mexico Public School Operational SEG Funding

$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Program Cost ARRA Funds

Source: LFC Files. Note: ARRA refers to the federal American Recovery and Reinvestment Act of 2009.

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Distribution of Increased Funding in the SEG Formula

304,413 24,627 50,000 100,000 150,000 200,000 250,000 300,000 350,000 School Districts Charter Schools

FY18 School District and Charter School Student Enrollment

Source: LFC analysis of PED data. Note: Enrollment measured as student membership (MEM)

$104.2 $122.3

$0 $40 $80 $120 $160 School Districts Charter Schools

Formula Funding Change from FY08 to FY18

(in Millions)

Source: LFC analysis of PED data. Note: Formula funding measured as program cost.

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Percent Increases in Public School Operational Spending:

$370 Million (16 Percent) Total Increase from FY07 to FY17

34% 17% 16% 16% 4%

0% 10% 20% 30% 40%

General and Central Administration (+$38M) Instruction (+$231M) All Other Categories (+$50M) Instruction and Student Support (+$45M) School Administration (+$6M)

Source: LFC analysis of PED data

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Statewide Public School Unrestricted Cash Balances (in Millions)

$107 $115 $132 $114 $141 $166 $171 $193 $207 $253 $198

$0 $50 $100 $150 $200 $250 $300 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Source: LFC analysis of PED data Note: Cash balances shown are from the end of each fiscal year.

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Federal Funding in New Mexico Public Schools (in Millions)

Source: LFC (2018) Federal Funding in New Mexico Public Schools, p.5.

New Mexico Education Sufficiency Lawsuit: Yazzie and Martinez v. State of New Mexico

• The plaintiffs alleged that New Mexico is not

meeting its constitutional obligation to provide sufficient funding and programming for at-risk public school students.

• On July 20, 2018, the District Court ruled that:

1) The funding provided to public schools is insufficient; 2) The state has provided insufficient programming to meet the needs of at-risk students; and 3) PED has not provided sufficient oversight and auditing

• ver how public education funding is locally spent.

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New Mexico Education Sufficiency Lawsuit: Legislative Actions on Funding for At-Risk Students

• During the 2018 legislative session, the

Legislature passed House Bill (HB) 188 which phases-in permanent increased funding for at-risk students over the next three years

• HB188 also aligned operational SEG

funding for teachers to teacher licensure levels.

• Due to HB188, state funding for at-risk

students will exceed New Mexico’s federal Title I funding for low income students.

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$71 $70 $77 $86 $104 $102 $100 $123

$0 $25 $50 $75 $100 $125 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Prelim

SEG Funding for At-Risk Students (in Millions)

Source: LFC files.

New Mexico Education Sufficiency Lawsuit: Legislative Actions Expanding Early Childhood Programs

• LFC analysis indicates that prekindergarten

and the extended school year “K-3 Plus” program can help close the achievement gap between low-income students and their peers.

• For FY19, the Legislature increased

funding for prekindergarten by $11 million (16 percent) and K-3 Plus by $7 million (22 percent).

• The Legislature has expanded funding for

prekindergarten by $50 million (341 percent) and the K-3 Plus by 25 million (470 percent) since FY12.

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$0 $10 $20 $30 $40 $50 $60 $70 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

Appropriations for Prekindergarten and K-3 Plus Programs

Pre-Kindergarten K-3 Plus Programs

Source: LFC files.

Evidence-Based Policy: Examining What Works in Education

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New Mexico Public Education: Academic Performance is Well Below Targets.

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Source: LFC FY19 Budget Recommendation Vol I. p.85

National Student Average Test Scores,

Grades 3-8, 2009-2013 (Green = Positive, Purple = Negative)

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Source: Stanford Education Data Archive.

National Student Average Test Score Growth,

Grades 3-8, 2009-2013 (Green = Positive, Purple = Negative)

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Source: Stanford Education Data Archive.

Findings from NM Longitudinal Data:

Students Generally Gain a Year’s Worth of Learning Each Year

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2 3 4 5 6 7 8 9

SY08 3rd Grade SY09 4th Grade SY10 5th Grade SY11 6th Grade SY12 7th Grade SY13 8th Grade Grade Level Proficiency

Grade Level Proficiency in State Reading Exam from Third through Eighth Grade, SY08-SY13 (N = 20,210 Students)

Grade Level Proficiency Statewide Average

Source: LFC (2017) Longitudinal Student Performance Analysis, p.8 Note: Average state reading scores for each year were divided by 40 (the proficiency threshold score) and then multiplied by the grade level number. A score of 40 in third grade would be a value of three in this chart.

New Mexico Achievement Gaps: Low Income Students Start Off Academically Behind

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30 32 34 36 38 40 42 44 46 SY08 3rd Grade SY09 4th Grade SY10 5th Grade SY11 6th Grade SY12 7th Grade SY13 8th Grade standards-based assessment score

Average Reading SBA Scores from Third through Eighth Grade, SY08-SY13 (N = 20,210 Students)

Non-Low-Income Grade Level Proficiency Low-Income

Source: LFC (2017) Longitudinal Student Performance Analysis. p.8

What Works in Public Education:

Eight Characteristics of High-Performing Schools.

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Source: LFC (2014) Performance and Improvement Trends: A Case Study of Elementary Schools in New Mexico. p.12

Low-income schools tend to have lower student proficiency, but many low-income schools can have high proficiency

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Source: LFC analysis of PED data.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Students Proficient in PARCC Reading Percent Low-Income Students (Free/Reduced Lunch Eligible)

Relationship between Elementary Schools' PARCC 3rd Grade Reading Proficiency and Percent of Students with Low Income, SY17 (N = 399 New Mexico Elementary Schools)

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Source: LFC (2017) Longitudinal Student Performance Analysis. p.14

Longitudinal Data:

Student Mobility affects Student Academic Achievement

0% 10% 20% 30% 40% 50% 60% Reading Math Reading Math Reading Math Third Graders Sixth Graders Tenth Graders

Percent of Students Proficient on SY16 PARCC by Number of School Changes, SY13-SY16

No Moves One Move Two Moves Three Moves Four Moves

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Longitudinal Data:

Student Absences affect Student Test Scores

80 60 40 20 20 40 60 80 SBA SY14

Source: LFC (2015) Performance, Programming, and Cost of Middle Schools. p.22

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Highly Effective or Ineffective Teaching Affects Student Achievement Over Time

Source: Southwest Education Development Laboratory. (2001). SEDLetter Vol.13(2). p.4

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Teacher Effectiveness Varies:

NM Teachers’ Salaries and Average Student Math Gains

Source: LFC (2012) Promoting Effective Teaching in New Mexico. p.17

SY11 to SY12 SBA Teacher Salary

Human Brain Development: Synapse Formation Dependent on Early Experiences.

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Human Brain Development: Early Experiences are Crucial

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Source: UNM Health Sciences Center

Prekindergarten Performance

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Source: LFC 2017 Early Childhood Accountability Report. p.7 0% 5% 10% 15% 20% 25% 30% 35%

Reading Math Percent Proficient Student Third Grade Reading Proficiency by PreK Enrollment and Free and Reduced Lunch (FRL) Status, FY16

No PreK, FRL No PreK, Not FRL

Prekindergarten Participation and 5th Grade PARCC Reading Proficiency in FY16

Prekindergarten Performance

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Source: LFC 2017 Early Childhood Accountability Report. p.7 0% 5% 10% 15% 20% 25% 30% 35%

Reading Math Percent Proficient Student Third Grade Reading Proficiency by PreK Enrollment and Free and Reduced Lunch (FRL) Status, FY16

No PreK, FRL PreK, FRL No PreK, Not FRL

Prekindergarten Participation and 5th Grade PARCC Reading Proficiency in FY16

Prekindergarten Performance

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Source: LFC 2017 Early Childhood Accountability Report. p.7 0% 5% 10% 15% 20% 25% 30% 35%

Reading Math Percent Proficient Student Third Grade Reading Proficiency by PreK Enrollment and Free and Reduced Lunch (FRL) Status, FY16

No PreK, FRL PreK, FRL No PreK, Not FRL PreK, Not FRL

Prekindergarten Participation and 5th Grade PARCC Reading Proficiency in FY16

Tracking Longitudinal Student Data: Identifies Programs that close the Achievement Gap

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Source: LFC (2017) Early Childhood Accountability Report. p.9

Data-Driven Appropriations:

Data has informed State Investment in Early Childhood Programs

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NM Recurring Early Childhood Funding History

(in Millions)

Source: LFC (May 2018) Post-Session Review. p.14

Conclusion

• New Mexico is receiving increased state

revenues from the energy sector, but this could change.

• The state’s response to the education

sufficiency lawsuit will likely lead to significant changes for New Mexico public education.

• New Mexico needs to strategically target

funding to what works and monitor education spending.

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For More Information

• http://www.nmlegis.gov/lcs/lfc/lfcdefault.aspx
• Session Publications – Budgets
• Performance Report Cards
• Program Evaluations

Charles Sallee, Deputy Director Charles.Sallee@nmlegis.gov 325 Don Gaspar – Suite 101 Santa Fe, NM 87501 505-986-4550