SB 157 — PHASED-IN TEACHER COST INDEX

For second and e e n d 18 subsequent fiscal years of operation, the budgets of state- = = l ] 19 chartered charter schools shall be based on the number of a l r i 20 program units generated using the average of the MEM on the t e a t second and third reporting dates of the prior year and its own m m 21 e d r e 22 instructional staff training and experience index and the at- c e r c 23 risk index of the school district in which the state-chartered e a n b 24 charter school is geographically located.] The budget shall be u [ submitted to the division for approval or amendment pursuant to .209436.1 - 5 - the Public School Finance Act and the Charter Schools Act.

Each locally chartered charter school shall submit to the local school board a school-based budget [Forfor theapproval firstor yearamendment. of operation, the budget of every locally chartered charter school shall be based on the projected number of program units generated by the charter school and its students, using the at-risk index and the instructional staff training and experience index of the school district in which it is geographically located.

ForThe secondapproval andor subsequentamendment fiscalauthority years of operation, the budgetslocal ofschool locallyboard charteredrelative charterto schoolsthe shallcharter beschool basedbudget onis thelimited numberto ofensuring programthat unitssound generatedfiscal usingpractices theare averagefollowed ofin the MEMdevelopment on the second and third reporting dates of the priorbudget year and itsthat own instructional staff training and experience index and the at-riskcharter index of the school districtbudget eis ewithin 17 in which the locallyallotted charteredresources. charter school is geographically e e n d 18 located.

The budgetlocal school board shall behave submittedno toveto theauthority localover schoolindividual =line =items lwithin ]the 19charter board]school's forproposed approvalbudget, but shall approve or amendment.disapprove the budget in its entirety.

The approval or amendment a l r i 20 authority of the local school board relative to the charter t e a t school budget is limited to ensuring that sound fiscal m m 21 e d r e 22 practices are followed in the development of the budget and c e r c 23 that the charter school budget is within the allotted e a n b 24 resources.

The local school board shall have no veto authority u [ over individual line items within the charter school's proposed .209436.1 - 6 - budget, but shall approve or disapprove the budget in its entirety.

SB 157 Page 5 C.

For [the ] its first year of operation, [after a locally chartered charter school converts to a state-chartered charter school or a state-chartered charter school converts to a locally chartered charter school, the charter school's budget shall be based on the projected number of program units generated usingby the averageschool ofand theits MEMstudents onusing the secondat-risk index and thirdthe reportingstaffing datescost multiplier of the priorschool yeardistrict andin which the instructionalschool staffis traininglocated, and experiencethe indexschool's andbudget shall be adjusted using the at-riskqualified indexMEM ofon the schoolfirst districtreporting indate whichof itthe iscurrent geographicallyschool located.year.

For its second and subsequent fiscal years of operation, the charter school shall e e 17 follow the provisions of Subsection A or B of this section, as e e n d 18 applicable] a charter school's budget shall be based on the = = l ] 19 projected number of program units generated by the school and aits lstudents rusing ithe 20average itsof studentsthe usingMEM on the at-risksecond index and thethird staffingreporting costdates tof ethe aprior tyear, multiplierthe at-risk index of the school district in which the school is mlocated m 21 e d r e 22 located, and the school's budgetstaffing shallcost bemultiplier." adjustedSECTION using3. the c e r c 23 qualified MEM on the first reporting date of the current school e a n b 24 year.

For its second and subsequent fiscal years of operation, u [ a charter school's budget shall be based on the number of .209436.1 - 7 - program units generated by the school and its students using the average of the MEM on the second and third reporting dates of the prior year, the at-risk index of the school district in which the school is located and the school's staffing cost multiplier." 6 SECTION 3.

For fiscal year 20192019, , the total program units for the purpose of computing the program cost shall be calculated by multiplying the sum of the program units itemized as Paragraphs (1) through (6) in this subsection by the [instructional staff training and experience index ] staffing cost multiplier and adding the program units itemized as Paragraphs (7) through (14) in this subsection.

For fiscal e e 17 year 2020 and subsequent fiscal years, the total program units e e n d 18 for the purpose of computing the program cost shallSB be157 =Page =6 lshall ]be 19 calculated by multiplying the sum of the program units itemized a l r i 20 as Paragraphs (1) and (2) in this subsection by the staffing t e a t cost multiplier and adding the program units itemized as m m 21 e d r e 22 Paragraphs (3) through (14) in this subsection.

The itemized c e r c 23 program units are as follows:

e a n b 24 (1) early childhood education;

u [ (2) basic education;

.209436.1 - 8 - (3) special education, adjusted by subtracting the units derived from membership in class D special education programs in private, nonsectarian, nonprofit training centers;

e e 17 (13) home school student activities;

and eSB e157 nPage d7 18 (14) charter school student activities.

= = l ] 19 B.

The total program cost calculated as prescribed a l r i 20 in Subsection A of this section includes the cost of early t e a t childhood, special, bilingual multicultural, fine arts and m m 21 e d r e 22 vocational education and other remedial or enrichment programs.

c e r c 23 It is the responsibility of the local school board or, for a e a n b 24 charter school, the governing body of the charter school to u [ determine its priorities in terms of the needs of the community .209436.1 - 9 - served by that board.

A school district is eligible for additional eSB e157 17Page 8 program units if it establishes within its department-approved e e n d 18 educational plan identified services to assist students to = = l ] 19 reach their full academic potential.

A school district a l r i 20 receiving additional at-risk program units shall include a t e a t report of specified services implemented to improve the m m 21 e d r e 22 academic success of at-risk students.

The report shall c e r c 23 identify the ways in which the school district and individual e a n b 24 schools use funding generated through the at-risk index and the u [ intended outcomes.

For purposes of this section, "at-risk .209436.1 - 10 - student" means a student who meets the criteria to be included in the calculation of the three-year average total rate in Subsection B of this section.

(1) for fiscal year 20192019, , Three-Year Average Total Rate x [0.106 ] 0.130 = At-Risk Index;

and (3) for fiscal year 2021 and subsequent fiscalSB years,157 ePage e9 17fiscal years, Three-Year Average Total Rate x 0.150 = At-Risk Index.

e e n d 18 B.

To calculate the three-year average total rate, = = l ] 19 the department shall compute a three-year average of the school a l r i 20 district's percentage of membership used to determine its Title t e a t I allocation, a three-year average of the percentage of m m 21 e d r e 22 membership classified as English language learners using c e r c 23 criteria established by the federal office of civil rights and e a n b 24 a three-year average of the percentage of student mobility.

u [ The department shall then add the three-year average rates.

.209436.1 - 11 - The number obtained from this calculation is the three-year average total rate.

"[NEW"TEACHER MATERIAL] TEACHER COST INDEX--LICENSURE-EXPERIENCE FACTOR--REPORT.--FACTOR-- REPORT.-- A.

The teacher cost index for a school district or charter school in its second or subsequent year of operations is the greater of 1.0 or the average of the SB 157 Page 10 licensure-experience factors of all full-time-equivalent teachers on the school district's or e e 17 charter school's payroll in October of that year who are e e n d 18 assigned classroom teaching responsibilities.

The licensure-licensure-experience = = l ] 19 experience factor of a teacher corresponds to the teacher's a l r i 20 licensure level and years of experience and is as follows:

t e a t Licensure m m 21 e d r e 22 Level Years of Experience c e r c 23 0 to 2 3 to 5 6 to 8 9 to 15 Over 15 e a n b 24 1 0.755 0.785 0.800 u [ 2 0.994 1.023 1.050 1.123 .209436.1 - 12 - 3 1.184 1.208 1.277.

(1) data on the relationship of licensure-licensure-experience experience factors to actual teacher costs;

SB 157 Page 11 C.

(1) "licensure level" is the teaching licensure e e 17 level as defined in the School Personnel Act;

and e e n d 18 (2) "years of experience" is as defined by = = l ] 19 department rule." a l r i 20 SECTION 6.

Section 22-8-25 NMSA 1978 (being Laws 1981, t e a t Chapter 176, Section 5, as amended) is amended to read:

m m 21 e d r e 22 "22-8-25.

STATE EQUALIZATION GUARANTEE DISTRIBUTION-- c e r c 23 DEFINITIONS--DETERMINATION OF AMOUNT.-- e a n b 24 A.

The state equalization guarantee distribution is u [ that amount of money distributed to each school district to .209436.1 - 13 - ensure that its operating revenue, including its local and federal revenues as defined in this section, is at least equal to the school district's program cost.

For state-state-chartered chartered charter schools, the state equalization guarantee distribution is the difference between the state-chartered charter school's program cost and the two percent withheld by the department for administrative services.

"Local revenue", as used in this section, means seventy-five percent of receipts to the school district derived from that amount produced by a school district property tax applied at the rate of fifty cents ($.50) to each one thousand dollars ($1,000) of net taxable value of property allocated to the school district and to the assessed SB 157 Page 12 value of products severed and sold in the school district as determined under the Oil and Gas Ad Valorem Production Tax Act and upon the assessed value of equipment in the school district as determined under e e 17 the Oil and Gas Production Equipment Ad Valorem Tax Act.

e e n d 18 C.

"Federal revenue", as used in this section, = = l ] 19 means receipts to the school district or state-chartered a l r i 20 charter school, excluding amounts that, if taken into account t e a t in the computation of the state equalization guarantee m m 21 e d r e 22 distribution, result, under federal law or regulations, in a c e r c 23 reduction in or elimination of federal school funding otherwise e a n b 24 receivable by the school district, derived from the following:

u [ (1) seventy-five percent of the school .209436.1 - 14 - district's share of forest reserve funds distributed in accordance with Section 22-8-33 NMSA 1978;

(1) calculate the number of program units to which each school district or charter school is entitled SB 157 Page 13 using an average of the MEM on the second and third reporting dates of the prior year;

or (2) calculate the number of program units to which a school district or charter school operating under an approved year-round school calendar is entitled using an e e 17 average of the MEM on appropriate dates established by the e e n d 18 department;

or = = l ] 19 (3) calculate the number of program units to a l r i 20 which a school district or charter school with a MEM of two t e a t hundred or less is entitled by using an average of the MEM on m m 21 e d r e 22 the second and third reporting dates of the prior year or the c e r c 23 fortieth day of the current year, whichever is greater;

and e a n b 24 (4) using the results of the calculations in u [ Paragraph (1), (2) or (3) of this subsection and the .209436.1 - 15 - [instructional staff training and experience index ] staffing cost multiplier from the October report of the prior school year, establish a total program cost of the school district or charter school;

(7) deduct the total amount of guaranteed energy savings contract payments that the department SB 157 Page 14 determines will be made to the school district from the public school utility conservation fund during the fiscal year for which the state equalization guarantee distribution is being computed;

and (8) deduct ninety percent of the amount e e 17 certified for the school district by the department pursuant to e e n d 18 the Energy Efficiency and Renewable Energy Bonding Act.

= = l ] 19 E.

Reduction of a school district's state a l r i 20 equalization guarantee distribution shall cease when the school t e a t district's cumulative reductions equal its proportional share m m 21 e d r e 22 of the cumulative debt service payments necessary to service c e r c 23 the bonds issued pursuant to the Energy Efficiency and e a n b 24 Renewable Energy Bonding Act.

u [ F.

The amount of the state equalization guarantee .209436.1 - 16 - distribution to which a school district is entitled is the balance remaining after the deductions made in Paragraphs (6) through (8) of Subsection D of this section.

In the event that a school district or charter school has received more state equalization guarantee SB 157 Page 15 funds than its entitlement, a refund shall be made by the school district or charter school to the state general fund." SECTION 7.

Using funds appropriated by the legislature for e e 17 fiscal years 2020 through 2022, the public education department e e n d 18 shall supplement a school district's or charter school's = = l ] 19 calculated program cost in each of those fiscal years:

a l r i 20 (1) if, for the fiscal year, the school t e a t district's or charter school's calculated program cost is less m m 21 e d r e 22 than its final program cost in the previous fiscal year, not c e r c 23 considering any supplement the school district or charter e a n b 24 school receives under this subsection;

and u [ (2) as follows:

.209436.1 - 17 - (a) for fiscal year 2020, in an amount equal to one hundred percent of the reduction attributable to the implementation of this act or the difference between the calculated program cost and the final program cost in the previous fiscal year, whichever is less;

and SB 157 Page 16 (c) for fiscal year 2022, in an amount equal to fifty percent of the reduction attributable to the implementation of this act or the difference between the calculated program cost and the final program cost in the previous fiscal year, whichever is less;

but (3) if, in a fiscal year, the appropriation for e e 17 the purpose of implementing this subsection is insufficient to e e n d 18 supplement school districts and charter schools in accordance = = l ] 19 with Paragraphs (1) and (2) of this subsection, then in an a l r i 20 amount equal to the school district's or charter school's t e a t prorated share of the total appropriation.

m m 21 e d r e 22 B.

On or before February 1 of 2020 through 2022, c e r c 23 the public education department shall submit a report to the e a n b 24 legislative education study committee and the legislative u [ finance committee that states, regarding the current fiscal .209436.1 - 18 - year:

SB 157 Page 17 SECTION 8.

APPROPRIATION.--Twenty-twoREPEAL.--Section million22-8-46 fiveNMSA hundred1978 forty-one(being thousandLaws four2005, hundredChapter dollars49, ($22,541,400)Section is1, appropriatedas fromamended) theis generalrepealed. fund to the state equalization guarantee distribution for expenditure in fiscal year 2019 to offset the rise in costs from the increase in the at-risk index effected by this act.

AnySECTION unexpended9. or unencumbered balance remaining at the end of fiscal year 2019 shall revert to the general fund.

eEFFECTIVE eDATE.--The 17effective SECTIONdate 9.of the provisions of this act is July 1, 2018.

REPEAL.--SectionSB 22-8-46157 NMSAPage 1978 (being Laws e e n d 18 2005,6 Chapter8 49,25 Section 1, as amended) is repealed.

= = l ] 19 SECTION 10.

EFFECTIVE DATE.--The effective date of the a l r i 20 provisions of this act is July 1, 2018.

t e a t - 19 - m m 21 e d r e 22 c e r c 23 e a n b 24 u [ .209436.1