Court: New Mexico May Offset Federal Impact Aid to Its Districts
A school district will appeal a federal appellate-court ruling late last month that affirmed the state of New Mexico’s right to withhold funds to districts based on how much federal impact aid they receive.
A panel of the U.S. Court of Appeals for the 10th Circuit, in Denver, ruled 2-1 on Dec. 30 in favor of the U.S. Department of Education’s interpretation of the federal impact-aid law regarding when states may reduce their funding for districts that receive the federal aid.
Impact aid is federal money paid to school districts whose tax bases are limited by the presence of federal installations, such as military bases or American Indian reservations. In most cases, the federal law prohibits states from offsetting the subsidy by reducing their own...
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