New Mexico Retools Facilities Plan Overturned by Judge

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Hoping to end a lawsuit over the way it distributes school construction money to districts, New Mexico has passed legislation that would make available $600 million over the next decade for capital-outlay projects and give preference to cash-poor communities.

Under the new law, the state would issue bonds totaling $60 million a year for the next 10 years backed by proceeds from its severance-tax fund, which is drawn from taxes paid by mining concerns. The law sets aside a portion of the new money generated by the bonds for districts less able to raise money through property taxes.

Gov. Gary E. Johnson signed the measure into law last week. The law was the state's response to a 1998 lawsuit by three school districts that include vast stretches of American Indian lands and, thus, little taxable property. That diminishes the districts' capacity to issue bonds, leaving them with few resources to bolster their infrastructures.

The plaintiff districts qualify for federal "impact aid"—which compensates districts for the presence of large tax-exempt tracts such as military bases, public-housing projects, and Indian reservations that cut into their local property-tax bases—but the state redistributes three-quarters of that money statewide.

State Judge Joseph L. Rich agreed last summer that the state's formula for distributing capital- outlay funds was unconstitutional. He gave the state a year—until July 28—to come up with a better plan.

Panel To Study Options

The new law allocates money for a study of the state's school construction and repair needs and establishes a task force to investigate a more permanent solution to the problem of the funding formula.

Robert F. Gomez

Assistant Attorney General Bennett Cohn acknowledged last week that the way the state has distributed capital-outlay funds shortchanged the cash-poor districts because the formula failed to adjust sufficiently for such districts' inability to raise money locally. The law represents "some serious dollars" for needy districts, he said.

But since Judge Rich gave no concrete guidance when he mandated a better system, no one knows if the new law will be considered sufficient to justify dismissing the lawsuit, Mr. Cohn added.

Ron Van Amberg, the lawyer for the lead plaintiff district, the 1,800-student Zuni school system south of Gallup, said he was glad that the new law would increase aid—it triples the $20 million that the state has been making available annually for capital school projects—and that in the first three years, it sets aside a third of the new money for the 22 districts qualifying for federal impact aid.

But he said the law still falls short of what his district and others need: a bigger pool of money and a permanent change to the funding-distribution formula.

"It's a good first step, but ultimately it won't satisfy the needs of the neediest districts," Mr. Van Amberg said.

An earlier measure in the legislature—backed by the plaintiff districts, the state superintendent of public instruction, the state school boards association, and others—had proposed taking $2 billion from the state's $4 billion permanent severance-tax fund over 25 years. That bill and another, less expensive proposal gave way to the compromise signed last week.

The compromise was brokered by Gov. Johnson, a Republican, who had objected to the earlier proposals as "raids" on the severance-tax fund.

Kathleen Forrer, the chief financial officer for the New Mexico Department of Education, said that the new bonds would provide only about a third of the $1.5 billion that a recent study concluded was needed for school repair and construction projects in the state's 89 districts in the next 10 years. But she called the plan "a step in the right direction," especially because of the sliding-scale funding formula that would provide more state help to districts less able to raise their own revenue.

Robert F. Gomez, the superintendent of the Gallup-McKinley County district, a plaintiff district that is 83 percent Indian-reservation land, said last week that his district needs at least $175 million for facilities. It must provide lodging for teachers at reservation schools, keep up a fleet of buses that traverse more than 5,000 square miles of remote land to take children to school, and upgrade or build new schools for its 14,000 students.

"Some of our schools have more portables than regular classrooms," he said.

Vol. 19, Issue 32, Page 33

Published in Print: April 19, 2000, as New Mexico Retools Facilities Plan Overturned by Judge
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