NEA-NM Legislative Hotline

Fight Over Pay Cuts Moves to Senate

The House has passed a budget, House Bill 2, the General Appropriations Act and House Bill 854; together these two measures are a plan to have all PERA and ERA active members pay an extra 1.5% of salary to PERA or ERA.  The budget then calls for the employer (the state, universities, and school boards) to reduce its contribution to PERA/ERA by 1.5% of salary.   The argument from the House Appropriations and Finance Committee is this: 

The money still belongs to employees by being deposited in the Educational Retirement Fund; any employee who does not intend to retire and draw a retirement benefit can withdraw the funds when they are no longer employed in public education. 

House Bill 854, sponsored by Representative Saavedra, is a part of the budget package and will cut school employees’ and state employees pay by 1.5% for two years. House Bill 854 increases the employee contribution to the pension fund 1.5% and reduces what the state is paying into the pension fund 1.5%. The measure would take hundreds of dollars out of the average school employee’s pocket. House Bill 854, well intentioned thought it might be, targets a select group of employees for a pay cut.

The House Appropriations and Finance Committee leadership who met with NEA-NM and  AFT NM leaders also made the case that these cuts were in lieu of possible layoffs in school districts. We applaud the House and the Senate for balancing the FY09 budget without cutting essential public services. But we believe that we can only weather the recession and achieve fiscal stability through long-term revenue fixes. We urge lawmakers to make the right decisions and look to

New Mexico’s tax structure to balance the budge and provide long overdue revenue fixes to the economy. 

The House budget plan, to our knowledge, contains not one proposal to raise revenue other than asking public employees to pay money to the general fund.

 

House Bill 2, the General Appropriations Act is awaiting a hearing before the Senate Finance Committee.  This hearing will probably occur quickly.  However, the plan to reduce public employee salaries cannot work unless House Bill 854 also passes. This measure received two committee referrals. Its first stop is the Senate Public Affairs Committee.  That hearing could also occur very very quickly.  Call  Committee Members with this simple message:

Choose a new revenue source to use to balance the budget.  Don’t single out public employees with a 1.5% pay cut to balance the budget.

Members of the committee are:

Senator	Dede Feldman - (D) Chair	505-986-4482
Senator	Tim Eichenberg - (D) Vice Chair	505-986-4859
Senator	Vernon D. Asbill - (R)	505-986-4393
Senator	Mark Boitano - (R)	505-986-4366
Senator	Mary Jane M. Garcia - (D)	505-986-4726
Senator	Eric G. Griego - (D)	505-986-4862
Senator	George K. Munoz - (D)	505-986-4387
Senator	Cynthia Nava - (D)	505-986-4834
Senator	Gay G. Kernan - (R)	505-986-4274

 

 

 

In addition to being, on its face, a highly unfair targeted tax increase, the plan to dock workers 1.5% is a direct hit to the New Mexico economy.  It targets New Mexico families and only New Mexico families.  Further, the vast majority of the affected workers make between $15,000 and $70,000/year.  These are working class and middle class families who spend the money they take in, helping to keep the New Mexico economy moving.

 

Follow this Link to Send a message to Senators and the Governor

 

Balance the Budget with Targeted Cuts and Targeted Revenue Increases!

 

We think raising revenues is a better way to balance the budget.  One method is instituting what is called combined reporting of corporate income taxes. Combined reporting is NOT a tax increase.  This approach is contained in a bill carried by Senator Peter Wirth, Senate Bill 389. It is more closely described as closing a loophole, but even more accurately, it is simply a way of enforcing existing tax laws.  This enforcement is predicted to capture about $70 million/year in taxes that are currently being hidden.

 

Over the last 20 years, national and multinational corporations have become more and cleverer about tax avoidance. One way for a national company to avoid paying their taxes owed is to hide or move profits made in a state with taxes on corporate profits (like New Mexico) to a state with no corporate tax (like Delaware).

 

There are many techniques that the big companies use to "hide" or "move" their profits out of New Mexico.  A popular one is to create a Delaware shell corporation to "own" intellectual property, like the Geoffrey Giraffe character at Toys R Us.  Then that Delaware shell corporation charges the New Mexico Toys R Us for the use of the giraffe, usually charging an amount similar to the profits made by Toys R Us in New Mexico.

 

So while a local New Mexico toy store that makes a profit of, say, $10 million/year pays taxes on that full amount of profit, Toys R Us, thanks to clever lawyers and accountants, might pay nothing even on the same profits.

 

There are dozens of variations on this tax dodge.  Companies pay "rent" to themselves to shift profits overseas or to low- or no-tax states using Real Estate Investment Trusts.  Companies have a fraudulent subsidiary sell inventory to real subsidiaries at inflated prices to make profits in states like New Mexico look smaller while profits in Delaware balloon.

The bottom line is that legislators could generate up to $70,000,000 to prevent the cut in public school and state employee pay without raising taxes on New Mexicans!

Additionally two other bills would raise funds specifically for public schools:

Senator Cynthia Nava’s Senate Bill 412 would increase Gross Receipts Taxes by .75% and House Bill 346, has also been introduced by Representative Stewart in the House.  This bill provides the new funding needed through a combination of repeal or recent high earners tax personal income tax cuts and a half percent increase in Gross Receipts Tax.

Follow this Link to Send a message to Senators and the Governor

 

Call House Members Before 10:30 AM Today

House Bill 854, sponsored by Representative Saavedra, is a part of the budget package and will cut school employees' and state employees' pay by 1.5% for two years. House Bill 854 increases the employee contribution to the pension fund 1.5% and reduces what the state is paying into the pension fund 1.5%. The measure would take hundreds of dollars out of the average school employee's pocket. House Bill 854, well intentioned thought it might be, targets a select group of employees for a pay cut.

The House budget plan, to our knowledge, contains not one proposal to raise revenue other than asking public employees to pay money to the general fund.

In addition to being, on its face, a highly unfair targeted tax increase, the plan to dock workers 1.5% is a direct hit to the New Mexico economy.  It targets New Mexico families and only New Mexico families.  Further, the vast majority of the affected workers make between $15,000 and $70,000/year.  These are working class and middle class families who spend the money they take in, helping to keep the New Mexico economy moving.

This measure is on the House calendar for action today. Make a last ditch effort to reach your House member by phone before today's floor session at 10:30 AM with the simple message: "Oppose HB 854.  It is an unfair attack on public employees. It amounts to a highly unfair targeted tax increase.  This plan to dock workers 1.5% of their take-home pay is a direct hit to the New Mexico economy.  It targets New Mexico families and only New Mexico families.  Further, the vast majority of the affected workers make between $15,000 and $70,000/year"

Click Here For Message Suggestions.

Tell Legislators: Raise Revenues, Don't Cut School Employee Pay!

Red ink continues to flow in Santa Fe, as new revenue estimates indicate a $600,000,000 revenue shortfall for next year.  Even with stimulus funds taken into account, the word out of the House Appropriations and Finance Committee is not good.  It appears the committee originally tried to make up most of the shortfall with federal stimulus funds and by cutting the half of the budget that is not public education.  However, with a shortfall exceeding 10% of the total budget, this has become exceedingly difficult without any revenue increases!

 

The House Appropriations Committee has passed a budget, House Bill 2, the General Appropriations Act and House Bill 854; together these two measures are a plan to have all PERA and ERA active members pay an extra 1.5% of salary to PERA/ERA.  The budget then calls for the employer (the state, universities, and school boards) to reduce its contribution to PERA/ERA by 1.5% of salary.   The argument from the House Appropriations and Finance Committee is this:  

 

The money still belongs to employees by being deposited in the Educational Retirement Fund; any employee who does not intend to retire and draw a retirement benefit can withdraw the funds when they are no longer employed in public education. 

 

House Bill 854, sponsored by Representative Saavedra, is a part of the budget package and will cut school employees’ and state employees pay by 1.5% for two years. House Bill 854 increases the employee contribution to the pension fund 1.5% and reduces what the state is paying into the pension fund 1.5%. The measure would take hundreds of dollars out of the average school employee’s pocket. House Bill 854, well intentioned thought it might be, targets a select group of employees for a pay cut.

 

The House Appropriations and Finance Committee leadership who met with NEA-NM and AFT NM leaders also made the case that these cuts were in lieu of possible layoffs in school districts. We applaud the House and the Senate for balancing the FY09 budget without cutting essential public services. But we believe that we can only weather the recession and achieve fiscal stability through long-term revenue fixes. We urge lawmakers to make the right decisions and look to New Mexico’s tax structure to balance the budge and provide long overdue revenue fixes to the economy. 

 

The House budget plan, to our knowledge, contains not one proposal to raise revenue other than asking public employees to pay money to the general fund.

 

In addition to being, on its face, a highly unfair targeted tax increase, the plan to dock workers 1.5% is a direct hit to the New Mexico economy.  It targets New Mexico families and only New Mexico families.  Further, the vast majority of the affected workers make between $15,000 and $70,000/year.  These are working class and middle class families who spend the money they take in, helping to keep the New Mexico economy moving.

 

Balance the Budget with Targeted Cuts and Targeted Revenue Increases!

 

We think raising revenues is a better way to balance the budget.  One method is instituting what is called combined reporting of corporate income taxes. Combined reporting is NOT a tax increase.  This approach is contained in a bill carried by Senator Peter Wirth, Senate Bill 389. It is more closely described as closing a loophole, but even more accurately, it is simply a way of enforcing existing tax laws.  This enforcement is predicted to capture about $70 million/year in taxes that are currently being hidden.

 

Over the last 20 years, national and multinational corporations have become more and cleverer about tax avoidance. One way for a national company to avoid paying their taxes owed is to hide or move profits made in a state with taxes on corporate profits (like New Mexico) to a state with no corporate tax (like Delaware).

 

There are many techniques that the big companies use to "hide" or "move" their profits out of New Mexico.  A popular one is to create a Delaware shell corporation to "own" intellectual property, like the Geoffrey Giraffe character at Toys R Us.  Then that Delaware shell corporation charges the New Mexico Toys R Us for the use of the giraffe, usually charging an amount similar to the profits made by Toys R Us in New Mexico.

 

So while a local New Mexico toy store that makes a profit of, say, $10 million/year pays taxes on that full amount of profit, Toys R Us, thanks to clever lawyers and accountants, might pay nothing even on the same profits.

 

There are dozens of variations on this tax dodge.  Companies pay "rent" to themselves to shift profits overseas or to low- or no-tax states using Real Estate Investment Trusts.  Companies have a fraudulent subsidiary sell inventory to real subsidiaries at inflated prices to make profits in states like New Mexico look smaller while profits in Delaware balloon.

 

The bottom line is that legislators could generate up to $70,000,000 to prevent the cut in public school and state employee pay without raising taxes on New Mexicans!

 

 Senate Bill 595, sponsored by Senator George Munoz and Senator John M. Sapien, would provide new money for education by charging a lodgers tax of 10 percent on hotel, motel, RV parks and similar visitor accommodations statewide. It is estimated it could generate some $79 million, of which $39 million would go to a state lodgers education fund to be administered by the Public Education Department.

 

Additionally two other bills would raise funds specifically for public schools:

Senator Cynthia Nava’s Senate Bill 412 would increase Gross Receipts Taxes by .75% and House Bill 346, has also been introduced by Representative Stewart in the House.  This bill provides the new funding needed through a combination of repeal or recent high earners tax personal income tax cuts and a half percent increase in Gross Receipts Tax.

 

Our message to legislators:

 

Choose a new revenue source to use to balance the budget.  Don’t single out public employees with a 1.5% pay cut to balance the budget.

 

Follow this link to send a message to legislators and the Governor

Message to Legislators: Don't Balance the Budget by Cutting Public Employee Pay!

The House Appropriations Committee is poised to pass a budget that contains a plan to have all PERA and ERA active members pay an extra 1.5% of salary to PERA/ERA.  The budget then calls for the employer (the state, universities, and school boards) to reduce its contribution to PERA/ERA by 1.5% of salary. Red ink continues to flow in Santa Fe, as new revenue estimates indicate a $600,000,000 revenue shortfall for next year.  Even with stimulus funds taken into account, the word out of the House Appropriations and Finance Committeeis not good.  It appears the committee is trying to make up most of the shortfall with federal stimulus funds and by cutting the half of the budget that is not public education.  However, with a shortfall exceeding 10% of the total budget, this has become exceedingly difficult. 

 

The Budget emerging from the House Appropriations and Finance Committeewill cut additional funds from public school support by shifting 1.5% of retirement contributions from school districts to employees!  The funding is currently sent to districts for this portion of retirement would be cut from the budget.  The argument from the House Appropriations and Finance Committeeis this:  the money still belongs to employees by being deposited in the Educational Retirement Fund; any employee who does not intend to retire and draw a retirement benefit can withdraw the funds when they are no longer employed in public education.  The House Appropriations and Finance Committeeleadership who met with NEA-NM and AFT NM leaders also made the case that these cuts were in lieu of possible layoffs in school districts.

House Bill 854, sponsored by Representative Saavedra, is a part of the budget package and will cut school employees’ and state employees pay by 1.5% for two years. House Bill 854 increases the employee contribution to the pension fund 1.5% and reduces what the state is paying into the pension fund 1.5%. The measure would take hundreds of dollars out of the average school employee’s pocket. The bill intentionally targets a select group of employees for a pay cut. We applaud the House and the Senate for balancing the FY09 budget without cutting essential public services. But we believe that we can only weather the recession and achieve fiscal stability through long-term revenue fixes. We urge lawmakers to make the right decisions and look to New Mexico’s tax structure to balance the budge and provide long overdue revenue fixes to the economy.There are about 20,000 state employees in PERA, 20,000 university employees in ERA, and 30,000 public school employees in ERA.  The 1.5% pay cut amounts to approximately $42 million/year. It appears the committee is trying to make up most of the shortfall with federal stimulus funds and by cutting the half of the budget that is not public education.  However, with a shortfall exceeding 10% of the total budget, this has become exceedingly difficult. 

 

However, the House budget plan, to our knowledge, contains not one proposal to raise revenue other than asking public employees to pay money to the general fund.

 

In addition to being, on its face, a highly unfair targeted tax increase, the plan to dock workers 1.5% is a direct hit to the New Mexico economy.  It targets New Mexico families and only New Mexico families.  Further, the vast majority of the affected workers make between $15,000 and $70,000/year.  These are working class and middle class families who spend the money they take in, helping to keep the New Mexico economy moving.

 

We think raising revenues is a better way to balance the budget.  One method is instituting what is called combined reporting of corporate income taxes. Combined reporting is NOT a tax increase.  This approach is contained in a bill carried by Senator Peter Wirth, Senate Bill 389. It is more closely described as closing a loophole, but even more accurately, it is simply a way of enforcing existing tax laws.  This enforcement is predicted to capture about $70 million/year in taxes that are currently being hidden.

 

Over the last 20 years, national and multinational corporations have become more and cleverer about tax avoidance. One way for a national company to avoid paying their taxes owed is to hide or move profits made in a state with taxes on corporate profits (like New Mexico) to a state with no corporate tax (like Delaware).

 

There are many techniques that the big companies use to "hide" or "move" their profits out of New Mexico.  A popular one is to create a Delaware shell corporation to "own" intellectual property, like the Geoffrey Giraffe character at Toys R Us.  Then that Delaware shell corporation charges the New Mexico Toys R Us for the use of the giraffe, usually charging an amount similar to the profits made by Toys R Us in New Mexico.

 

So while a local New Mexico toy store that makes a profit of, say, $10 million/year pays taxes on that full amount of profit, Toys R Us, thanks to clever lawyers and accountants, might pay nothing even on the same profits.

 

 

There are dozens of variations on this tax dodge.  Companies pay "rent" to themselves to shift profits overseas or to low- or no-tax states using Real Estate Investment Trusts.  Companies have a fraudulent subsidiary sell inventory to real subsidiaries at inflated prices to make profits in states like New Mexico look smaller while profits in Delaware balloon.

 

The bottom line is that legislators could raise up to $70,000,000 to prevent the cut in public school and state employee pay without raising taxes on New Mexicans!

 

 Senate Bill 595, sponsored by Senator George Munozand Senator John M. Sapien, would provide new money for education by charging a lodgers tax of 10 percent on hotel, motel, RV parks and similar visitor accommodations statewide. It is estimated it could generate some $79 million, of which $39 million would go to a state lodgers education fund to be administered by the Public Education Department.

 

 

Additionally two other bills would raise funds for public schools:

Senator Cynthia Nava’s Senate Bill 412 would increase Gross Receipts Taxes by .75% and House Bill 346, has also been introduced by Representative Stewart in the House.  This bill provides the new funding needed through a combination of repeal or recent high earners tax personal income tax cuts and a half percent increase in Gross Receipts Tax.

 

Our message to legislators:

Choose a new revenue source to use to balance the budget.  Don’t single our public employees with a 1.5% pay cut to balance the budget.

Weekend Legislative Update

Budget Cuts Emerge for Education

 

Red ink continues to flow in Santa Fe, as new revenue estimates indicate a $600,000,000 revenue shortfall for next year.  Even with stimulus funds taken into account, the word out of the House Appropriations and Finance Committee is not good. 

 

It appears the committee is trying to make up most of the shortfall with federal stimulus funds and by cutting the half of the budget that is not public education.  However, with a shortfall exceeding 10% of the total budget, this has become exceedingly difficult. 

 

The Budget emerging from the House Appropriations and Finance Committee will cut an additional $40,000,000 from public school support by shifting 1.5% of retirement contributions from school districts to employees!  The $40,000,000 currently sent to districts for this portion of retirement would be cut from the budget.  The argument from the funders is this:  the money still belongs to employees by being deposited in the Educational Retirement Fund; any employee who does not intend to retire and draw a retirement benefit can withdraw the funds when they are no longer employed in public education.  The House Appropriations and Finance Committeeleadership who met with NEA-NM and AFT NM leaders also made the case that these cuts were in lieu of possible layoffs in school districts.

 

We have been working with legislative leaders to make those cuts as painless as possible.  We still have disagreement on just how deep they need to be, on how to make the best use of federal stimulus funds, and on exactly how the cuts should be made. We continue to argue that rather than drastic cuts, the legislature needs to find some additional revenues.  On Monday, we will be meeting with representatives of American Federation of State, County, and Municipal Employees (AFSCME), who represent state employees who will also be subject to the same retirement changes in the Public Employee Retirement Association (PERA).  We will be working on creating joint strategies to urge the legislature to raise revenues.

 

However, any cuts will be painful as the legislature seeks to avoid increases in class size, layoffs of school employees, or reduction in work days for school employees.  Everyone knows that we live in serious economic times and that mitigating rather than preventing pain has become the name of the game!  As the budget begins to move to the House Floor and the Senate, we will keep working with legislative leaders to "mitigate pain." and keep you informed.  For now, just keep urging legislators to protect public school funds and school employee benefits.

Follow this link to send an email on school employee health benefits

Follow this link to ask the legislature for adequate funding next year.

 

Some Good News

 

Senator Pete Compos agreed to permanently table Senate Bill 355.  The measure was a back-door voucher bill that creates a new personal and corporate income tax credit for contributions to scholarship granting organizations called the “Equal Opportunity Scholarship Tax Credit.” In NEA-NM's opinion, credit against income tax is considered a tax expenditure in that, while it is not a direct payment from the state to the taxpayer, the taxpayer reduces the amount of tax paid to the state. Thus this measure violates the establishment clause of the US Constitution and several provisions of the New Mexico Constitution.  As an expenditure of tax dollars it is a violation of Article IV, Section 31 of the New Mexico Constitution, which prohibits a direct educational appropriation to any person, corporation, association, institution or community not under the direct control of the state.  Additionally, the measure also violates Article XII, Section 3 of the New Mexico Constitution because it prohibits the use of public money for the support "of any sectarian, denominational or private school…"

A compromise brokered by NEA-NM was voted on unanimously by the Senate Education Committee, Senate Bill 603, which does not violate our resolutions or the constitution!  It is a simple income deduction of up to $500 for tuition paid by a taxpayer for the taxpayer's dependent children to a 501 3(c) charity.  This deduction is, like any other tax deduction, deducted from the taxable income of the taxpayer.  It cost only about $200,000 annually (compared to $7,000,000 annually for Senate Bill 355).

 

Bills for Classified Salaries Move from House Education Committee to the House Appropriations and Finance Committee

 

House Bill 356, introduced by Representative Jack Thomas, appropriates $2,613,000 from the general fund to the Public School Fund for the purpose of paying the cost of implementing a $13,000 minimum salary for educational assistants holding a level one license. The bill also sets increasing minimum salaries for each of the four licensure levels described in the bill.  The bill also establishes a four-tier salary structure for Educational Assistants.  It sets a minimum salary of $13,000 annually for level one educational assistants in FY10, $15,000 annually for level two educational assistants in FY11, $20,000 annually for level three educational assistants in FY12, and $25,000 annually for level four educational assistants in FY13.

 

Charles Bowyer  of NEA-NM and Kathy Chavez of AFT NM jointly presented the measure to the House Education Committee, working together, as they have since the first minimum salary and licensure system was established for Educational Assistants in 2001.  Discussions with the House leadership have indicated that at the least, the minimum salary money for Educational Assistants will likely survive the budget cutting process! The bill itself probably will not because of its increased costs in subsequent years.

 

House Bill 18, also introduced by Representative Thomas, costs $4,000,000 and has also moved on the House Appropriations and Finance Committee from   the House Education Committee.  This legislation appropriates four million dollars ($4,000,000) from the general fund to the public education department for the purpose of providing a minimum salary for clerks, secretaries, secretary-bookkeepers and bookkeepers in school districts. The compensation increase is to be effective the first pay period after July 1, 2009.

 

While we support both these measures, this year’s sea of red ink makes it unlikely that that either will survive the Appropriations committee, other than money for the Educational Assistant minimum salary.  Since both measures are awaiting hearing in the House Appropriations and Finance Committee, now is the time to let committee members know that we should recognize the contributions of these vital members of the education family.

 

One Very Bad Bill Needs to Die in Committee on Thursday

 

Representative Keith Gardner was introduced House Bill 884.  This measure world change how the New Mexico Public Employee Labor Relations Board and Local Labor Relations Boards conduct elections. First, the employer could not, even by the employer’s choice, agree to recognize an exclusive bargaining agent based on a showing of interest, but would have to have a secret ballot election. Secondly, it could disallow the current practice of establishing a majority showing for incumbent bargaining units (what we call presumptive units) by use of cards rather than an election. 

 

It will be heard in the House Labor and Human Resources Committee on Thursday Afternoon (Feb. 25).  Let committee members know that we think this is a very bad measure that limits the rights of public employees.  The House Labor and Human Resources Committee is a very pro-labor and public employee committee, so assuming all members are present, the measure should be easily defeated.

Fight to Minimize School Cuts as Red Ink Flows

Red ink continues to flow in Santa Fe, as new revenue estimates indicate a $600,000,000 revenue shortfall for next year.  Even with stimulus funds taken into account, the word out of the  House Appropriations and Finance Committee is not good. 

 

It appears the committee is trying to make up most of the shortfall with federal stimulus funds and by cutting the half of the budget that is not public education.  However, with a shortfall exceeding 10% of the total budget that has become exceedingly difficult.  It looks like the budget emerging from the  House Appropriations and Finance Committee will cut an additional $40,000,000 from public school support!

 

We have been working with legislative leaders to make those cuts as painless as possible.  We still have disagreement on just how deep they need to be, on how to make the best use of federal stimulus funds, and on exactly how the cuts should be made. The legislature's first attempt to answer these questions will be in the budget bill likely to move to the House floor this weekend.

 

However, any cuts will be painful as the legislature seeks to avoid increases in class  size, layoffs of school employees, or reduction in work days for school employees.  Everyone knows that we live in serious economic times and that mitigating rather than preventing pain has become the name of the game!  As the budget begins to move to the House Floor and the Senate, we will keep working with legislative leaders to "mitigate pain." and keep you informed.  For now, just keep urging legislators to protect public school funds and school employee benefits.

Follow this link to send an email on school employee health benefits

Follow this link to ask the legislature for adequate funding next year.

Some Good News

Senator Pete Compos agreed to permanently table  Senate Bill 355.  The measure was a back-door voucher bill that creates a new personal and corporate income tax credit for contributions to scholarship granting organizations called the “Equal Opportunity Scholarship Tax Credit.” In NEA-NM's opinion, credit against income tax is considered a tax expenditure in that, while it is not a direct payment from the state to the taxpayer, the taxpayer reduces the amount of tax paid to the state. Thus this measure violates the establishment clause of the US Constitution and several provisions of the New Mexico Constitution.  As an expenditure of tax dollars it is a violation of Article IV, Section 31 of the New Mexico Constitution, which prohibits a direct educational appropriation to any person, corporation, association, institution or community not under the direct control of the state.  Additionally, the measure also violates Article XII, Section 3 of the New Mexico Constitution because it prohibits the use of public money for the support "of any sectarian, denominational or private school…"

Acompromise brokered by NEA-NM was voted on unanimously by the Senate Education Committee, Senate Bill 603,  which does not violate our resolutions or the constitution!  It is a simple income deduction of up to $500 for tuition paid by a taxpayer for the taxpayer's dependent children to a 501 3(c) chairty.  This deduction is, like any other tax deduction, deducted from the taxable income of the taxpayer.  It cost only about $200,000 annually (compared to $7,000,000 annually for Senate Bill 355.

New Tax Revenues Will Be Required to Fund Schools

House Bill 346, has also been introduced by Representative Stewart in the House.  This bill provides the new funding needed through a combination of repeal or recent high earners tax cuts and a half percent increase in Gross Receipts Tax. Together the two methods will raise some $350 million for the school year beginning in 2010.  Using the revenues form House Bill 346 and the new funding formula laid out in House Bill 331, there is sufficient revenue to meet the constitutional requirement to fund schools sufficiently.

House Bill 346 received its first public hearing last week in the House Taxation and Revenue Committee.  This measure received a do-pass recommendation from the committee late Wednesday on a near-party-line vote.  The measure now moves to the House Appropriations and Finance Committee.  Let members of this  Committee know that you support raising revenues to sufficiently fund public schools.

 

The vote in the House Taxation and Revenue Committee is presented below.  Please let the members who voted yes know that you appreciate their support for raising revenues for sufficient funding for public schools.

Name	Vote
Edward C. Sandoval - (D)  Chair	Yes
Jim R. Trujillo - (D)	No
Janice E. Arnold-Jones - (R)	Yes
Andrew J. Barreras - (D)	Yes
Ernest H. Chavez - (D)	Yes
Nathan P. Cote - (D)	No
Anna M. Crook - (R)	No
Keith J. Gardner - (R)	No
Roberto "Bobby" J. Gonzales - (D)	Yes
William J. Gray - (R)	No
Sandra D. Jeff - (D)	Yes
Ben Lujan - (D)	Yes
Rodolpho "Rudy" S. Martinez - (D)	Yes
Benjamin H. Rodefer - (D)	Yes
James R.J. Strickler - (R)	No
Thomas C. Taylor - (R)	No

 

Senator Cynthia Nava has also introduced a tax bill to provide sufficient funding for public schools.  It is Senate Bill 412.  This measure increases Gross Receipts Tax by .75% and will be heard first in the Senate Education Committee.  Let members of this committee know that you support Senate Bill 412 and sufficient funding for public schools.

 

The Senate Finance Committee turned its Tuesday meeting into a seminar on tax policy in New MExico.  This Committee seems to be inching toward the fact that our state budget cannot be balanced with cuts alone.  We need to continue our message that new revenues must be found to sufficiently fund public schools.

Budget Process in House Aims at Friday Completion

House Appropriations and Finance Committee Slated to Complete Work on Next Year’ Budget this Week

 

House Education Committee reported its budget recommendations in House Bill 3, the Education Appropriation Act  to the House Appropriations and Finance Committee earlier this week.  The budget submitted by the Education Committee is essentially a flat budget based on this year’s budget after the cuts contained in the solvency package already approved by the legislature.  One important item missing from the budget is any compensation increase, except for new minimum salary for educational assistants of $13,000, adding some 2.6 million new dollars.  The House Appropriations and Finance Committeewill work behind closed doors today and likely bring House Bill 2, the General Appropriations Act to the floor as early as Friday, February 20.  Our opportunity to affect this first step in the budget process is now.

Follow this link to send an email on school employee health benefits

Also missing is any new funding for increased insurance costs.  Most NEA-NM members get their health insurance benefits through the programs of the New Mexico Public School Insurance Authority (NMSPIA).  As a part of its budget cutting plan the Legislative Finance Committee pressured the NMSPIA Board to draft a benefits plan that contained no premium increase for next year.  This is the funding level currently in House Bill 3, the Education Appropriation Act.  While no premium increase might seem like a good idea at first glance, it requires deep cuts in employee health benefits to achieve.  Some of the cuts include adding a deductible of $300 per person. Office call co-pays will go up $5 or $10.  There will be a $300 deductible or $900 per family plus an additional 20% coinsurance payment, up to a $2800 out of pocket maximum.  Tier 3 drugs will go to a charge of 50% of the discount price; a minimum price will be established. While the NMSPIA board did not officially accept these changes, they will be on the agenda for the group's March 4 and 5 board meeting in Santa Fe.

 

If the legislature refuses to fund the employer share of premium increases through the school funding formula, they have little choice but to instigate the changes. Even thought it means a premium increase, we need to ask the legislature to fund the employer insurance share to avoid these benefit cuts.  As the final budget takes shape, call legislators and the Governor and tell them you do not support this drastic cut of employee health benefits.  

Follow this link to send an email on school employee health benefits.

One increase included is the next installment of the employer’s increased share of retirement, amounting to .75% of salaries.  This was part of the solvency plan for education retirement reached several years ago.  Employees’ contribution increases included as a part of the plan concluded last year.  Employers’ contribution rates are slated to increase by .75% per year until 2012.

 

While the ideas of increased class size and reducing the instructional year by one day are not in the House Education Committee recommendation, that doesn’t mean that these or other cuts might not show up in the final version of school funding produced by the House Appropriations and Finance Committee. The measure cuts categorical spending for public education by some 1.4%, including a $23,000,000 cut in instructional materials, a $2,000,000 cut in professional development funds, a $500,000 cut in support for mentoring, and a $770,000 cut in truancy prevention.  

 

Follow this link to ask the legislature for adequate funding next year.

 

 

Sufficient Funding for Public Schools

 

The Senate Finance Committee turned its Tuesday meeting into a seminar on tax policy in New Mexico.

  This Comm

ittee seems to be inching toward the fact that our state budget cannot be balanced with cuts alone.  We need to continue our message that new revenues must be found to sufficiently fund public schools.  Two bills, one in each legislative body do just that.   House Bill 346, has also been introduced by Representative Stewart in the House.  This bill provides the new funding needed through a combination of repeal or recent high earners tax cuts and a half percent increase in Gross Receipts Tax. Together the two methods will raise some $350 million for the school year beginning in 2010.  Using the revenues form House Bill 346 and the new funding formula laid out in House Bill 331, there is sufficient revenue to meet the constitutional requirement to fund schools sufficiently.

 

House Bill 346 received its first public hearing last week in the House Taxation and Revenue Committee.  Let the entire House Taxation and Revenue Committeeknow that you support raising revenues to sufficiently fund public schools.

 

Senator Cynthia Navahas also introduced a tax bill to provide sufficient funding for public schools.  It is Senate Bill 412.  This measure increases Gross Receipts Tax by .75% and will be heard first in the Senate Education Committee.  Let members of this committee know that you support Senate Bill 412 and sufficient funding for public schools.

 

Bad Idea May be Back on Senate Education Committee Agenda Friday

Senate Bill 355, sponsored by Senator Pete Compos, is a back-door voucher bill that creates a new personal and corporate income tax credit for contributions to scholarship granting organizations called the “Equal Opportunity Scholarship Tax Credit.” This measure may be back on the Senate Education Committee Friday. In NEA-NM's opinion, credit against income tax is considered a tax expenditure in that, while it is not a direct payment from the state to the taxpayer, the taxpayer reduces the amount of tax paid to the state. Thus this measure violates the establishment clause of the US Constitution and several provisions of the New Mexico Constitution.  As an expenditure of tax dollars it is a violation of Article IV, Section 31 of the New Mexico Constitution, which prohibits a direct educational appropriation to any person, corporation, association, institution or community not under the direct control of the state.  Additionally, the measure also violates Article XII, Section 3 of the New Mexico Constitution because it prohibits the use of public money for the support "of any sectarian, denominational or private school…"

 It is always difficult when a negative piece of legislation is introduced by a well-meaning usually pro-education legislator. Senator Composcertainly fits this category. He has a sincere desire to help church-related schools.  In that vein, NEA-New Mexico leaders continue to work with Senator Compos and members Senate Education Committee to find an acceptable compromise that does not violate the constitution.   Senate Bill 355 remains in the Senate Education Committee  awaiting its first hearing.  We continue to advocate leaving the bill on the committee table and replacing it with an acceptable compromise, such as simple tax deductions for a charitable donation.  Until that happens we continue to oppose Senate Bill 355.  Let Senate Education Committee Members  know that you are against this attempt to move public tax dollars to support private religious schools.

 

Flat Education Budget in Appropriations Committee

Education Budget Goes to House Appropriations and Finance Committee

Next year's budget took its first step as the House Education Committee reported its budget recommendations in House Bill 3, the Education Appropriation Act  to the House Appropriations and Finance Committee.  The budget submitted by the Education Committee is essentially a flat budget based on this year’s budget after the cuts contained in the solvency package already approved by the legislature.  One important item missing from the budget is any compensation increase, except for new minimum salary for educational assistants of $13,000, adding some 2.6 million new dollars. 

Also missing is any new funding for increased insurance costs.  Most NEA-New Mexico members get their health insurance benefits through the programs of the New Mexico Public School Insurance Authority (NMSPIA).  As a part of its budget cutting plan the Legislative Finance Committeepressured the NMSPIA Board to draft a benefits plan that contained no premium increase for next year.  This is the funding level currently in House Bill 3, the Education Appropriation Act.  While no premium increase might seem like a good idea at first glance, it requires deep cuts in employee health benefits to achieve.  Some of the cuts include adding a deductible of $300 per person. Office call co-pays will go up $5 or $10.  There will be a $300 deductible or $900 per family plus an additional 20% coinsurance payment, up to a $2800 out of pocket maximum.  Tier 3 drugs will go to a charge of 50% of the discount price; a minimum price will be established. While the NMSPIA board did not officially accept these changes, they will be on the agenda for the group's March 3 and 4 board meeting in Santa Fe.

If the legislature refuses to fund the employer share of premium increases through the school funding formula, they have little choice but to instigate the changes. Even thought it means a premium increase, we need to ask the legislature to fund the employer insurance share to avoid these benefit cuts.  As the final budget takes shape, call legislators and the Governor and tell them you do not support this drastic cut of employee health benefits. 

Follow this link to send an email on school employee health benefits.

One increase included is the next installment of the employer’s increased share of retirement, amounting to .75% of salaries.  This was part of the solvency plan for education retirement reached several years ago.  Employees’ contribution increases included as a part of the plan concluded last year.  Employers’ contribution rates are slated to increase by .75% per year until 2012.

 

While the ideas of increased class size and reducing the instructional year by one day are not in the House Education Committeerecommendation, that doesn’t mean that these or other cuts might not show up in the final version of school funding produced by the House Appropriations and Finance Committee. The measure cuts categorical spending for public education by some 1.4%, including a $23,000,000 cut in instructional materials, a $2,000,000 cut in professional development funds, a $500,000 cut in support for mentoring, and a $770,000 cut in truancy prevention.   The Appropriations Committee  has a goal of completion of the entire budget bill House Bill 2, the General Appropriations Act, by Friday, February 20.

Follow this link to ask the legislature for adequate funding next year.

 

A New Funding Formula

 

House Bill 331, sponsored by Representative Mimi Stewart is the legislation that creates a new more efficient funding mechanism for New Mexico Public Schools.  This legislation received a unanimous do-pass recommendation from the House Education Committee yesterday morning.  The measure moves to the House Appropriations and Finance Committeefor its next hearing.

The formula laid out in House Bill 331  provides for a new public school funding formula and the maintenance and periodic recalibration of the formula. Since the new formula radically changes the distribution of public school funding, it is important that the new money be place before the redistribution takes place.

House Bill 331, if funded, provides for a new public school funding formula and the maintenance and periodic recalibration of the formula. The bill provides for a longer school year for students, a longer work year for teachers and other instruction staff (one additional day in 2010-2011 and four days when fully implemented--the bill requires that the days be paid for with additional compensation), and codifies the Educational Plan for Student Success (EPSS) as the accountability instrument to be used to verify appropriate programs of instruction are provided.

For the first time in New Mexico's recent history an empirical study determined the costs of ensuring that all students in the state of New Mexico have access to the programs  and resources necessary to have sufficient education as required by the State Constitution.  The bill lays out the foundation for a new formula projecting the sufficient per-student cost calculation for school districts and charters schools. It contains definitions and cost factors consisting of: poverty, English language learners, special education, mobility, percent of district enrollment by set grades, and the weighted index of staff qualifications. It identifies the sufficient per-student cost multiplier and guidance about how to complete the sufficient per-student cost calculation. Methodologies are identified for factoring in growth; new school demographics; special education; implementation of intervention strategies related to lowering special education identification rates; annual updates of cost factors; and annual adjustment of the base per-student cost based on appropriations.

Follow this link to send an email to House Members asking them to pass the new funding formula

 

Sufficient Funding for Public Schools

 

Without a new source of revenue, the funding formula proposed in House Bill 331cannot be funded.   A tax bill, House Bill 346, has also been introduced by Representative Stewart.  This bill provides the new funding needed through a combination of repeal or recent high earners tax cuts and a half percent increase in Gross Receipts Tax. Together the two methods will raise some $350 million for the school year beginning in 2010.

Using the revenues form House Bill 346 and the new funding formula laid out in House Bill 331, there is sufficient revenue to meet the constitutional requirement to fund schools sufficiently.

 

House Bill 346 received its first public hearing last week in the House Taxation and Revenue Committee. Lobbyists for every major business group in the state were at the hearing in force, expecting to kill the legislation after a short hearing. Two extraordinary things happened.  The hearing wasn't short, it lasted for hours and members of the committee thoroughly debated the bill. And then, much to the chagrin of the titans of industry present, Speaker Ben Lujan led a charge that chastised the anti-school funding lobbyists for offering only criticism and no constructive alternatives to the funding mechanism offered in House Bill 346.  Other members of the committee were especially forceful and effective in their defense of public education and support for sufficient funding.  These included Committee Chair Edward C. Sandoval; Representative Jim Trujillo; Representative Roberto Gonzales; and Rep Representative Benjamin Rodefer. Follow the links indicated above to these Representatives to thank them for their support, especially if any of them represent you.  At the conclusion of the hearing, the measure was temporarily tabled, with instructions from Chairman Sandoval to the assembled business leaders to work with the sponsors to attempt to put together a funding mechanism that they could support.  

 

Let the entire House Taxation and Revenue Committeeknow that you support raising revenues to sufficiently fund public schools.

 

Senator Cynthia Navahas also introduced a tax bill to provide sufficient funding for public schools.  It is Senate Bill 412.  This measure increases Gross Receipts Tax by 1% and will be heard first in the Senate Education Committee.  Let members of this committee know that you support Senate Bill 412 and sufficient funding for public schools.

Funding Formula Bill in Education Committees this Morning, Monday, February 16!

A New Funding Formula

 

House Bill 331, sponsored by Representative Mimi Stewart is the legislation that creates a new more efficient funding mechanism for New Mexico Public Schools.  This legislation will be heard in a joint meeting of the House Education Committee and the Senate Education Committee this morning (February 16) at 8:00 AM.

 

The formula laid out in House Bill 331  provides for a new public school funding formula and the maintenance and periodic recalibration of the formula. Since the new formula radically changes the distribution of public school funding, it is important that the new money be place before the redistribution takes place.

 

House Bill 331, if funded, provides for a new public school funding formula and the maintenance and periodic recalibration of the formula. The bill provides for a longer school year for students, a longer work year for teachers and other instruction staff (one additional day in 2010-2011 and four days when fully implemented--the bill requires that the days be paid for with additional compensation), and codifies the Educational Plan for Student Success (EPSS) as the accountability instrument to be used to verify appropriate programs of instruction are provided.

 

For the first time in New Mexico's recent history an empirical study determined the costs of ensuring that all students in the state of New Mexico have access to the programs and resources necessary to have sufficient education as required by the State Constitution.

 

The bill lays out the foundation for a new formula projecting the sufficient per-student cost calculation for school districts and charters schools. It contains definitions and cost factors consisting of: poverty, English language learners, special education, mobility, percent of district enrollment by set grades, and the weighted index of staff qualifications. It identifies the sufficient per-student cost multiplier and guidance about how to complete the sufficient per-student cost calculation. Methodologies are identified for factoring in growth; new school demographics; special education; implementation of intervention strategies related to lowering special education identification rates; annual updates of cost factors; and annual adjustment of the base per-student cost based on appropriations.

 

Call or email House Education Committee and the Senate Education Committee members to ask them to support House Bill 331.

 

Follow this link to send an email to House Members asking them to pass the new funding formula and to sufficiently fund our schools.

 

Sufficient Funding for Public Schools

 

A tax bill, House Bill 346, has also been introduced by Representative Stewart.  This bill provides the new funding needed through a combination of repeal or recent high earners tax cuts and a half percent increase in Gross Receipts Tax. Together the two methods will raise some $350 million for the school year beginning in 2010.

Using the revenues form House Bill 346 and the new funding formula laid out in House Bill 331, there is sufficient revenue to meet the constitutional requirement to fund schools sufficiently.

 

House Bill 346received its first public hearing last week in the House Taxation and Revenue Committee. Lobbyists for every major business group in the state were at the hearing in force, expecting to kill the legislation after a short hearing. Two extraordinary things happened.  The hearing wasn't short, it lasted for hours and members of the committee thoroughly debated the bill. And then, much to the chagrin of the titans of industry present, Speaker Ben Lujan led a charge that chastised the anti-school funding lobbyists for offering only criticism and no constructive alternatives to the funding mechanism offered in House Bill 346.  Other members of the committee were especially forceful and effective in their defense of public education and support for sufficient funding.  These included Committee Chair Edward C. Sandoval; Representative Jim Trujillo; Representative Roberto Gonzales; and Rep Representative Benjamin Rodefer. Follow the links indicated above to these Representatives to thank them for their support, especially if any of them represent you.  At the conclusion of the hearing, the measure was temporarily tabled, with instructions from Chairman Sandoval to the assembled business leaders to work with the sponsors to attempt to put together a funding mechanism that they could support.

 

Let the entire House Taxation and Revenue Committeeknow that you support raising revenues to sufficiently fund public schools.

 

Senator Cynthia Navahas also introduced a tax bill to provide sufficient funding for public schools.  It is Senate Bill 412.  This measure increases Gross Receipts Tax by 1% and will be heard first in the Senate Education Committee.  Let members of this committee know that you support Senate Bill 412 and sufficient funding for public schools.

We Need to Send a Message that NCLB is Not the Only Way to Hold Schools Accountable

Senate Bill 156, Alternative School Accountability Pilot, introduced by Senator Cynthia Navacreates a six-year voluntary school accountability pilot project based on a student growth model for grades 4 through 8 that is separate from but complementary to the existing school accountability system; and phases in the project over two years.  Passage of this measure will give schools the chance to practice an accountability that has meaning beyond standardized test scores.  This bill received a unanimous do pass recommendation from Senate Education Committee on February 13 and next goes to the Senate Finance Committee for a hearing.  Let members of the Senate Finance Committee know that this is an important alternative to the way the federal government looks at school success and should be passed.

Tuition Tax Credit Bill (Vouchers) Still on Hold in Senate Education Committee

Senate Bill 355, sponsored by Senator Pete Compos, is a back-door voucher bill that creates a new personal and corporate income tax credit for contributions to scholarship granting organizations called the “Equal Opportunity Scholarship Tax Credit.” In NEA-NM's opinion, credit against income tax is considered a tax expenditure in that, while it is not a direct payment from the state to the taxpayer, the taxpayer reduces the amount of tax paid to the state. Thus this measure violates the establishment clause of the US Constitution and several provisions of the New Mexico Constitution.  As an expenditure of tax dollars it is a violation of Article IV, Section 31 of the New Mexico Constitution, which prohibits a direct educational appropriation to any person, corporation, association, institution or community not under the direct control of the state.  Additionally, the measure also violates Article XII, Section 3 of the New Mexico Constitution because it prohibits the use of public money for the support "of any sectarian, denominational or private school…"

 It is always difficult when a negative piece of legislation is introduced by a well-meaning usually pro-education legislator. Senator Composcertainly fits this category. He has a sincere desire to help church-related schools.  In that vein, NEA-New Mexico leaders continue to work with Senator Compos and members Senate Education Committee to find an acceptable compromise that does not violate the constitution.   Senate Bill 355 remains in the Senate Education Committee  awaiting its first hearing.  We continue to advocate leaving the bill on the committee table and replacing it with an acceptable compromise, such as simple tax deductions for a charitable donation.  Until that happens we continue to oppose Senate Bill 355.  Let Senate Education Committee Members  know that you are against this attempt to move public tax dollars to support private religious schools.

Retirement Changes Should be Studied Over the Next Year, Not Rushed Into During a Financial Downturn

Two bills before the legislature would change retirement benefits for new employees offered under the Educational Retirement Board.  House Bill 573and House Bill 631would both require new employees to work 30 years before full retirement or have age and service equal 80.  The current rule is 25 years or age and service equaling 75.  We don't think these changes should be considered this year. We believe that all retirement plans should be studied over the next legislative interim and moved toward financial stability with needed changes applied to both the public employment retirement (PERA) system and educational retirement in a fair and equitable manner.  Ask legislators to leave educational employee benefits in place with no drastic reductions for next year.