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New Mexico
Useful Resources
Historical Background
In the early 1970s, plaintiffs filed an "equity"
lawsuit challenging the constitutionality of New Mexico's
education finance system because expenditures varied
markedly depending on local school district wealth.
The case was settled before trial when New Mexico leaders
decided to fund the operations portion of education
costs at the state level and provide essentially equal
resources to each district. The 1974 Public School Finance
Act resulted in the state funding over 80% of education
costs, second only to Hawai'i
in this regard, and the system has continued to produce
more equitable funding than systems in most states.
However, for capital funding, local districts have borne
primary responsibility.
Over the years, facilities in many low-property-wealth
school districts deteriorated. In 1998, a number of
these districts brought a capital funding/facilities
suit, Zuni School District v. State, CV-98-14-II
(Dist. Ct., McKinley County Oct. 14, 1999), claiming
that the funding system for capital items was unconstitutional.
The trial court granted partial summary judgment in
favor of plaintiffs and ordered the state to "establish
and implement a uniform funding system for capital improvements
. . . and for correcting existing past inequities"
and set a deadline at the end of the 2001 legislative
session.
At the end of 2001, a proposal to fund
a $1.2 billion capital program was defeated by a filibuster,
and the state settled on nearly $400 million and a new
capital funding system intended to establish a standards-based,
adequacy level for facilities in all districts.
On January 14, 2002, the special master reported to
the court that the state was making a good faith effort
to comply with the court's order and "has made
great strides." Nonetheless, lower wealth districts
are concerned that the new system will actually exacerbate
facilities disparities among districts. The additional
state funding will not change the low-wealth districts'
scant bonding capacity, but may enable higher wealth
districts to use their strong bonding capacity for superior
facilities. The school district plaintiffs and the state
had 10 days to file any objections they had to the special
master's report. The plaintiffs did file objections,
arguing primarily that the failure to resolve the disparity
in bonding capacity between districts would ultimately
perpetuate inadequacy again, rather than creating an
agreed-upon adequacy level, as might have happened if
all districts had been barred from tapping into outside
sources of funding. Despite the objections, the court
approved the special master's report in the summer of
2002.
In 2006, $90 million of extra funding was directed
to capital projects in high-growth areas, mainly Albuquerque’s
West Side. The $90 million was funded largely at the
behest of Governor Bill Richardson, and was completely
outside of the facilities funding stream that the legislature
had established since 1999. Plaintiffs’ attorneys
went to court in March 2006 to argue that the added
funding was unfair to smaller districts. Fast-growing
districts such as Albuquerque, which plaintiffs’
attorneys noted was not taxing at the maximum level
locally, were able to use their political clout to receive
extra funding, violating the principle of uniformity
that had been carefully embedded in the current system.
The hearing in March convinced the judge to call a “review”
for the fall of 2006, which would debate the constitutionality
of the way the state is currently funding facilities
needs. Subsequently, the case was vacated. In the spring
of 2008, Plaintiffs attorneys are considering returning
to court.
Other Litigation
On April 27, 2007, the United States Supreme Court
ruled that New Mexico was allowed to deduct federal
impact aid to New Mexico school districts when allocating
state aid. In Zuni Public School District v. Department
of Education, plaintiff school districts had argued
that the state was prohibited from reducing school funding
by the amount provided in the form of federal impact
aid. The districts are located on federal and tribal
lands in predominantly Native American areas with meager
property tax bases, qualifying them for federal impact
aid. The state deducted $35.8 million from its aid to
the plaintiff districts in 2005-06.
Useful Resources
For information regarding
other states with facilities/capital funding cases, see Alaska,
Arizona, Colorado
and Idaho.
Last updated, March 2008 |
