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PED appeals federal Impact Aid decision

Copyright © 2020 Albuquerque Journal

The state Public Education Department is appealing a federal determination blocking New Mexico from lowering payments to school districts in fiscal year 2020 based on how much Impact Aid a district receives. The PED is disputing the U.S. Department of Education’s analysis on New Mexico’s school funding and called for a hearing, according to a letter dated June 13.

Impact Aid is a federal funding mechanism that aims to help districts make up for lost property tax revenue due to tax-exempt lands in their area, among other things.

New Mexico takes credit for some of this federal money in its school funding formula. A total program cost is calculated for a school district, then the state subtracts 75% of Impact Aid payments from that total and gives the district the difference.

In April, the U.S. Department of Education decided the state can’t do this for fiscal year 2020, saying the state didn’t pass a test that measures whether expenditures are equalized across districts.

In its letter to the U.S. Department of Education, PED lawyers argue that the fed’s analysis was flawed and assert that the department should have only looked at the school funding formula for this test and not other local funding streams.

“NMPED challenges the Department’s finding that the State must include revenues outside of the State Equalization Guarantee (“SEG”) in the disparity test … The SEG is New Mexico’s program of State aid for current expenditures and the only program that should be included in the disparity test,” the letter says.

“The Department’s interpretation is inconsistent with the law and intent of the disparity test,” the document goes on to say.

The letter on behalf of the PED also says there are multiple calculations allowed for the disparity test, and New Mexico is in the clear under alternative computations.

According to the PED’s letter, removing Impact Aid credits would result in a decrease of over $60 million in the school funding formula available for other districts.

But Gallup-McKinley County Schools Superintendent Mike Hyatt said the practice of taking credit for Impact Aid takes from some of the poorest areas of the state in the first place.

“We don’t expect things to change without a federal government ruling or a court order to fix the (deep-seated) bias,” Hyatt wrote in an email to the Journal.

“The state has significant, admitted problems with this Impact Aid issue so we will continue to expose the scheme that it is until all students are treated equitably across the state whether that is through action legislatively, federally and possibly legally,” he continued.

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