Report: NM's higher education endowment push has delivered limited results

SANTA FE — In an attempt to fortify New Mexico’s pipeline for nurses, teachers and social workers, state lawmakers appropriated $170 million over a recent three-year period to expand higher education faculty endowments.

But some of that money has not been used as intended and delays in implementation have blunted its intended impact, according to a new legislative report released Thursday.

Specifically, the $170 million was intended to support the salaries of 87 new faculty members at 15 colleges and universities around the state, but the funding has only been used to hire about 52 faculty members to date, the Legislative Finance Committee report found.

Among other examples, the LFC report found Western New Mexico University in Silver City received more than $22 million in endowment appropriations since the 2023 budget year but has made no distributions from the endowments to pay faculty salaries.

In addition, New Mexico State University has spent more of its endowment earnings on foundation operations than on faculty salaries or financial aid, according to the report.

Sen. George Muñoz, D-Gallup, described those uses of the endowment funding as a “black eye” for the state’s higher education system.

“If you’re not going to use the money correctly, don’t ask for it,” Muñoz said during Thursday’s meeting of the LFC in Albuquerque.

He also suggested future state spending on higher education programs will be accompanied by tighter budget language to ensure funds are used as intended.

“They put the target on their own backs,” Muñoz said of higher education institutions, while adding, “We determined we have this workforce shortage in New Mexico and then our money just seems to disappear.”

The spending of $170 million on higher education endowments came as New Mexico was awash in state revenue, due primarily to an ongoing oil production boom in southeast New Mexico.

The money was intended to be invested, with interest being used to hire new faculty members so that additional student slots could be created in nursing, teaching and social work programs.

At its current pace, the number of graduates from state institutions for such professions is expected to fall short of projected job openings. The shortfall is projected to be at least 3,700 teachers, 4,300 nurses and 580 social workers from this year through 2032, based on U.S. Bureau of Labor Statistics projections.

State Higher Education Secretary Stephanie Rodriguez said in response to the LFC report that its tone was overly negative, citing the “complex realities” of higher education funding and the need to develop new internal structures to handle the money.

But Rodriguez acknowledged the Higher Education Department faced challenges in distributing some of the funding in a timely manner, and said the agency is reviewing whether some endowment spending complies with legislative intent.

She also said hiring new professors to teach at some New Mexico institutions can be challenging, saying, “it’s really hard to recruit a nursing professor in Carlsbad.”

Marc Saavedra, the director of the New Mexico Council of University Presidents, said the endowment funding initiative shows the need for advanced planning between legislators and higher education officials.

Meanwhile, several legislators questioned Thursday whether the state’s focus on funding new salary positions would necessarily translate to more graduates with degrees in priority fields.

“Do we have too much faculty and not enough enrollment?” asked Rep. Harlan Vincent, R-Glencoe, during the LFC meeting.

In all, 28 programs at 15 institutions around New Mexico got funding under the legislative plan through a mix of applications and enrollment-based distributions. But about 80% of the funding went to five universities — the University of New Mexico, New Mexico Highlands University, NMSU, WNMU, and Eastern New Mexico University.

UNM received about $36.5 million under the initiative, including $11.5 million in nursing endowment funds in the 2023 and 2024 budget years. Of that amount, $2.5 million was allocated to UNM’s branch campus in Gallup.

But more than $2 million in investment returns from that funding infusion remained unspent as of May due to “changes in college leadership and significant faculty turnover,” university officials said in a letter.

Despite the slow rollout, there have been some bright spots.

For instance, Eastern New Mexico University received approval in 2024 to launch a new social work program after receiving endowment funding, and the program is on track to have its first class of 15 graduates next spring, according to the LFC report.