Earlier this week, the state's financial gurus told the Legislative Finance Committee that approximately $282 million in increased revenues could be available for the upcoming budget year of 2013-2014, barring issues created by external forces like the "fiscal cliff."  However, once previous spending commitments are taken care of (like the retirement swap), there will actually be about $210 million new dollars for legislators to allocate. 


Today, New Mexico's higher education leaders talked to the LFC about the needs of colleges and universities statewide.  These are highlights from this morning's nearly four hour hearing. Speaking for the four-year institutions, New Mexico Tech President Dan Lopez reminded legislators that higher education was still recovering from the series of budget cuts during which 17 percent of instruction and general (I&G) funding and workload funding was lost.  While all institutions support the outcomes-based performance measures featured in the year-old funding formula, Lopez listed the concerns that still needed to be addressed in the formula's evolution:

·       The formula is still unclear about attaining levels of stability and sustainability which makes planning difficult;

·       The formula does not yet incentivize quality so that graduates are indeed competitive;

·       There is a need for three separate formulas for the research, comprehensive and two-year sectors;

·       There is as yet not sufficient mission-differentiation that recognizes the different roles of institutions and their need for different levels of support.


In the discussion about recurring funding needs, UNM President Bob Frank made the case for at least a 2 percent compensation increase package for all state employees.  He also supported three distinctive formulas which recognize economic incentives, creation of new businesses and jobs and the role of universities as economic engines for their regions.


Making the case for higher ed getting as much workload funding as possible, given limited resources, Dr. David Lepre of the Council of University Presidents used UNM as an example of why institutions have had to reinvent themselves during the budget cuts in order to keep the doors open:  UNM (main and HSC) was cut $62 million and its workforce decreased by 1000 people.  At the same time, UNM enrollment grew by an additional 1500 students.


Note:  The Higher Education Department was originally directed to submit a flat budget. But given an overall increase in performance outcomes of 6.63 percent overall, a flat budget would mean that any institution that hadn't achieved the 6.63 increase in performance measures would actually lose money.  So HED Secretary Dr. Jose Garcia is asking for $4.7 million in new dollars.   The institutions, of course, hope that amount will be increased.

Rounding out the four-year wish list, NMSU interim President Manuel Pacheco talked about the needs for building renewal and replacement and the changing requirements of technology in a request for non-recurring funds. Leaders from two-year institutions also proposed their wish list, and it is clear there remains disagreement among the sectors about issues like separate formulas and the current formula multiplier.  Where there is agreement is the need for action to achieve solvency for education retirement and the lottery scholarship.

What Committee Members Were Asking:

Rep. Jim White (R-Albuquerque) wondered if nearly $27 million spent on remediation efforts was being spent appropriately, how quality can be measured, and how institutions can make it cheaper for students to attend, since he believes student debt is a major issue and cost will soon price students out of school.  Secretary Garcia says HED calculates lottery scholarship awards would have to be cut to 65 percent of what they are now unless something is done.  He also acknowledged the input of UNM students at last week's lottery summit on campus.

Sen. Sue Wilson Beffort (R-Sandia Park) asked about articulation agreements and the need to have a transfer pipeline between the two-year and four-year sectors, especially in critical areas like ursing.  

CNM President Katherine Winograd lauded the articulation agreements with UNM and spoke of the statewide effort to have more bachelor degree-prepared nurses.  UNM President Frank talked about the wisdom of having "stackable" degrees that build from one sector to the next.

Sen. Cisco McSorley (D-Albuquerque) questioned HED about the formula and the work that still needs to be done to reward New Mexico's research universities.

Rep. Larry Larranaga (R-Albuquerque) had questions about underprepared students coming into college and about the impact of having more foreign students.  He questioned why there was no formula for funding capital projects and noted specifically the needs of Farris Engineering.

Rep. Don Tripp (R-Socorro) asked about tuition, at which point NM Tech President Lopez reminded the committee that the Legislature was responsible for the great portion of tuition increases because of the tuition credit.  Committee chair Sen. John Arthur Smith (D-Deming) acknowledged that the Legislature has aggravated the tuition problem.

Rep. Lucky Varela (D-Santa Fe) and Sen. Mary Kay Papen (D-Las Cruces) both asked about the winners and losers in the funding formula process.  Secretary Garcia acknowledged that there was not enough to cover everybody.

Sen. John Arthur Smith reminded everyone that the formula remains a work in progress designed to give direction.  He called for cooperation from the institutions and from the fourth floor (Governor) in getting issues resolved.

HSC comes before the committee late this afternoon.


Until then,

Susan McKinsey

Office of Government and Community Relations