The LFC took up the issue of lottery scholarship solvency Tuesday afternoon.  HED Secretary Jose Garcia told the committee there were two separate issues to be considered:  covering the scholarship shortfall for the 2014 spring semester and then coming up with options for long-term solvency.

So that students are not hurt by the shortfall in the short-term, the plan for the spring is to cover 100 percent of the scholarship need with supplements from the general fund.  This seems to have broad legislative and executive support.
As for long-term solvency, the HED proposes to present options with dollar amounts attached so that the Legislature can pick and choose solutions the members can agree upon, which will be easier said than done since the Lottery Work Group could not reach consensus over the summer and they were far fewer in number.  Secretary Garcia did say the Administration did not want to change the nature of the scholarship, so it wants to rely solely on lottery revenues and not on any other revenue sources.  He also said no solvency fix can occur until the scholarship is decoupled from tuition increases.  He also favors flat rate reductions.
Sen. Michael Padilla (D-Albuquerque) reminded the HED that student leaders have been considering the issue and favor equitable reductions.  He also wants to know from HED who will be the winners and losers under the various scenarios.
LFC chairman Rep. Lucky Varela (D-Santa Fe) said the LFC is looking at a solvency fix that includes raising grade point averages from 2.50 to 2.75 and raising credit hours from 12 to 15, in addition to a mandate that the fund lives within its means and spend only the money available each year.  Even those suggestions met opposition from legislators who said fixes like raising GPA would adversely impact Native American and Hispanic students.   Chairman Varela meanwhile questioned “mixed messages” from HED and Public Education (PED) when it comes to raising the academic bar.
UNM Health Sciences Center
HSC Chancellor Paul Roth briefed the LFC on Tuesday afternoon on the particular needs of the Health Sciences Center, most revolving around workforce needs.  Among those needs are compensation increases for School of Medicine faculty who haven’t seen one in five years and whose turnover is now approaching 13 percent.   Among others, there are also requests for nurse practitioner program expansion, bringing Project ECHO’s stable state funding back to levels of years past, paying for increased utility costs at the Office of the Medical Investigator, expanding the Pain Center and establishing a center for the care of abused and maltreated children.
Committee members had many workforce questions as they wrestle with how the state will be handle the anticipated explosion of patient needs brought about by the Affordable Care Act.
The LFC will be reviewing agency budget requests for the rest of the week. Higher education took center stage at this morning’s session of the Legislative Finance Committee (LFC) in Santa Fe.  Though the institutions and the Higher Education Dept. (HED) all spoke of collaboration, it is evident there is still work to be done.
HED Secretary Jose Garcia told the committee he will be seeking a total appropriation of $591.3 million in Instruction and General (I&G) funding for higher ed institutions, which includes $8.2 million in new money.  He spoke of working with institutions and adopting their recommendations for rolling three-year averages and greater weight being given science, tech, engineering and math (STEM) degree production in the outcomes-based formula.
Secretary Garcia also proposes putting 10 percent of last year’s I&G distribution “at risk,” which means institutions could recapture that money based on how well they performed in meeting outcomes based criteria like course completion, degree production, STEM degrees, etc.   His plan was endorsed by UNM Regent Brad Hosmer who asked legislators to support the formula and consider increasing its funding so that positive change could occur more quickly and be more effective.
However, many higher ed institutions are not quite as receptive of the HED proposal.  New Mexico Tech President Dan Lopez said institutions support performance-based, mission-specific funding and would even support some “at risk” factor, but not if it compromises the institution’s ability to operate in the face of enrollment increases and inflation.  For instance, under current calculations, Tech would only get $114,000 in new money, which Lopez said is hardly enough to hire the five new faculty needed to meet accreditation requirements.  Most institutions, he said, are still recovering from the cuts sustained during the recession.
CNM President Kathie Winograd suggested to the committee that the question should “not be how we compete with each other but how we serve our students and compete with other states” in the region and nation.  She pointed out that some institutions could see reductions even though they are showing improvements.
Committee members also had a number of concerns, among them questioning if the formula adversely impacts smaller institutions. They urged the HED and the institutions to continue working out their differences and come to terms before the session. No one, they suggested, wants to see the Legislature come up with a funding formula fix.
Kudos to Curt Porter
The LFC took time to commend Curt Porter, most recently UNM’s associate vice president for budget and planning in Academic Affairs, who is retiring this month.  Porter has had a long career in state government and education that included a stint with the LFC.  Both the House and the Senate joined in his commendation.