New Mexico Kids at the Crossroads

A Children’s Agenda for Making KIDS COUNT with Candidates

kids playing with bubbles Download this children’s agenda (March 2018; 4 pages; pdf)

There’s a reason we call it the Land of Enchantment—everything from our colorful traditions to our diverse cultures and breath-taking landscapes makes New Mexico so special.

But even the most spectacular traditions, cultures, and landscapes can’t make growing up in New Mexico enchanting for children who don’t have the opportunities they need to thrive. With the highest rate of child poverty in the nation, New Mexico is not providing the opportunities our children need to succeed. And if the future isn’t bright for our children, it’s not bright for our state.

But the good news is that we know what works. We have the power to improve opportunities for New Mexico’s kids in a very big way, and we can do it through public policy.

Elections put New Mexico at a crossroads. Will candidates adopt policies that keep us on the current course or will they opt for a path that will lead us to prosperity?

Prosperity is not possible without investments. The best investments we can make are those that build up our people. Investments in people lead to a skilled, educated, and productive workforce, which is essential to a stable business landscape and a strong New Mexico economy.

What follows are recommendations for investments that will put our people first. Fundamental to all of these recommendations is a fair, responsible, and transparent tax system that generates sufficient revenues to support programs and services that can ensure that all New Mexico kids have the opportunity to thrive and succeed.

Economic Well-Being

Children do best when their families have the economic security that comes from having good jobs that pay family-sustaining wages. When there are simply not enough of those jobs to go around or when families fall on hard times, policy-makers can enhance economic security for hard-working families with work supports that help provide the opportunities that children need to thrive. To best support economic well-being for New Mexico’s children, policy-makers can:

    • Increase the Working Families Tax Credit (WFTC) and the Low Income Comprehensive Tax Credit (LICTR).
    • Enact a new state-level Child Tax Credit (CTC) for families with children.
    • Immediately increase the minimum wage to at least $10 an hour, rising to $12 an hour by 2022.
    • Immediately restore child care assistance to the previous eligibility level so more low-wage working parents can afford safe care for their kids.[1] Within two years, increase eligibility even more to help working parents who still struggle with child care costs.[2]
    • Simplify enrollment and recertification processes for family supports including Medicaid, the supplemental nutrition assistance program (SNAP), and child care assistance, as well as enact express-lane eligibility to reduce duplication of paperwork.
    • Enroll all eligible families in Medicaid, SNAP, and child care assistance and increase participation in other work supports.
    • Reject cost-sharing measures and reductions in benefits or income eligibility for Medicaid.
    • Support a maximum APR of 36% on all small loans, and empower the Regulation and Licensing Department to end predatory lending practices in payday, car title, and tax refund loans, and pawn and rent-to-own schemes.
    • Support low-income housing and enact a comprehensive plan to reduce homelessness.
    • Support increased low-income home energy assistance (LIHEAP) funding.

Education

The most effective path out of poverty is education. But when children from low-resource families start school already behind, they are unlikely to catch up. High-quality early care and learning programs are proven to help prepare children for success in school and in life. Policy-makers should ensure equitable access to an affordable and high-quality cradle-to-career system of care and education for all of New Mexico’s kids. To best support education for New Mexico’s children, they can:

    • Significantly increase funding to achieve universal voluntary parent coaching, child care assistance, and pre-kindergarten as part of a comprehensive pre-school early care and learning continuum.
    • Support a constitutional amendment to use a fraction of the Land Grant Permanent Fund for early education.
    • Significantly increase K-12 per-pupil funding and compensation for teachers and support staff.
    • Ensure that schools whose students have the highest needs receive the most funding by increasing the at-risk factor in New Mexico’s education funding formula.
    • Support evidence-based methods for closing achievement gaps at all stages of education.
    • Increase funding for youth mentoring and after-school programs.
    • Expand community schools and other wrap-around strategies and programs that help families and kids.
    • Increase funding for bilingual education to assure that all children have access.
    • Restore the College Affordability Fund so it can support at least $2 million in distributions per year.
    • Make the lottery scholarship need-based.
    • Expand access to education for adults, including high school equivalency programs, service learning opportunities, career pathways for disconnected youth, adult basic education, and English-as-a-second-language (ESL) programs.

Health

A person’s health should not depend on their racial or ethnic heritage or what zip code they live in, but too often it does. Americans value the ideas of equality that are enshrined in our Constitution but, despite the gains made toward universal health coverage, we are still a long way from true health equity. Policy-makers should ensure that all New Mexico children and families have access to a comprehensive and high-quality system of health care coverage and wellness resources, and that all New Mexicans live and thrive in safe and supportive communities. To best support health for New Mexico’s children, they can:

    • Support full implementation of all provisions of the Affordable Care Act to improve access and achieve health equity.
    • Support full-funding of Medicaid for all eligible New Mexicans and oppose barriers to access such as cost-sharing premiums and co-pays for most Medicaid recipients.[3]
    • Re-open the school-based health care centers that were forced to close due to spending cuts and support the creation of more school-based health centers.
    • Support a rebuilding of New Mexico’s behavioral health system with a special emphasis on access to substance abuse treatment programs.
    • Support treatment instead of incarceration for non-violent drug offenders.
    • Develop and fund a plan to end the Medicaid waiting list for those with developmental disabilities.
    • Support common-sense gun safety legislation, including universal background checks and allowing a judge to prohibit those accused of domestic violence from possessing firearms.
    • Increase funding for child and teen suicide prevention, tobacco-use prevention, teen pregnancy prevention, and alcohol and drug prevention programs.
    • Support strategies to move rapidly toward more wind and solar energy, and strategies to reduce harmful emissions from other energy sources.

[1] Those earning up to 200 percent of the federal poverty level, or $41,560 for a family of three.
[2] Those earning up to 250 percent of the federal poverty level, or $51,950 for a family of three.
[3] Those earning less than 200 percent of the federal poverty level, or $41,560 for a family of three.

Download this children’s agenda (March 2018; 4 pages; pdf)

Sustaining Career Pathways Frameworks

by Armelle Casau
Sept. 22, 2017

Career pathways, programs that move non-traditional adult students along a continuum into post-secondary education, have shown real promise in other states. However, they require a systemic framework that aligns policies and funding for a comprehensive approach. This PowerPoint, presented to the SUN PATH Advisory Council, looks at funding sources, possible frameworks, and examples of effective career pathway programs in other states.

Download presentation (11 slides; pdf)

Made possibles by a grant from the Working Poor Families Project.

The Working Poor Families Project is funded by the Annie E. Casey Foundation, Ford Foundation, Joyce Foundation, and The Kresge Foundation.

New Mexico Public School Funding through the Great Recession and Beyond

Empty swings-cropped

Executive Summary

Download this executive summary (Aug. 2016; 4 pages; pdf)
Download the full report by Gerry Bradley, MA (Aug. 2016; 14 pages; pdf)

A lawsuit currently working its way thought the New Mexico court system asserts that the state has failed to provide a uniform system of school funding sufficient for the education of all school-age children in the state, as required by the New Mexico constitution. This failure is evident, the suit shows, in the poor academic performance across racial, ethnic, and socio-economic classifications. This report supports the arguments made by the lawsuit.1

The lawsuit demonstrates that the poor and disparate educational performance of New Mexico’s children is connected to a lack of resources provided to schools. Numerous educational experts and legislative task forces and committees, as well as studies, have drawn attention to the insufficiency of funding for public education in New Mexico. A 2008 report by the American Institutes of Research (AIR)2 found that operational expenditures were underfunded statewide by about $350 million, or nearly 15 percent, at that time.

Also, a recent report from the state Legislature found that New Mexico and Mississippi direct less funding to serving at-risk students than do all other states, despite the large numbers of at-risk students in these two states. Notably, both New Mexico and Mississippi consistently rank at the bottom in assessments of student outcomes.

Like school systems in almost all of the 50 states, New Mexico public school revenue fell sharply during the Great Recession (see Figure I). New Mexico policy-makers addressed the revenue crisis by slashing state spending on public schools and temporarily plugging the gap with federal revenues from the 2009 American Recovery and Reinvestment Act (ARRA). The availability of federal ARRA funds in the 2010 and 2011 school years helped mitigate the state cuts to the school system.

K-12-Figure-I

Public education appropriations were not restored to the 2009 level until fiscal year 2015 (FY15). However, funding still had not recovered to 2008 levels on a per-student, inflation-adjusted basis.

This is because in most years the number of students enrolled in public education grows and inflation chips away at the value of educational expenditures. Given the past eight years of experience, the number of students can be expected to grow by about 0.34 percent per year. A forecast of the Consumer Price Index by the state of New Mexico’s Consensus Revenue Estimating Group shows inflation hovering around 2.5 percent through FY20. However, appropriations grew by about $34 million in FY16 and about $9 million in FY17—or less than is needed to keep pace with inflation and population growth.

Given that the public school appropriation from the state general fund was $2.648 billion in FY17, general fund appropriations for the next three years would need to grow by $74 million (2.84 percent) in FY18, $72 million (2.64 percent) in FY19 and $76 million (2.74 percent) in FY20 merely to keep pace with inflation and growth in the number of students. In addition, the base budget would need to have been increased by $400 million in FY17 to reach the 15 percent increase recommended in the AIR report.

The State Equalization Guarantee

Public school finance in New Mexico is quite centralized: most funding comes from state-level sources rather than local sources, as would be the case in a state that relied heavily on the property tax.

The State Equalization Guarantee (SEG) is the formula that New Mexico uses to distribute funds to the state’s 88 school districts. The SEG is driven mainly by school ‘average daily membership’ or student counts. Total appropriations for the public schools are divided by the number of projected units to derive the SEG unit value. The SEG makes it possible for there to be some local control over how funds are spent even though the funding system is centralized.

The blue line in Figure II shows that the SEG increased smoothly for almost three decades—from school year 1984-85 to SY 2008-09—before dropping at the onset of the current recession, from which New Mexico is still struggling to recover. The orange line, which provides a picture of the value of the SEG adjusted for inflation, shows a much more truncated growth trajectory.

K-12-Figure-II

As the SEG fell in SY 08-09, student enrollment in the state’s public schools was trending slowly upward at an average rate of about 0.34 percent (the green line). The state’s public schools were expected to do more with less.

Revenues for Public Schools

Broadly speaking, there are four uses of revenues in the Public Education Department accounting system: operational, special projects, capital outlay, and debt service. Each of the uses relies on revenues from different sources, but only operational and special projects revenue are included in the SEG.

Revenues going to each of the four classifications fluctuated in different ways during the past eight years.

Revenue for the largest classification—operational expenses—fell during the recession and began a slow recovery in SY 11-12. In contrast, revenues for ‘special projects’ increased during the recession, as federal funding accounts for a significant share of revenue for this category. This funding includes a wide array of programs, from school lunches to Title I funds for schools in high-poverty neighborhoods.

By combining operational and special projects revenues we get a more focused picture of the resources available to school districts. Figure III shows nominal and inflation-adjusted per-pupil revenues for operations and special projects combined. Inflation-adjusted revenues reaching $8,528 in SY 14-15 were still below the peak reached in SY 08-09 ($9,551).

K-12-Figure-III

‘Below-the-Line’ Funding

An issue that has come to the fore in the school funding discussion in the past five years is that of the amount of school funding provided through the SEG and the amount appropriated apart from the SEG, which is referred to as below-the-line funding. The fact that an increasing amount of funding does not go through the SEG may be seen as a problem for local school districts, because non-SEG funding is earmarked for specific purposes and cannot be used for the priorities of the local school districts. Arguably, local school districts are closest to their specific problems and may be better able to respond to local issues.

Figure IV shows that the SEG unit value has risen from $3,871.79 in FY 09 to $4,027.75 in FY 16. This represents an increase of $156 or 4.03 percent over that time period.

Figure V shows that ‘below the line’ or non-SEG appropriations have increased at a significantly steeper rate, from $39.6 million in FY 09 to $101 million in FY 16. The increase in non-SEG funding represents movement away from the principles of the state’s system for funding public schools, which is intended to provide equality of opportunity irrespective of the relative wealth of individual school districts.

K-12-Figure-IV-V

In conclusion, the Great Recession inflicted a serious blow to New Mexico funding for public education. It has taken eight years to emerge from the havoc created by that economic earthquake. In addition, most years the number of students enrolled in public education grows and inflation chips away at the value of educational expenditures.

The lawsuit filed by the New Mexico Center on Law and Poverty has described the problems facing the state’s public education funding system in detail. This report maps out the recent history of public school funding and the continued erosion of the resources going to the school system. Following the recommendations of the 2008 American Institute for Research study to increase public school funding by at least 15 percent would be a way to begin solving the funding problem faced by the New Mexico public school system. This would add about $400 million to the FY 17 appropriation of $2.648 billion. This increase would establish a new base of $3.048 billion from which to build in future years.

Endnotes

1. Complaint: “Lawsuit Filed Challenging Sufficiency of State Education,” New Mexico Center on Law and Poverty, July 2015, http://nmpovertylaw.org/wp-content/uploads/2015/08/Complaint-Yazzie-Second-Amended-Complaint-2015-07-14.pdf
2. An Independent Comprehensive Study of the New Mexico Public School Funding Formula–Final Report, American Institutes for Research, January 2008

Download this executive summary (Aug. 2016; 4 pages; pdf)
Download the full report by Gerry Bradley, MA (Aug. 2016; 14 pages; pdf)

The Fiscal Policy Project, a program of New Mexico Voices for Children, is made possible by grants from the Annie E. Casey Foundation, the McCune Charitable Foundation, and the W.K. Kellogg Foundation.

Making College More Affordable for Working Families: A Critical Investment in New Mexico

ColAfford-coverDownload this report (March 2015; 12 pages; pdf)
Link to the press release

by Gerard Bradley, MA
In the United States it has long been an article of faith—and economic statistics confirm it—that higher levels of education lead to higher incomes. Higher educational levels also lead to stronger communities and a better economy. We all benefit when young adults become doctors and nurses, engineers and chemists, teachers and first responders, or a whole host of other occupations that require a college degree or credential.

While higher education does lead to higher incomes, the converse is also true. Children from high-income families do better in school, are more likely to graduate high school, and go to college at significantly higher rates than do children from low-income families.1 There is more to this equation than money, of course. Whether children ultimately go on to college is also influenced by their parent’s own level of education, what kinds of enrichment opportunities were available to them, and many other factors.

Nationally, about 40 percent of adults have a college degree (associates or higher). In New Mexico, just 34 percent of adults have completed a college degree. Only nine states do worse. Not surprisingly, New Mexico’s income levels are lower than those in most other states. We also have a higher percentage of jobs that require little education and pay poverty-level wages, as well as a high poverty rate. Bottom line: the lower our percentage of degreed adults, the lower our percentage of doctors, teachers, engineers, and other well-paid professionals.

Considering the often symbiotic nature of income and education—and, on the other extreme, the cyclical nature of poverty—it is clear that states have an interest in ensuring that a college education is accessible to a broad swath of its population. After all, if all of our college graduates come from the same socio-economic stratosphere, we are clearly not tapping the potential of a vast segment of our population. But the high cost of college puts it out of the reach of too many New Mexicans. Even students who manage to attend college for a time, often need support in order to earn credentials or a degree. Students often cite the need to work and earn money as a major reason they drop out of college. Add to that the disparities in both education and income levels between Hispanics—the state’s largest ethnic group—and non-Hispanic whites, and New Mexico has a great deal to gain from making college more affordable for its residents.

ColAfford-Definitions

New Mexico has enacted a few policies to help make a college education more affordable, but as education data indicate, they have not been enough. Meanwhile, the state made some of the largest per-student spending cuts to higher education in the nation during the recession,2 New Mexico gives a significantly smaller share of its financial aid on a need-basis than the national average3 (see Figure I) and, perhaps most telling, despite leaving college with lower-than-average debt burdens, New Mexico students default on student loans at the highest rate in the nation.4

ColAfford-Figure I

This report will show that current economic conditions facing low-income working families are such that these families have difficulty finding the resources to better their condition by obtaining a higher level of education, specifically through the community college system.

Helping with the Cost of College

In 1996 the state Legislature enacted the New Mexico Legislative Lottery Scholarship. The scholarship covers tuition at New Mexico universities for students attending college right after graduating from a New Mexico high school as long as they maintain a 2.5 grade point average. Students still have to cover fees, books, and living expenses. While the scholarship has undoubtedly allowed thousands of students attend college who would otherwise be unable, it is a merit-based scholarship, meaning any student who meets the academic and other criteria can receive it even if they could afford college without it. It also leaves out countless adults who wish to return to college after entering the workforce.

Demand for the Lottery Scholarship almost doubled from more than 10,000 students to more than 17,000 students from the spring semester of 2000 to the spring of 2010. During that same time, the total amount paid out in scholarships more than tripled from $8.8 million to $28.6 million per semester.

Due in part to this growing demand, as well as a leveling off of sales of lottery tickets and increases in tuition—which grew rapidly due to deep recession-era cuts in state funding—the balance of the Lottery Scholarship Trust Fund has been dwindling over the past several years. The fund was headed toward depletion when lawmakers changed the eligibility criteria in 2014. Rather than make the scholarship need-based, though, the Legislature limited the percentage of tuition the scholarship would cover, and required students at four-year universities to take a full-load of 15 credit hours per semester, up from the previous requirement of 12 hours. In essence, the changes have made it less helpful for low-income students—who now have to pick up part of the cost of tuition—and completely out-of-reach for students who cannot manage a 15-hour academic schedule because they also must work.

The College Affordability Fund was established in 2005 for students who lacked other financial resources or do not qualify for Lottery Scholarship assistance due to their age or academic standing. The fund had reached a high of $50 million prior to the recession, but was depleted to shore up other state spending.

Although no money has been deposited into the College Affordability Fund in the past several years, the Higher Education Department (HED) has continued to provide about $2 million in need-based scholarships per year to roughly 3,500 students. Not only does the balance sheet for the fund (see Figure II) fail to indicate the source of this $2 million, it raises more questions about the viability of the fund than it answers. Staff members at HED were unresponsive when asked to provide an explanation.

ColAfford-Figure II

An Educated Workforce: How New Mexico Stacks Up

New Mexico does worse than the national average—and significantly worse than some of our surrounding states—when it comes to the educational levels of our adults aged 25 to 54. In this age group, 14 percent are without the most basic educational qualification—a high school diploma or equivalence—which ranks us 45th in the nation (see Figure III). Without a high school diploma, most workers are trapped in low-wage jobs that lack benefits and have no real hope of future advancement.

ColAfford-Figure III

Of comparable surrounding states, which were selected for comparison because they have similar demographic or economic characteristics to New Mexico, Arizona and Texas do worse (in the case of 49th ranked Texas, considerably worse), but Colorado, Utah and Wyoming do significantly better than even the national average. New Mexico’s high percentage of adults without a high school diploma shows the need for more effort on the part of the state to reach working-age adults with adult basic education programs that lead to a certificate of high school equivalency.

When these data are broken out by race/ethnicity, an even more troubling picture emerges (see Figure IV). While the problem is not negligible among non-Hispanic whites (with 6 percent lacking a high school diploma), it is clearly much more significant among all racial/ethnic minorities (20 percent), with Hispanics (22 percent) having the highest rate. One goal of educational policy for adults should be to narrow the gap between minorities, especially Hispanics and non-Hispanic whites.

In New Mexico, 27 percent of adults aged 25 to 54 have a high school diploma but no college (see Figure V). This is not much different from the national average of 26 percent and ranks New Mexico 22nd among the states by this measure. However, non-Hispanic whites perform well by this measure, as 19 percent of this group have only a high school diploma. Adults from all racial/ethnic minorities fare far worse, with 31 percent having only a high school diploma; 25 percent of African Americans and 31 percent of Hispanics have this minimal educational level.

ColAfford-Figure IV-V

The rates improve when looking at New Mexico adults with some post-secondary education but no degree (see Figure VI). However, this is indicative of both success and underlying problems. Nearly 25 percent of adults ages 25 to 54 completed some post-secondary course work but failed to receive a degree, compared to 22 percent nationally. While completing any college course work is preferable to completing none, those who don’t receive a degree will earn less than those who do. Failure to complete the degree may be due to a number of causes including insufficient preparation for post-secondary course work, financial constraints, and family obligations. It may also account for some of New Mexico’s high rate of student loan default.

New Mexico’s non-Hispanic whites represent the highest percentage of these adults, with 26 percent completing some post-secondary coursework but not finishing a degree. The percentage for all minorities was 24 percent, for African Americans 24 percent, and for Hispanics 23 percent.

The fact that a quarter of New Mexico adults have some post-secondary coursework is a foundation for policy intervention that could improve the rate of completion of associate’s degrees and other credentials from community colleges. The fact that the percentage of racial/ethnic minorities with some post-secondary coursework approached that of non-Hispanic whites is especially encouraging. Making community college tuition-free, as the state of Tennessee recently did, would be a reasonable way of addressing this situation.

New Mexico has a ways to go to catch up with the rest of the nation in the percentage of adults who have an associate’s degree or higher (see Figure VII). New Mexico, with just slightly more than 34 percent of its adults earning degrees, is well below the national average of about 40 percent. The all-too familiar ethnic/racial disparities are especially telling in this case: 49 percent of non-Hispanic whites have an associate’s degree or higher, while only 25 percent of all minority adults and 24 percent of Hispanics earn degrees. Roughly twice as many non-Hispanic whites have a college degree compared with racial/ethnic minorities.

ColAfford-Figure VI-VII

Our Working Families Struggle

The numbers get worse when we look at the educational levels of low-income working families. A low-income family of four earned no more than $46,100 in 2012, or twice the federal poverty level. Almost one-third of New Mexico’s low-income working families have at least one parent without a high school diploma or equivalence (see Figure VIII). This is slightly higher than the national level of 29 percent. New Mexico ranks 45th lowest of all states by this measure. Of comparable states, Arizona (35 percent, ranking 47th) and Texas (42 percent, ranking 49th) do worse.

Low-income working families in New Mexico do slightly better than the national average when it comes to parents with some post-secondary education (see Figure IX). In New Mexico, 46 percent of low-income working families have no post-secondary education while the national average is 49 percent. New Mexico ranked 27th out of all states, though, far higher than Texas—with 58 percent and ranking 49th.

ColAfford-Figure VIII-IX

While New Mexico’s low-income families may have low levels of education, their adults are still out in the workforce, struggling to care for their children. In New Mexico, nearly three-quarters of low-income families are working families (see Figure X). The jobs held by members of these families typically pay low wages. Although the rate of low-income families that are working is higher in New Mexico than nationally, New Mexico had a lower percentage than comparable states in the region in 2012. Labor market conditions that year were better in Arizona, Colorado, Texas, Utah and Wyoming.

While Figure X shows the percentage of all low-income families that are working families, Figure XI shows the percentage of all working families that are low-income. This tells an even more dramatic story: nearly 43 percent of all working families in New Mexico earned an income below 200 percent of the poverty level in 2012. New Mexico’s rate is fully one-third higher than the national level of 33 percent and higher than all the states selected for comparison. New Mexico ranked 49th—or second worst in the nation—in terms of the percentage of working families getting by on bare-bones incomes. Clearly, working hard is not paying off for New Mexico’s families.

ColAfford-Figure X-XI

When race/ethnicity is taken into account, the picture darkens. More than 48 percent of New Mexico low-income families have at least one parent of a racial/ethnic minority group (see Figure XII)—a full three percentage points higher than the national average of 45 percent. Interestingly, Arizona (51 percent) and Utah (54 percent) had noticeably higher percentages than New Mexico. (They also have considerably smaller percentages of racial/ethnic minority adults: Just 18 percent of Utah’s and 38 percent of Arizona’s adult populations are non-white, while 56 percent of New Mexico’s is non-white.)

What should be of greatest concern to New Mexico policy makers is the high percentage of children living in low-income working families (see Figure XIII). Almost 48 percent of New Mexico’s children live in low-income working families. With nearly half of all children in low-income working families—far higher than the national average of 38 percent—New Mexico ranks 49th among the states. Even Arizona and Texas (both at 45 percent) perform better than New Mexico in this measure. Children living in low-income families are less likely than their middle- and high-income peers to do well in school, graduate, and attend college.

ColAfford-Figure XII-XIII

Not surprisingly, the demand for labor in New Mexico is heavily skewed toward low-wage occupations (see Figure XIV). In 2012, 30 percent of New Mexico jobs were in occupations that paid below the 2012 federal poverty threshold of $23,050 for a family of four. Even more distressing, fully two-thirds of New Mexico jobs were in occupations with a median annual pay below $46,100 for a family of four (see Figure XV).

ColAfford-Figure XIV-XV

At that income level, families do not earn enough for even a bare-bones standard of living (see Figure XVI). When families cannot even cover basic living necessities, they will have no way to pay for a college education.

ColAfford-Figure XVI

Given these economic realities, it’s clear that few low-income working families can afford two semesters of tuition per year, even at New Mexico’s relatively inexpensive community colleges (see Figure XVII).

ColAfford-Figure XVII

Policy Recommendations

Restore money to the College Affordability Fund and expand eligibility. New Mexico should improve college affordability for low-income adults by providing significantly more state-funded, need-based financial aid. Restoring the currently empty College Affordability Fund would provide need-based tuition assistance to those who have been out of school for more than a year and may not qualify for merit scholarships. This fund should also be available to students taking less than a half-time course-load so non-traditional students can more easily fit school into their work schedules.

Develop a comprehensive career pathways framework. Some community colleges in New Mexico offer career pathways bridge programs like I-BEST (Integrated Basic Education and Skills Training) that help low-skilled adults gain high-demand post-secondary credentials by combining adult education with basic skills and technical instruction. The state should develop a comprehensive and statewide career pathways framework that better integrates and aligns adult education, bridge programs, and college courses to increase credential attainment and improve our workforce. States will soon have to focus more intently on career pathways when Workforce Innovation and Opportunity Act regulations are released in the spring.

Provide integrated student support services including child care assistance. Student support services, including child care assistance, are an integral part of effective career pathways. Eligibility for child care assistance should be increased from the current 150 percent of the federal poverty level (FPL) to the pre-recession 200 percent of FPL to help all low-income parents. Access to high-quality child care is an effective two-generation solution that provides early childhood education to young children while enabling parents to increase their education and earn marketable credentials. In studies of student parents taking classes at community colleges, researchers found that between 60 percent and 70 percent of respondents were dependent on child care services to continue their education.5

Make the Lottery Scholarship need-based. Given New Mexico’s high rate of poverty, making its flagship scholarship need-based is the most sensible course of action. There could be a complete shift to need-based criteria or a blending of merit-basis criteria with need-based criteria. The concept of a lottery scholarship based entirely on financial need could utilize the existing Free Application for Federal Student Aid (FAFSA).

Tap into unspent TANF funds. The federally funded TANF block grant is targeted to low-income parents and pregnant women to help them achieve economic self-sufficiency. Other states have effectively used TANF funds to pay for vocational training, post-secondary education, and child care assistance.6 In the past few years, New Mexico has rolled over millions of dollars of unspent TANF funds that could be used now to help low-income families earn credentials and weather the persistent economic downturn. Data show that about 10 percent of TANF recipients are enrolled in education and/or training in New Mexico (the national average is 9 percent).7 New Mexico should follow the lead of Oklahoma and Georgia, which rank at the top of that category by enrolling more than 30 percent of their TANF recipients in education and training programs.

Endnotes

1 “Real Analysis of Real Education,” Anthony Carnevale, Liberal Education, Volume 94, Number 4, 2008
2 Recent Deep State Higher Education Cuts May Harm Students and the Economy for Years to Come, Center on Budget and Policy Priorities, 2013
3 State Higher Education Finance: FY 2011, State Higher Education Executive Officers (SHEEO)
4 Student Debt and the Class of 2014, U.S. Department of Education, 2014
5 Improving Child Care Access to Promote Postsecondary Success Among Low-Income Parents, Miller et al., Institute for Women’s Policy Research, 2011.
6 Funding Career Pathways and Career Pathways Bridges: A Federal Funding Tool Kit for States, Center for Postsecondary and Economic Success at CLASP, 2013.
7 Working Poor Families Project analysis of U.S. Department of Health and Human Services 2011 data

Download this report (March 2015; 12 pages; pdf)
Link to the press release

The Working Poor Families Project is funded by the Annie E. Casey Foundation, Ford Foundation, Joyce Foundation, and The Kresge Foundation.

Strengthening New Mexico’s Workforce and Economy by Developing Career Pathways

Increasing Access to Post-Secondary Education, Credential Attainment, and Economic Security for New Mexico’s Many Low-Skill and Low-Income Workers

CareerPath-cover
Download this report (Sept. 2014; 20 pages; pdf)
Download the companion PowerPoint (23 slides; pdf)
Link to the press release

by Armelle Casau, Ph.D.
New Mexico has long had difficulty attracting new businesses and high-wage jobs to the state. Companies look at several factors when determining where to locate. Among them are factors we can do little to change—such as geography and natural resources. One factor we can change is the quality of our workforce. Unfortunately, New Mexico does not compare favorably to the rest of the nation when it comes to the educational levels of our working-age population. Given our low rates of educational attainment, it’s not surprising that New Mexico ranks poorly in the percentage of working families that are living at or below the federal poverty level (FPL). Working adults who live in poverty generally lack the financial resources to improve their lot by furthering their education. In turn, their children are less likely to succeed in school than their counterparts from higher-income families, thus continuing the cycle of low-wage work and poverty.

To break this cycle, states offer a variety of programs to help low-skilled workers receive basic education, occupational training, and certification, and/or earn a college degree. In New Mexico, these programs are disjointed and underfunded. Currently, adults in New Mexico who need to improve their literacy, math, and English proficiency skills, and earn high school equivalency credentials typically first enroll in adult education programs—like adult basic education (ABE), adult secondary education (ASE) or English as a second language (ESL). If they finish those programs, they then must enroll in a community college or an occupational skills training program where they can gain workforce skills and earn industry-recognized credentials. Unfortunately, completion rates in this fragmented approach are low, as are the rates of students who transition to college.

New Mexico should develop and invest in a comprehensive career pathways framework that moves non-traditional adult students along a continuum into post-secondary education. As implemented in many other states, a career pathways framework weaves together and aligns adult basic education programs, workforce training, and college courses while offering comprehensive student support services.1,2 As first steps, so-called bridge programs connect adult education to colleges and careers by simultaneously integrating basic skills and technical instruction, and preparing participants for college-level courses3 (see Figure I for a diagram of typical career pathways steps).

CareerPath-Figure I

Strongly and collectively supported by the U.S. Departments of Education, Labor, and Health and Human Services, career pathways are effective because they are organized in series of manageable, stackable, interconnected, and credit-bearing steps that prepare and support individuals to quickly reach higher levels of education and gain industry-recognized, post-secondary credentials that can lead to employment in high-demand occupations.4

States across the nation are actively fostering strong partnerships for career pathways programs among adult education and technical education providers, colleges and universities, workforce development stakeholders, human services agencies, and employers. New Mexico should do the same to serve its many low-skilled and low-income adults. New Mexico’s businesses and industries would benefit from a more qualified and productive workforce and the state would be more competitive and its economic future would look brighter.

Low Educational Attainment and Income

New Mexico’s labor force has significantly lower levels of educational attainment than those in most other states. Of the 1.3 million adults ages 18 to 64 in New Mexico, 69 percent (or almost 890,000) are without a college degree and 15 percent (more than 190,000) have no high school diploma or equivalent (see Chart I). In addition, 9 percent (almost 120,000) have difficulty with English.5

CareerPath-Chart I

Looking specifically at adults aged 25 to 54—the age group that makes up almost two-thirds of adult education participants in the state—New Mexico ranks 45th nationally for the percentage with no high school diploma or equivalent, and 41st for the percentage with no associates degree or higher. New Mexico also doesn’t fare well compared to other states in the mountain west region. Of the 800,000 adults ages 25 to 54, almost 66 percent (about 530,000) are without a college degree (see Chart II) and 14 percent (110,000) have no high school diploma or equivalent (see Chart III). The educational deficits of New Mexico’s workforce set up barriers to economic development for the state.

CareerPath-Chart II-III

One’s earning potential is closely linked with their educational level—more education generally leads to more money. Not surprisingly, low-income families in New Mexico tend to have low levels of educational attainment. An estimated 31 percent of low-income families—those that live below 200 percent of the federal poverty level (FPL), meaning they earn $47,700 or less for a family of four—have at least one parent without a high school diploma or equivalent and 46 percent have no parent with any post-secondary education. Additionally, 25 percent of low-income families have at least one parent who has difficulty speaking English, which makes it harder for these parents to get jobs paying family-sustaining wages and to participate fully in their children’s education.

The situation is worse for poor families—those making below 100 percent of FPL ($23,850 or less for a family of four)—with 38 percent having at least one parent without a high school diploma or equivalent, 51 percent having no parent with any college, and 30 percent having at least one parent who has difficulty speaking English.6

With higher levels of education, New Mexico workers would significantly reduce their chances of living in poverty and increase their chances of earning family-sustaining wages (see Charts IV and V).

CareerPath-Chart IV-V

Still Working, Still in Poverty

By and large, New Mexico’s poor and low-income families are working hard but are still unable to become financially secure and independent. More than half of our poor families are working, as are nearly three-quarters of our low-income families. These rates are slightly higher than the national average.7

Overall, too many of New Mexico’s working families struggle economically. Almost 16 percent of all working families (32,320 families) are poor and nearly 43 percent (88,745 families) are low-income. Nationally, just 11 percent of working families are poor and 33 percent are low-income (see Charts VI and VII). This places New Mexico 49th in the nation for both indicators—only Mississippi fares worse.

CareerPath-Chart VI-VII

What’s bad for working families is bad for their children. Almost half of New Mexico children under age 18 (48 percent or 207,735) live in working families that are low income, and almost one-fifth (19 percent or 83,035) live in working families that are poor. We rank 49th in the nation in both of these indicators as well.8

Too Many Low-Wage Jobs

When we look at median wages, we can see why many families have a hard time making it economically. In New Mexico, 30 percent of our jobs (more than 250,000 jobs out of nearly 840,000 total) are in occupations with poverty-level wages for a family of four ($23,850 or less). New Mexico has the highest percentage of such jobs in the mountain west region (see Chart VIII) and ranks 43rd nationally. New Mexico does slightly better than some states in the region when looking at jobs that pay low income wages (see Chart IX), but fully 68 percent of jobs pay wages too low to adequately support a family of four ($47,700 or less). Unfortunately, we are unlikely to lure higher-wage jobs until we can offer companies a more educated and skilled workforce.

CareerPath-Chart VIII-IX

Not Enough Middle-Skill Workers

Middle-skill jobs are those that require more than a high school diploma but less than a four-year degree. These types of jobs are very good for New Mexico since they usually offer family-sustaining wages. Unfortunately, there are just too many low-skill workers and not enough middle-skill workers in the state. Based on data from New Mexico’s Department of Workforce Solutions (DWS), the National Skills Coalition estimated that in 2018, 24 percent of jobs will be low-skill, 46 percent of jobs will be middle-skill, and 30 percent will be high-skill (see chart X). Unfortunately, looking at 2012 data, 42 percent of adults over 25 years of age in Mexico were low-skilled, 32 percent were middle-skilled, and 26 percent were high-skilled (see Chart XI).

CareerPath-Chart X-XI

Increasing the number of adults with post-secondary credentials is crucial, as states with high educational attainment levels are also high-wage states.9 It is important to note that educational solutions are needed that go beyond the traditional high school-to-college pipeline since current working adults make up the majority of the future workforce.10

The Current Status of Adult Basic Education

In program year 2012-2013, nearly 19,400 New Mexicans participated in adult education programs, which are administered by the state’s Higher Education Department (HED). The department acknowledges that this represents only about 5 percent of the adults eligible for these educational services and that many adults are stuck on waiting lists. Of those participants:11, 12

  • 75 percent were poor (earning less than 100 percent of FPL);
  • 69 percent were either unemployed or not in the labor force;
  • 19 percent were single parents;
  • 55 percent were females and 42 percent were Hispanic females;
  • 72 percent were Hispanic and 10 percent were Native American;
  • 62 percent were 25 years of age or older;
  • 38 percent entered as ESL students;
  • 16 percent needed basic literacy instruction (below 4th grade equivalency);
  • 38 percent entered at adult basic levels (roughly between 4th to 8th grade equivalency); and
  • 9 percent entered at the adult secondary levels (between 9th and 12th grade equivalency).

While these adults need to improve their literacy, math, and English proficiency skills, and earn high school credentials, many also want and need access to career and technical education classes that can lead to employment and self-sufficiency—but few are likely to persevere on that path. In the 2012-13 program year, only about 30 percent of all participants who started adult education programs completed their levels. An estimated 8 percent transitioned into college or occupational training after exiting their program.13

In our current system, a tiny fraction (less than 4 percent) of the adults enrolled in education programs (who are, themselves, a tiny percent age of eligible adults) are participating in the career pathway bridge program I-BEST (described in detail later in this report) that integrates adult education with career and technical skills building. This program is preliminarily yielding a 51 percent program completion rate with earned credentials, with another 32 percent of students still in process, and only 16 percent dropping out or taking a break.14

Low-skilled adults are more likely to persevere when enrolled in programs that combine basic education with sector-based skills building. As one of the states that administers adult education programs through a higher education department (rather than a K-12 education or workforce/labor department, as in some states), New Mexico has an opportunity to better integrate ABE services with career-focused courses and higher education institutions to increase post-secondary credential attainment. Unfortunately thus far, most of the attention has been on just building basic skills rather than on offering career pathways to provide effective ways out of poverty.

New Mexico adults are eager to earn industry credentials and college degrees to improve their economic security. New Mexico was recently ranked first in the nation for the percentage of adults enrolled at least part-time in post-secondary institutions (10 percent in the state compared with 7 percent nationally).15 Unfortunately, the state ranks 46th in the nation (and last in the mountain west region) in the percentage of community college students who go on to obtain certificates or degrees in a 3-year period or transfer to a 4-year college (only 27 percent compared with the national average of 38 percent).16 More needs to be done to make college completion a feasible and successful option for low-skilled workers.

An Insufficient Investment

In New Mexico, about $9.6 million was invested in adult education programs in fiscal year 2013, with $4.2 million coming from the federal government. The number of funded students is still down almost 20 percent since the program year 2009-2010 when the state began cutting funding.17 The national average for state-allocated resources for adult education and literacy is $50 per adult without a high school diploma or equivalent. All of the mountain west states except Utah invest less than the national average, with New Mexico spending just $30 per adult (see Chart XII).

CareerPath-Chart XII

Even though overall funding for these programs in New Mexico has decreased in recent years, bills introduced during the 2014 legislative session for additional funding either did not pass or were pocket vetoed. What’s more, despite its high poverty rate, New Mexico awards a very small percentage of its state-funded college financial aid on a need-basis compared with the national average (see Chart XIII). The mountain west states of Colorado and Arizona provided 99 and 100 percent, respectively, of their financial aid on a need-basis.

CareerPath-Chart XIII

Many states that invest heavily in adult education programs, like Connecticut ($183 per adult) and Vermont ($175), also rank high in the educational attainment of their adult workforce. In the mountain west region, there is a rough correlation between states that invest in these programs and states that have better educational attainment numbers. Colorado is a stand out: it has not traditionally funded ABE well and yet has relatively high educational attainment rates. This is known as the “Colorado Paradox,” in which the high educational attainment numbers are attributed to talent imported from other states rather than sufficient educational investments in its homegrown population. In the past couple of years though, Colorado has made adult education more of a priority. In 2014, with support from the business community, the state appropriated nearly $1 million in funding for bridge career pathways programs that require ABE providers to work with at least one post-secondary institution and one workforce development provider to help break institutional silos and better align adult education programs with occupational skills training programs.18, 19

In 2014, governors and legislators from 14 other states enacted legislation to invest in career pathways, foster sector partnerships, and align data and systems to help close the middle skills gap.20 In addition, the recent reauthorization of the federal Workforce Innovation and Opportunity Act (WIOA) presents states with an opportunity to capitalize on the federal government’s commitment to more effectively promote career pathways and sector partnerships.

A First Step toward Career Pathways

A few years ago, New Mexico took a first step toward building a career pathways program. NM HED was awarded an Accelerating Opportunity (AO) grant from the Gates Foundation in 2011. This $200,000 planning grant was for starting a career pathways bridge program called I-BEST (Integrated Basic Education and Skills Training) at six community colleges. Bridge programs like I-BEST—often first steps on career pathways—offer streamlined and integrated classes that accelerate skill building by combining basic education with technical training. In this contextualized learning, students improve their language and college skills in the context of their field of study.

Currently more than 20 states are trying the I-BEST model (while other states have implemented different types of bridge programs) and many use a co-teaching strategy where classes (including ESL) are co-taught more than 50 percent of the time by an adult education instructor and a career and technical education instructor (CTE) to ensure that students gain basic and occupational skills simultaneously for accelerated learning. As in other states, I-BEST programs in New Mexico offer courses of study that vary across sites and are matched to DWS job projections and, therefore, tailored to the needs of local communities and focused on high-growth occupational areas. The fields of study range from electrical trades to welding, pharmacy technicians, wind energy, home health aides, plumbing, early childhood multicultural educators, and certified nursing assistants. Despite the high success rate mentioned earlier, less than 4 percent of New Mexico’s nearly 20,000 adult education participants are enrolled in I-BEST programs.

The state, unfortunately, opted to not apply for the implementation phase of the AO project to scale up I-BEST, but a three-year Trade Adjustment Assistance Community College and Career Training (TAACCCT) grant from the U.S. Department of Labor was secured to develop a Skill Up Network (SUN) to expand and improve the capacity of community colleges to provide education and career training programs that can be finished in two years or less. The TAACCCT grant currently funds four program components in New Mexico: an online course-sharing system across 13 colleges; a system to grant credit for prior learning; information technology entry-level certificates; and I-BEST. This grant, which has enabled the I-BEST program to continue, ends in the fall of 2014 and state monies have not been allocated to sustain it once the federal money runs out.

I-BEST is only one example of a bridge component along a career pathways framework. Moving forward, New Mexico should focus on developing a statewide career pathways framework that focuses on a couple of key sectors (like nursing or early childhood education, for example) and that includes well-integrated bridge programs in the career pathways pipeline. Overall, effective career pathways frameworks in other states have been found to include:21, 22, 23

  • Well-articulated, short-term, and stackable training steps with multiple entry and exit points that encourage student persistence;
  • On-ramps and off-ramps to ease access to adult education, career programs, and post-secondary institutions, as well as transition back into the workforce;
  • Continually adjusted and well-defined pathways that provide clear paths to post-secondary, industry-recognized credentials in key industry sectors;
  • Contextualized learning so low-skill students can improve their language and college skills within the context of their chosen field of study for accelerated learning;
  • Comprehensive assessments that enable participants to enter at appropriate steps;
  • Accelerated and flexible programs that recognize the needs of non-traditional adult student populations with changing personal and work situations;
  • Comprehensive support services including academic supports (tutoring and help with educational plans), personal guidance (one-on-one case management and group-level assistance), and supplemental support services (child care assistance, transportation vouchers, and financial assistance to cover tuition, books, and other costs); and
  • Strengthened partnerships between stakeholders including community colleges, ABE providers, state agencies, workforce development boards, and employers.

Figure II is an example of the academic and career steps of a health care career pathway. It includes bridge programs for students to enter at multiple points along the pathway, short-term and stackable steps with connecting points, and clear lines-of-sight to certificates with matched expected wage earnings. States with effective career pathways frameworks actively identify, develop, and articulate credential attainment pathways for their high-growth occupations. The case study (see boxed text) details some of the steps the state of Arkansas and its community colleges took in building its comprehensive career pathways framework.

CareerPath-Figure II

CareerPath-CaseStudy

Return on Investments on Adult Education and Career Pathways Programs

Overall, even with low completion rates, adult education programs have high rates of return on investment (ROI). Based on the calculations of NM HED, the state’s investment of just $5.4 million generated almost $36 million in savings (including savings on public assistance), added economic growth to the state (through higher earnings), and increased income for the participants (including new employment and job promotions). Every dollar the state invested in adult education yielded more than $5 in benefits to individuals, the state, and the economy.24 This number is comparable with ROIs in other states.

New Mexico could leverage this positive ROI and compound it with the added benefits of career pathways programs. Researchers in Washington state, where I-BEST was started, have found that I-BEST students are three times more likely to earn college credits, nine times more likely to earn workforce credentials, and are employed at double the number of hours per week (35 versus 15 hours) when compared with non-I-BEST students.25 In 2013, an analysis for the I-BEST model in Washington state found an ROI of 329 percent for student completers based on wage gains over the students’ lifetime. The same study showed other financial benefits with a positive ROI of 42 percent in the form of higher tax receipts and lower social costs.26

As discussed earlier, the I-BEST bridge program in New Mexico is showing great promise with 84 percent of participants either having completed their programs, earned certificates, or still in progress and less than 16 percent having dropped out or stopped for now. A 2014 study by the state Legislative Finance Committee (LFC) pointed out that the state’s consecutive method—first, adult education and then, technical/career programs—requires on average that students enroll in five semesters of courses at a cost of $3,800 per student. The integrated NM I-BEST model only takes two semesters to complete at a cost of $2,000.27 This is a win-win for the students in terms of time commitment and for the state in terms of investment and positive outcomes.

As another example of positive impacts of career pathways, researchers looking at Minnesota’s FastTRAC found that 88 percent of participants in the integrated credit-bearing courses completed their programs and/or earned industry-recognized credentials, compared with traditional programs where just 25 percent completed their remedial courses and only 4 percent had completed a degree or certificate in the five years following enrollment.28

The momentum for career pathways, including bridge programs, has increased in recent years. Many federal agencies, philanthropic organizations, state policy makers, PSE institutions, workforce development groups, human services state agencies, and industries are converging on the positive impacts and outcomes that career pathways yield for low-income and low-skilled adults looking to earn post-secondary credentials that can lead to economic security for themselves and their families.

Policy Recommendations

In 2010, Skills2Compete-New Mexico, a convening by the National Skills Coalition, created a platform of priorities to ensure that our state’s workforce had the necessary skills to compete. Core advisors included representatives from state agencies as well as business, education, workforce, advocacy, and funding stakeholders.29 Some of the recommendations focused on creating career pathways and included the need to:

  • Better coordinate and align adult education programs and post-secondary institutions;
  • Focus on high-growth occupations and industry needs to create effective career pathways;
  • Create accessible career pathways based on best practices for instruction and curriculum;
  • Increase funding for adult education and career pathways programs;
  • Provide targeted financial and student support services; and
  • Develop incentives for institutions and programs to increase middle-skills gains.

These priorities, bolstered by the shift towards career pathways in numerous other states and at the federal level, are very much in line with the policy recommendations listed below.

Revamp the ABE state plan to focus on career pathways and transition to college. The current state plan for adult basic education and family literacy, which has not been updated since 2006, only briefly mentions the need for post-secondary institutions to better integrate adult education with occupational training programs.30 The ABE state plan is currently being revised and should have as priority goals the transition of participants into college and the creation of a statewide career pathways framework. (See Illinois’ ABE visioning document for examples of recommendations to address the changing needs of adult learners in the 21st century economy.31)

NM HED could take the lead on designing and implementing a career pathways framework that supports community colleges and their many low-income, low-skilled adult student populations, much like in Arkansas. The plan would need to include systems-level strategies to increase the availability of and access to well-defined and articulated career pathways components, including bridge programs like I-BEST, and comprehensive adult student support services. The New Mexico Association of Community Colleges, the New Mexico Independent Community Colleges, the New Mexico Adult Education Association, and the two-year post-secondary institutions themselves should partake in the process and leverage existing community college infrastructures, capacity, and programs already in place. Four-year colleges and universities should also be key partners in the process.

A promising partner is the DWS, which has expressed interest in career pathways programs since they can improve the economic security and employment status of adults across the state. The DWS is currently looking into ways to reduce hurdles in data sharing; better involve Workforce Investment Boards (WIB) and one-stop centers in career pathways; and more effectively integrate and locate its staff on community college campuses to help advise students with career decisions and transition into the workforce. Another key partner should be the New Mexico Human Services Department which oversees support services, including the TANF program, that help low-income individuals and families become economically secure.

Determine adult education funding and workforce development needs. In 2014, a legislative memorial unanimously passed the state House (although not the Senate) requesting that HED form a work group to study the feasibility of fully funding the formula for adult education programs. Convening this work group would give stakeholders in the adult education community—including community colleges, workforce development groups, and state agencies—an opportunity to research career pathways and make recommendations to legislative committees. As requested by some legislators, the state should also fund a workforce gap forecasting study to determine how HED, DWS, and the Economic Development Department can identify strategies to address future workforce development needs.

Expand and refine performance measures to focus on educational and economic outcomes. Since fiscal year 2011, the funding formula for ABE has been partially based on performance. As recommended by the LFC, the HED should implement additional well-defined accountability and outcome measures to further help incentivize education programs that successfully enroll and support adult students looking to earn college credentials (data should be disaggregated by income and skill level to see how different student populations fare). Adding performance measures that can better track employment outcomes can also help generate statistics for ROI studies and entice community colleges to collaborate with DWS, WIB, and employers to better assist and advise adult students as they transition into, and successfully remain in, the workforce.

Restore the College Affordability Fund and broaden eligibility requirements. Adult education programs, when they are available, are usually offered free-of-charge but career pathways programs and college credit courses have fees that can be cost-prohibitive to low-income students. WIA funds and private scholarships are sometimes available but many students pay at least half of the fees, which can amount to a few thousand dollars. In addition, the federal financial aid available to students without a high school diploma or equivalent has been scaled back. Looking at the student populations attending community colleges in New Mexico, 65 percent are taking courses part-time since many need to work to pay for living expenses. Of those part-time students, nearly 75 percent are 22 years of age and older and have already been out of high school for a few years.32 These non-traditional students do not qualify for the New Mexico lottery scholarship, which requires students to be no more than one year out of high school and to carry a full course load of 15 credit hours.

New Mexico should improve college affordability for low-income adults by providing state-funded need-based financial aid. Restoring the currently empty College Affordability Fund would provide need-based tuition assistance to those who have been out of school for more than a year and may not qualify for merit scholarships. Eligibility should also be broadened to include degrees and professional certificates from two-year colleges and to allow non-traditional students to take fewer courses at a time to more easily fit school into work schedules.

Provide integrated student support services including child care assistance. Student support services, including child care assistance, are an integral part of effective career pathways. Eligibility for child care assistance should be increased from the current 150 percent of FPL to at least the pre-recession 200 percent of FPL to help all low-income parents. Access to high-quality child care is an effective two-generation solution that provides early childhood education to young children while enabling parents to increase their education and earn marketable credentials. In studies of student parents taking classes at community colleges, researchers found that between 60 percent and 70 percent of respondents were dependent on child care services to continue their education.33 An added benefit of parents increasing their levels of education is that their children do better in school.

Utilize unspent TANF funds. The federally funded TANF block grant is targeted to low-income parents and pregnant women to help them achieve economic self-sufficiency. Other states have effectively used TANF funds to pay for career pathways program components including vocational training, post-secondary education, and child care assistance.34 In the past few years, New Mexico has rolled over tens of millions of dollars of unspent TANF funds that could be used now to help low-income families earn credentials and weather the persistent economic downturn. Data show that about 10 percent of TANF recipients are enrolled in education and/or training in New Mexico (the national average is 9 percent).35 New Mexico should follow the lead of Oklahoma and Georgia, which rank at the top of that category by enrolling more than 30 percent of their TANF recipients in education and training programs.

Integrate with other programs like Education Works, NM Works, SNAP E&T, and JTIP. A well-integrated career pathways framework could synergize with current funding streams and programs that help adults gain workforce skills. Education Works allows TANF-eligible families to focus on increasing their educational attainment while providing them with small stipends to offset some costs. NM Works provides adults access to work-readiness programs and assistance through the state Income Support Division. SNAP E&T (Supplemental Nutrition Assistance Program Education and Training) helps SNAP recipients learn skills and get training, education, or work experience that can lead to employment. The Job Training Incentive Program (JTIP) pays for limited classroom and on-the-job training for new jobs created by expanding or relocating businesses.

Conclusion

New Mexico has one of the highest poverty rates in the nation, along with low levels of educational attainment. Even though most of our low-income families are working, they are unable to achieve economic security and become self-sufficient. Our preponderance of low-skill workers and shortage of middle-skill workers have been detrimental to our state’s economy.

New Mexico’s current approach to adult education for low-skill workers is fragmented, underfunded, and reaches far too few of the adults who would benefit. It also focuses on just teaching basic skills instead of integrating them with occupational skills and promoting access to post-secondary education that can lead to higher wages. The state should reassess and increase its current investments in adult education and look into developing a systems-level career pathways framework that includes bridge programs to give low-skill and low-income adults the opportunity to more rapidly earn industry-recognized credentials and certificates while simultaneously increasing basic literacy and math skills as needed.

Revamping this system would provide a win-win outcome—reliance on social services would be reduced, the state’s economy would grow, we would be more likely to lure businesses here that need a well-educated workforce, and the economic security of these families would be improved, which would, in turn, improve the academic and well-being outcomes of their children.

Endnotes

1 Charting a Path: An Exploration of the Statewide Career Pathway Efforts in Arkansas, Kentucky, Oregon, Washington and Wisconsin, Seattle Jobs Initiative, 2009
2 Improving the Economic Prospects of Low-Income Individuals through Career Pathways Programs: The Innovative Strategies For Increasing Self-Sufficiency Evaluation, Office of Planning, Research and Evaluation (OPRE), 2014
3 Farther, Faster: Six Promising Programs show How Career Pathway Bridges Help Basic Skills Students Earn Credentials That Matter, CLASP, 2011
4 Joint letter on supporting career pathways from the U.S. DOL, DOE, and DHHS (2012); http://wdr.doleta.gov/directives/attach/TEN/ten2_36_11.pdf
5 Working Poor Families Project analysis by the Population Reference Bureau of American Community Survey 2012 data
6 Ibid
7 Ibid
8 Ibid
9 A Well-Educated Workforce is Key to State Prosperity, Economic Policy Institute, 2013
10 New Mexico’s Forgotten Middle-Skill Jobs: Meeting the Demands of a 21st Century Economy, National Skills Coalition, 2010
11 New Mexico Narrative Report from the ABE Division (2012-2013) for a federal annual report; http://www.hed.state.nm.us/uploads/files/ABE/Policies/New%20Mexico%20Narrative%20Report%202012-2013%20MW.pdf
12 National Reporting System for Adult Education in New Mexico (program year 2012-2013), NM HED; http://www.hed.state.nm.us/uploads/files/ABE/Data%20Resources/FY%2012_13%20NRS%20tables.pdf
13 Ibid
14 Presentation of data by the Center for Education Policy Research (CEPR) at the University of New Mexico during a NM I-BEST Consortium meeting (2014)
15 Working Poor Families Project analysis of National Center for Higher Education Management Systems (NCHEMS) 2009 data
16 Working Poor Families Project analysis of IPEDS 2008 cohort data from College Measures
17 New Mexico Narrative Report from the ABE Division (see note 10)
18 Colorado House Bill 1085: Adult Education and Literacy Act of 2014; http://www.leg.state.co.us/Clics/CLICS2014A/csl.nsf/fsbillcont3/5238415C22E65FBA87257C300005BD12?Open&file=1085_enr.pdf
19 “State and Local Opportunity Note” on Colorado’s HB 14-1085, Bell Policy Center, 2014
20 State Legislature Round Up, National Skills Coalition, 2014
21 “National Trends in Adult Basic Education,” a Jobs For the Future presentation to a Texas P-16 Council meeting, 2012; http://www.tea.state.tx.us/index2.aspx?id=4767&menu_id=814#2012_Jan_Meeting
22 Career Pathways Toolkit: Six Key Elements for Success, developed by Social Policy Research Associates on behalf of the U.S. Department of Labor, 2011; http://www.workforceinfodb.org/PDF/CareerPathwaysToolkit2011.pdf
23 Improving the Economic Prospects of Low-income Individuals through Career Pathways Programs, (see note 2)
24 State of New Mexico Higher Education Department Annual Report, 2013; Ibid
25 “I-BEST Fact Sheet,” Washington State Board for Community & Technical Colleges, 2012; http://www.sbctc.ctc.edu/college/abepds/WEB_IBESTone-pager_11.5.12.pdf
26 “I-BEST Cost Benefit Analysis Fact Sheet,” Washington State Board for Community & Technical Colleges, 2013; http://www.sbctc.ctc.edu/college/_e-ibest-resources.aspx
27 College Readiness in New Mexico, NM Legislative Finance Committee, 2014; http://www.nmlegis.gov/lcs/lfc/lfcdocs/perfaudit/Higher%20Education%20Department%20-%20College%20Readiness.pdf
28 The Promise of Career Pathways Systems Change: What Role Should Workforce Investment Systems Play? What Benefits Will Result?, Jobs For the Future, 2012
29 Skills2Compete-New Mexico Platform of Priorities, National Skills Coalition, 2010
30 State Plan for Adult Education and Family Literacy, NM HED, 2006; http://www.hed.state.nm.us/uploads/files/ABE/NMHED%20ABE%20Division%20State%20Plan%202006(1).pdf
31 Creating Pathways for Adult Learners: A Visioning Document for the Illinois Adult Education and Family Literacy Program: Continuing our Work to Meet Adult Learners’ Needs, Illinois Community College Board, 2009; http://www.iccb.org/pdf/adulted/Adult_Education_Strategic_Plan_11-12-09_Final.pdf
32 American Association of Community Colleges data for New Mexico. Retrieved from http://www.aacc.nche.edu/Pages/CCFinderStateResults.aspx?state=NM
33 Improving Child Care Access to Promote Postsecondary Success Among Low-Income Parents, Institute for Women’s Policy Research, 2011
34 Funding Career Pathways and Career Pathway Bridges: A Federal Policy Tool Kit for States, Center for Postsecondary and Economic Success at CLASP, 2010
35 Working Poor Families Project analysis of U.S. Department of Health and Human Services 2011 data

Download this report (Sept. 2014; 20 pages; pdf)
Download the companion PowerPoint (23 slides; pdf)
Link to the press release

The Working Poor Families Project is funded by the Annie E. Casey Foundation, Ford Foundation, Joyce Foundation, and The Kresge Foundation.

New Mexico Public School Funding: Still Well Below Pre-Recession Levels

Download this report (May 2014; 12 pages; pdf)
Link to the press release

by Gerry Bradley, M.A.
Two lawsuits filed in March and April of 2014 against the state Public Education Department are calling into question the sufficiency of public school funding for educating New Mexico’s nearly 340,000 school-age children. From a performance perspective, it is hard to argue that New Mexico has provided the resources necessary for children to thrive, as too many students are not reaching benchmarks in reading and math proficiency. Clearly, the recession made it challenging for legislators to fund our public school system but recent policy choices have exacerbated the problem.

Public school funding in New Mexico rose steadily from 1983 to 2008. But a study1 conducted in 2008 determined that the state was still severely under-funding K-12 education based on requirements in the state constitution. Before this shortfall was addressed, however, the recession sent New Mexico’s revenue plummeting. Rather than replace lost revenue by raising taxes, New Mexico policy makers addressed the revenue crisis by slashing state spending in many areas, including public schools. Like other states, New Mexico was able to temporarily plug some of its budget holes with federal revenues from the 2009 American Recovery and Reinvestment Act (ARRA). The availability of federal ARRA funds in the 2009-10 and 2010-11 school years lessened the overall cuts in New Mexico, as shown in Figure I.

K-12 Figure I

New Mexico’s recovery from the recession has been slow. State revenues began to recover in 2012 and spending on public education was increased. Unfortunately, much of the new revenue was also spent on tax breaks for profitable corporations already doing business in New Mexico. While the stated objective of the cuts was to lure other companies here, there is no evidence that this will be the result. Investing more of that new revenue into the public K-12 school system would have been a smarter economic development decision, as businesses do not need tax breaks in order to operate but they do need an educated workforce.

This report shows that choices regarding taxes and spending have consequences. Specifically, we show that public school funding has not kept pace with inflation and enrollment growth. That is, per-pupil, inflation-adjusted funding for school operations has dropped by more than 14 percent since 2007-08. We must do better for the future of New Mexico’s children and economy.

A Vulnerable Population

There are important reasons New Mexico needs to increase investment in K-12. Our state has one of the highest rates of child poverty in the nation. Almost one-third of our children live at or below the federal poverty line (which is just over $19,000 for a family of three). Children who come from low-income families need more social supports than do children from middle- and upper-income families. Because they often lack opportunities, low-income children are less likely to start kindergarten with the basic skills that are necessary for them to succeed in school.

Low-income students also are at greater risk of falling behind during the summer months. Children from high-income households can afford enriching summer activities—such as attending summer camps, visiting museums, and traveling—which not only stem the learning loss that can occur over the summer, but can actually improve overall academic achievement. Children from low-income households are much more likely to need basic remediation at the start of each school year.

School achievement gaps fall along racial and ethnic lines as well as economic lines as minority children face greater barriers to success than their White counterparts. Almost three-quarters of New Mexico’s children are members of a racial or ethnic minority group. Only one other state—Hawaii—has a lower percentage of White children than does New Mexico. These issues need to be kept at the forefront when state leaders are making public school funding decisions.

The Funding Formula

One strength of New Mexico’s public school finance system is that it is quite centralized, in that most of the funding comes from state rather than local sources. Most states rely heavily on the property tax to pay for the operation of their schools, while New Mexico relies on revenue collected at the state level. Since property tax revenue varies greatly from high-income to low-income neighborhoods, a funding system that relies on the property tax tends to favor schools in well-to-do areas.

New Mexico uses the State Equalization Guarantee (SEG)—commonly referred to as the ‘funding formula’—as the mechanism for distributing funds to its 89 school districts. The SEG is the amount allocated to each district by the state Public Education Department (PED) for each unit value. (Unit value is not comparable to student enrollment because students needing more supports, such as special education, may count as more than one unit.) Only state funding and ‘above-the-line’ expenditures are included in the SEG. ‘Below-the-line’ funding pays for specific programs—such as pre-kindergarten, K-3 Plus, and teacher evaluations, supports, and training—which are not necessarily offered by all school districts and, therefore, are not included in the formula. We will look at all spending later in this report.

The spending as determined by the SEG increased smoothly for almost three decades—from 1983 to 2008—before dropping at the onset of the recession.

The dark green line in Figure II shows the formula from 2000 to 2013 in nominal dollars. The formula hit its peak in 2007-08 before beginning a steady decline. A slight increase is seen in 2012-13, but that is before adjusting for inflation.

The light green line provides a better picture of the current value of the SEG, which peaked at an inflation-adjusted $4,000 (in 2013 dollars) in 2008-09 just after the recession started to crush revenues in 2008-09. As the light green line indicates, after stabilizing in 2010-11 the SEG flattened when adjusted for inflation.

At the same time that the real value of K-12 revenue was decreasing, student enrollment in the state’s public schools was trending upward (Figure III). Not only was the SEG not keeping pace with inflation but, for the past decade, schools have been expected to educate more children without more money. Inevitably, this has resulted in a decline in per-pupil spending for New Mexico’s schools.

K-12 Figure II-III

Funding for School Operations

Broadly speaking, the revenues going into the public school system are broken into four uses: operational, special projects, capital outlay, and debt service. The funding going to each of these classifications varied in different ways during the past six years. For the first and largest classification—operational expenses (shown in Figure IV)—funding rose from $2.56 billion in the 2007-08 school year to $2.63 billion in the 2008-09 school year. The recession took its toll on New Mexico revenues and operational funding dropped to $2.37 billion in 2009-10.

Operational funding began a slow recovery in 2010-11 ($2.44 billion) and 2011-12 ($2.47 billion), reaching $2.54 billion in 2012-13 (the most recent year for which data are available). Operational appropriations, therefore, were still below pre-recession levels as late as 2012-13, both in nominal dollars (shown in the dark blue bars) and when adjusted for inflation (light blue bars).

Figure V shows operational appropriations on a per-pupil, inflation-adjusted basis.

K-12 Figure IV-V

Funding for Special Projects

The special projects category includes a wide array of programs, from school lunches to extra funds for schools in high-poverty neighborhoods. Many of these are federally funded Title I programs. The impact of the federal ARRA revenues is especially clear in this category, since much of the ARRA funding arrived under the Title I category.

Figure VI shows that federal ARRA funding shot up in 2009-10. The intent of the ARRA was to prevent funding from dropping sharply due to the recession, especially for schools in high-poverty areas. Funding for special projects remained at an elevated level in 2010-11 at $691 million, before dropping by $180 million between 2010-11 and 2011-12 to pre-recession levels, then remaining flat into 2012-13.

Figure VII shows special projects revenues on a per-pupil, inflation-adjusted basis.

K-12 Figure VI-VII

The Federal Infusion

Taking operational and special projects funding together—along with the infusion of federal ARRA money—there was still a drop of almost $50 million between 2008-09 and 2009-10. In New Mexico, funding for special projects went up by $213 million or almost 40 percent between 2008-09 and 2009-10. The increase in appropriations for special projects went some distance toward offsetting the drop of $261 million in operational appropriations. Operational funding began its slow ascent between 2009-10 and 2010-11, climbing by about $70 million, then barely budging between 2010-11 and 2011-12, rising by $30 million or just 1.2 percent.

Taken together, operational and special projects revenues were $3.06 billion in 2007-08, $3.2 billion in 2008-09, and $3.08 billion in 2012-13—still lower than the 2009-10 level (see Figure VIII). Figure IX shows operational plus special projects revenues on a per-pupil, inflation-adjusted basis.

K-12 Figure VIII-IX

Funding for School Buildings

The remaining two revenue categories are related to capital outlay—the construction and upkeep of school buildings. Capital outlay money is generally borrowed via the bonding process. Debt service is money needed for payments on borrowing for capital projects. Since capital outlay is not part of the appropriations process, it is not discussed in detail in this report.

The total funding picture (Figure X) is more informative after having looked at appropriations by source. Taken together, appropriations peaked in 2008-09, fell slightly in 2009-10, before rising in 2011-12 and 2012-13. There are no clear trends for capital outlay and debt service, while operational revenues collapsed in 2009-10 and special projects revenues rose to compensate. Again, the increase in special projects was largely due to the infusion of federal ARRA funds through the Title I program.

K-12 Figure X

Funding by Source

Figure XI shows public school funding from a different perspective—that of revenue sources by level of government. This perspective clarifies further the role of federal ARRA funds in stabilizing revenue for the New Mexico public school system.

K-12 Figure XI

The Operating Budget

The discussion so far has looked at public school funding from all sources. The operating budget is made up of just the money that is appropriated by the state Legislature during the annual legislative session. The operating budget includes above-the-line funding as well as below-the-line funding, which pays for programs that are not necessarily offered by all school districts. Below-the-line funding, which has increased in recent years, may be awarded to districts on a grant-application basis or at the discretion of the PED. This goes against the equalization spirit of the SEG.

The operating budget draws from all state funding except for capital outlay and debt service. It supports all operating expenditures, including instruction, social supports (such as school nurses and counselors), food, bus service, and the like.

Figure XII shows that as of 2013-14 New Mexico’s public school operating budget had not reached the 2008-09 level of $2.99 billion in nominal dollars (the dark green bars). The picture is even worse in inflation-adjusted terms (indicated by the light green bars), as the value of the 2013-14 operating budget is only $2.61 billion compared to the pre-recession level of $2.91 billion in 2007-08. In real terms the value of the operating budget had fallen by 10.4 percent between 2007-08 and 2013-14.

Figure XIII shows that on a per-pupil basis—which includes enrollment growth—the public school operating budget had fallen even more—by 14 percent—from its peak in 2008-09 to 2012-13 when adjusted for inflation. Again, even on a nominal basis, per-pupil funding was still below pre-recession levels.

K-12 Figure XII-XIII

Public School Funding in Court

Two lawsuits were filed against New Mexico’s Education Secretary-Designate Hanna Skandera and the state’s Public Education Department in the spring of 2014. In March, a suit was filed in state district court on behalf of parents and students by the New Mexico Center on Law and Poverty and the Rosebrough Law Firm. The suit alleges that the state has failed to provide “a uniform system of free public schools for the sufficient education of all the children of school age as mandated by the New Mexico State Constitution.”2

The suit also alleges that the funding formula fails to provide the additional resources needed for children living in poverty and English language learners, and that recent increases in “below-the-line” funding are in violation of the uniformity requirement of the educational mandate in the state constitution.

The second lawsuit was filed in April by MALDEF (Mexican American Legal Defense and Educational Fund) on behalf of parents and students in northern New Mexico.3 Although there is some overlap—the MALDEF suit reiterates the funding shortfalls for low-income students and English language learners—this suit also alleges that “unfair and non-transparent school accountability grading and teacher evaluation systems”4 deny New Mexico children their constitutional right to “access the educational opportunities they need to succeed in the classroom.”5 The MALDEF suit also calls upon the state to support and fully implement the Indian Education Act, the Hispanic Education Act, and the Bilingual Multicultural Education Act, and alleges that the state has failed to expand pre-kindergarten to ensure access to all at-risk children.

While the lawsuits are a positive development in the fight for sufficient funding for public education, it may take several years for both suits to work their way through the system.

Policy Recommendations

New Mexico should provide sufficient funding for public education as mandated in the state constitution without parents, students, and others having to file lawsuits. The court process can be lengthy and New Mexico’s most vulnerable children need adequate support now if they are to have the best shot at a successful future. The purposes of the lawsuits align with our policy recommendations:

  • Per-pupil, inflation-adjusted spending needs to not only be restored to pre-recession levels, it needs to be increased as indicated in the 2008 study. If necessary, the needed revenue should be raised by increasing taxes on New Mexico’s highest-earning households or by closing tax loopholes for profitable businesses.
  • The funding formula should be revised so that more resources are invested in the school districts that need them most due to high levels of child poverty and the prevalence of English language learners.
  • The Indian Education Act, the Hispanic Education Act, and the Bilingual Multicultural Education Act should be supported and fully implemented.
  • Fewer resources (money and valuable teaching time) should be spent on standardized testing.
  • Voluntary pre-kindergarten should be funded to allow enrollment of all 4-year-olds (with the funding split between PED and the Children, Youth and Families Department as stipulated in the Act), and policy-makers should look at the data on the efficacy of a full-day program.
  • Funding for high-quality child care and parental education programs should be increased. These programs help children develop the skills needed to succeed when they enter kindergarten and help parents be more engaged in their children’s education. As with pre-K, such programs also are an excellent investment as they save significant amounts of money down the line, starting with the reduced need for remedial and special education services in K-12 classrooms. A larger investment in early childhood would better leverage our much greater investment in K-12, as fewer children would start school behind.

Conclusion

The Great Recession severely hindered New Mexico’s ability to provide sufficient funding for public K-12 education. The recession-caused loss of revenue was overcome to some extent by a short-term infusion of federal funding through the American Recovery and Reinvestment Act of 2009. New Mexico lawmakers did not seek other means of raising revenue to fill this gap, and so on a per-pupil, inflation-adjusted basis, the public school operating budget is still 14 percent below what it was before the recession began. While spending has increased as state revenues have begun to recover, much of the new revenue has been given away in corporate tax cuts for which there is no accountability.

This funding gap has meant that the state has not been meeting the needs of New Mexico’s children, especially those children from low-income families, the majority of whom are racial or ethnic minorities. Clearly, state leaders need to restore and increase funding in our school system and for programs that provide children from low-income families with the opportunities that will help lessen the achievement gap. These investments need to go beyond per-pupil, K-12 spending and start long before children enter kindergarten. It remains to be seen whether the recently filed lawsuits will have to be pursued through the system in order for funding levels to be increased.

Endnotes

1. “An Independent Comprehensive Study of the New Mexico Public School Funding Formula,” American Institute for Research, 2008
2. http://nmpovertylaw.org/WP-nmclp/wordpress/WP-nmclp/wordpress/wp-content/uploads/2014/03/Complaint-Stamped-2014-19-3.pdf
3. http://www.maldef.org/assets/pdf/MartinezvNewMexico_Complaint_04114.pdf
4. “MALDEF Challenges New Mexico’s Denial of the Fundamental Right to Education in Most Comprehensive Educational Opportunity Lawsuit Yet Filed,” MALDEF news release, April 1, 2014, https://maldef.org/news/releases/maldef_challenges_nm_denial_of_education/
5. Ibid

Download this report (May 2014; 12 pages; pdf)
Link to the press release

 

The Fiscal Policy Project, a program of New Mexico Voices for Children, is made possible by grants from the Annie E. Casey Foundation, the McCune Charitable Foundation, and the W.K. Kellogg Foundation.