State Fund’s $ 35 Million PED Request Approved »Albuquerque Journal

Secretary of Education Ryan Stewart

Copyright © 2021 Albuquerque Journal

The state’s Department of Public Education on Tuesday obtained approval to transfer $ 35 million from a state reserve fund to close an unexpected budget gap created when the US Department of Education condemned state for missing a deadline to take credit for federal impact aid.

DEP Secretary Ryan Stewart criticized the Education Department‘s decision on Tuesday in a statement, but said the state had decided not to appeal. He told the Journal last week that the “silver lining” was the fact that the $ 35 million would go directly to school districts in New Mexico.

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“It’s not a dollar less for New Mexico students because of this. It’s not a loss to the state in the end result of this, ”Stewart told the Journal last week. There were no federal dollars at stake. The money that now has to come from state government coffers will end up helping some school districts.

The main beneficiaries will be the Gallup and Zuni school districts, said Adán Delgado, deputy secretary of finance and operations of the PED, who presented the transfer request to the state’s finance council on Tuesday.

Since 1975, the state has adjusted its annual appropriations to school districts through a now controversial funding formula that took into account the amount of federal impact assistance districts received.

The aid is designed to help local districts that lose property tax revenue each year due to tax-exempt federal property within their boundaries.

But the federal government has allowed exceptions for states that have proven they have equalized education spending.

New Mexico had applied for the credit annually, which reduced the state’s contribution to some school districts that received federal aid. But in April, the DEP learned that its application, sent more than a year earlier, had been received three days after the prescribed deadline.

By that time, state appropriations to local school districts had already been budgeted to reflect the initial decision last December from the federal office of impact assistance approving New Mexico’s request.

In revoking the earlier approval, the director of the federal agency apologized, saying the missed deadline of March 2020 was only revealed this year.

In a statement Tuesday, Stewart said the federal “flip-flop” was “completely unprofessional and a major mistake.”

But he told the Journal last week that he took responsibility “not to have systems in place” to make sure New Mexico doesn’t miss the deadline.

Delgado told the Finance Council, which unanimously approved the request, that DEP officials felt the deadline had been lifted because the state had submitted a revised request.

A legal analysis of the DEP showed New Mexico would likely lose if it appealed.

A call was not “a good use of our time or resources,” said Stewart.

The result means the state will accelerate its plan, approved by the legislature this year, to completely eliminate the federal construction impact tax credit from its school budgets.

Governor Michelle Lujan Grisham signed the law in April, saying the long-standing practice was “fundamentally unfair, putting too many Native American students and communities at a disadvantage.” The change would give some school districts access to more than $ 60 million, the governor’s office said at the time.

“Indeed, the work we did to end the Impact Aid Credit during the last legislative session will indeed take place immediately,” Stewart said in the statement on Tuesday.

The $ 35 million transfer will leave about $ 4 million in the state support reserve fund, Delgado said.

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