Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Ezzell/Townsend/Block/Scott/Sanchez
LAST UPDATED
ORIGINAL DATE 2/16/2025
SHORT TITLE NMMI in Capital Outlay Act
BILL
NUMBER Senate Bill 280
ANALYST Carswell
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected
See Fiscal Implications Recurring
Public School Capital
Outlay Fund
Parentheses ( ) indicate a negative impact on the fund.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
PSFA No fiscal impact
Indeterminate
but minimal
Indeterminate
but minimal
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
Public School Facilities Authority (PSFA)
Higher Education Department (HED)
SUMMARY
Synopsis of Senate Bill 280
Senate Bill 280 (SB280) amends the definition of “constitutional special schools” in the Public
School Capital Outlay Act to include the New Mexico Military Institute (NMMI), making it
eligible for funding for public school capital outlay funding.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
SB280 would NMMI eligible for funding for school improvement and replacement projects
through the Public School Capital Outlay Council (PSCOC). If the bill is enacted, the council
and the agency that staffs it, the Public School Facilities Authority (PSFA), would have to Senate Bill 280 – Page 2
develop a methodology for applying statewide school facility adequacy standards to NMMI, for
determining the institutional match required for projects, and for determining which NMMI
facilities would be eligible for funding. Additionally, PSFA would have to assess the condition
of all eligible facilities at NMMI to incorporate the school into PSCOC’s ranking system. The
ranking system is based on school facility conditions and determines eligibility for funding.
Currently, the constitutional special schools that are eligible for PSCOC funding—the New
Mexico School for the Deaf and the New Mexico School for the Blind and Visually Impaired—
are required to provide a 50 percent match for projects related to educational adequacy and a 100
percent match for support spaces. Those special schools typically receive their match from the
Higher Education Department’s capital outlay process because they are not able to issue bonds
and collect property tax revenue like public school districts. NMMI could be expected to, at a
minimum, provide the same match as the other special schools. It is also possible the council
would assign a higher match to NMMI because the school has access to resources the other
special schools do not. NMMI charges tuition and receives a higher percentage of annual land
grant permanent fund distributions—2.36 percent compared to the 1.35 percent that goes to the
other special schools.
Given the uncertainties associated with NMMI’s incorporation into the public school capital
outlay system, this fiscal analysis assumes the school would seek funding on par with what it has
recently sought through the higher education capital outlay process and that it would be subject
to a 50 percent match. Over the last three years, NMMI has on average requested roughly $6
million in capital outlay through the Higher Education Department. This analysis, thus, assumes
additional expenses to the public school capital outlay fund in the near term at half that amount.
The ultimate impact to the public school capital outlay fund would vary year to year based on the
magnitude of projects NMMI might pursue before the council. Some years, there would likely be
no impact as most districts and the special schools do not pursue projects, or are not eligible,
every year. It would also be affected by the level of institutional match required and any limits
the council might put on project eligibility.
SIGNIFICANT ISSUES
The Public School Capital Outlay Act and the standards-based approach to determining state
support for public school construction and improvement represent the state’s response to the
1999 Zuni lawsuit. The lawsuit produced a court ruling that found the practice of locally funded
school construction was unfair to property-poor districts and violated the state constitution.
The lawsuit led to the creation of the Public School Capital Outlay Council (PSCOC), the goal of
which was to create a uniform and sufficient approach to facilities funding for public schools.
Adequacy standards adopted by PSCOC set minimum requirements for public schools, including
building condition, classroom and specialty space, food service, student health, and more. The
standards are used to measure existing schools to determine building condition and deficiencies
and to prioritize school replacement and improvement. PSCOC funds projects to replace systems
within existing schools to extend the life of those facilities and replacement of schools that
cannot be reasonably improved to meet adequacy standards. All school facilities are ranked
annually according to their condition and adherence to adequacy standards. A school’s rank on
this list determines eligibility for PSCOC funding. Additionally, the PSCOC uses a state-local
match formula to determine the state versus the district’s responsibility for project costs. Senate Bill 280 – Page 3
PSCOC only funds public prekindergarten through 12
th
grade facilities. NMMI operates a junior
college in addition to a secondary school. If HB280 were enacted, NMMI’s eligibility for
PSCOC funding would likely be limited to its high school educational spaces as the Public
School Capital Outlay Act does not provide the council with authority to support higher
education projects. NMMI also operates a charter school for 7
th
and 8
th
grades that is neither
state- nor district-authorized. The act only covers authorized charters.
PSFA and PSCOC currently apply the “special purpose schools educational facility adequacy
standards” to projects at the School for the Deaf and School for the Blind and Visually Impaired.
These standards differ from the statewide adequacy standards for conventional public schools
and consider the specific requirements for the student populations with disabilities. NMMI does
not currently follow either the statewide or special purpose adequacy standards, and it is unclear
whether projects it may pursue in the future before PSCOC could adhere to the conventional
adequacy standards or whether PSFA would have to develop adequacy standards particular to
NMMI, given its unique mission and the historic nature of its campus.
PSFA notes it does not currently have any data on NMMI’s facilities. If SB280 is enacted, PSFA
would need to assess the campus in its entirety, collecting data on each building and building
system to calculate their condition and incorporate the school into the statewide ranking system.
PSFA further states:
The Public School Capital Outlay Act was enacted to establish and ensure the equitable
funding for capital (projects) for New Mexico school districts. However, the objectives of
(the act) and NMMI may not align, as New Mexico school districts are constitutionally
obligated to provide free education to all school-age children in the state. In contrast,
NMMI has an admissions process and charges tuition …, despite providing a significant
number of scholarships to its cadets.
CC/hj/hg/sgs