Superintendent in Santa Fe seeks support for SB 170

SANTA FE - The ongoing effort to create an adequate education for children across New Mexico has new support in the form of Senate Bill 170, which was introduced during the first session of the 54th Legislature and sponsored by Sen. George Munoz, D-Gallup, and Sen. Clemente Sanchez, D-Grants.

SB 170 aims to keep the state from taking state funding away from school districts that receive federal Impact Aid. The state calculates 75 percent of the amount of Impact Aid a district receives and subtracts that amount from state funding.

The money removed from state funding is then re-allocated by the state to other districts. Supporters of SB 170 argue that the current legislation allows the state to favor urban districts, since most of the Impact Aid recipients are smaller rural districts.

As of March 7, SB 170 is awaiting action in the Senate Finance Committee, and was reported with a “Do Pass” recommendation. A hearing, on the bill, has yet to be scheduled.

Jvanna Hanks, assistant superintendent of business services for Gallup-McKinley County Schools, said that she and other members of the school board have been speaking to legislators in Santa Fe in hopes of getting SB 170 scheduled for a hearing.

She added that many legislators and other elected officials are aware of the challenges rural school districts face. “Everyone we talk to [in Santa Fe] knows there’s a problem,” Hanks said in a phone call March 7. “They may not agree with the proposed solution, but they know there’s a problem.”

Hanks said that she thinks they have substantial momentum to get SB 170 heard, and there are enough people on board to help find a viable solution.

THE PROBLEM AT WORK

School districts across the state have a designated State Equalization Guarantee.  This is the amount of money distributed to each school district by the state to ensure its operating revenue is at least equal to the district’s program cost.

The state calculated that GMCS needed about $85 million to run efficiently in fiscal year 2018.

Existing legislation allows the state to calculate 75 percent of Impact Aid, about $22 million in Gallup’s case, and re-allocate it to other districts from the SEG funding designated for Gallup.

Hence, Gallup receives about $63 million in state funding and has to make up the difference with Impact Aid. A fiscal impact report attached to SB 170 states that Gallup received $29 million in Impact Aid in fiscal year 2018.

If the bill is passed into law, school districts that qualify for Impact Aid would receive all of the funds instead of just a fraction, since the state would be unable to take it from the SEG fund.

Charles Long, GMCS Board of Education president, said that keeping all of the Impact Aid would be a great asset for the district.

“Keeping our $20 million of Impact Aid would be a game changer for our students and our county,” Long said in a written statement March 7. “It would help us build better schools and facilities, fix our schools and provide better equipment and technology”

LACK OF TAXES

School districts in larger cities such as Albuquerque receive property tax support from residents and businesses to build and maintain facilities and tend to infrastructure and technology needs, as well as raise funds for future projects.

Districts in rural areas such as Zuni and Gallup, on the other hand, do not receive as much tax support because their schools exist mostly on federal land. So smaller districts rely more on Impact Aid than urban districts.

Mike Hyatt, superintendent for Gallup-McKinley County Schools, said about 20 percent of the land around GMCS is taxable. The lack of property taxes means that GMCS has to carefully allocate its operational funds to make up the difference and generate revenue.

Hyatt said this is a huge inequity. “This formula is the state robbing from poverty-stricken areas to pay the rich districts,” Hyatt said in a phone call Feb. 18.

Hyatt’s comments about the state’s bias toward richer school districts were echoed by Long, who said, “Our rural school district has been neglected by our state for decades, and we hope legislators will solve this issue outside of the courtroom.”

Hanks said most people can easily see what the problem is, and the most obvious symptom of inadequate funding for rural districts in Gallup and Zuni, are apparent in looking at the athletic facilities.

“[Zuni and Gallup] can’t afford to build new facilities,” she said. “When we don’t have those sufficient facilities to provide the necessary school services, that is damage is being done by the way Impact Aid is being handled.”

According to a fiscal impact report attached to SB 170, New Mexico districts that applied for Impact Aid in fiscal year 2018 received about $78.2 million with the state taking about $58.7 million to re-allocate as they determined.

A DECADES LONG ISSUE

Hyatt said the history of this aid goes back to the 1970s, when a property tax was introduced.

At that time, New Mexico schools generated a mill levy of roughly $8.92 for every $1,000 of taxable property the school was on, because every property owner in the county was pitching in.

But there was a shift in the 1980s, when the property tax was largely replaced by Impact Aid. The amount of property tax New Mexico schools were pulling in took a sharp decline to $0.50 for every $1,000 of taxable property, for a 94 percent decrease.

“This was the state taking advantage of the [rural] counties back then, because they didn’t have the political clout to stop it,” Hyatt said. Gallup and other rural schools have minimal, insufficient buildings to house students, as a result of the laws that were put in place decades ago, Hyatt added.

This was challenged in a 1998 lawsuit filed by Zuni, Gallup-McKinley, and Grants-Cibola county schools, where a district court ruled the capital funding system was unconstitutional.

Despite the lawsuit ruling and higher Impact Aid amounts, rural schools still lag behind schools in cities like Albuquerque. Hyatt said the way the state is handling the Impact Aid funds is complicating the issue. “We have to fight for every dollar we can get,” he said. “It’s ridiculous that the state is relying on students to pick up taxes.”

Hanks said while the rural school districts have tried for several years to get this issue heard in the state legislature, this is the first time that they have made a concentrated effort to focus on the issues that exist with Impact Aid. She added that they are taking this opportunity to educate many legislators on the issue and its history.

“The push behind why we are getting legislation to change is we hear often from new and returning legislators that they didn’t know about this issue. We want to make sure they know the intimate details of what is happening. Then they know the reality of what’s really happening, so we hope they make an informed decision,” Hanks said.

Long said, “The transformation of Indian Education currently rests in the hands of Senate Finance.” He hopes the legislature takes advantage of the opportunity before them.

For updates on SB 170, visit: nmlegis.gov

By Cody Begaye
Sun Correspondent

MCKINLEY COUNTY – New Mexico State Police investigated a fatal crash involving a pedestrian on New Mexico State Road 118, near mile post 27 east of Gallup, early Tuesday evening.

The initial investigation indicated that a 2003 Dodge van driven by Frank Adrian Jiron, 39, of Albuquerque was traveling west on SR 118.  For unknown reasons, Tommy Mariano, 85, of Crownpoint was walking in the roadway. The Dodge van struck Mariano, who sustained fatal injuries and was pronounced deceased at the scene.

During the investigation, officers determined that Jiron exhibited signs of being under the influence of an "intoxicating substance," according to a State Police news release. He was subsequently arrested for DWI and booked into the McKinley County Detention Center.

This case is still under investigation, with no additional information currently available. 

Higher minimum wage fears: inflation, loss of jobs

Legislators in Santa Fe continue to march House Bill 31 forward, but it features a hotly contested phased-in minimum wage increase for workers across the state, which has come under fire from some business owners who fear their only choice to deal with the increases, if the bill gets signed into law, will be to lay off employes and pass off costs to customers.

House Bill 31 was introduced by Rep. Miguel P. Garcia, D-Albuquerque, and Rep. Joanne J. Ferrary, D-Las Cruces, as an act relating to labor that would increase the minimum wage across New Mexico in phases.

HB 31 states that an employer shall pay an employee the minimum wage rate of $10 an hour. This rate would rise after July 2020 to $11 an hour, and then it would rise again after July 2021 to a minimum of $12 an hour.

This wage increase accompanies an increase in the cost of living index, as noted within the bill, which would be measured by the percentage increase of the cost of living in August of the current year against the August of the preceding year.

However, this increase will lead to the removal of the minimum wage exception for tipped employees, such as restaurant servers, and provide for an annual cost-of-living increase in the New Mexico minimum wage rate beginning in 2022.

Gallup-McKinley Chamber of Commerce CEO Bill Lee spoke with the Sun Feb. 15 about the impact this bill could have on the state and the county, and why they are fighting against HB 31.

By Feb. 14, HB 31 had passed the state House of Representatives by a vote of 44-26 and was sent to the Senate Public Affairs Committee, where it is awaiting approval as of Feb. 20.

The bill was first introduced on Dec. 18 during the legislature’s prefile period.

Lee said that an increase for minimum wage across the state has been debated and brought up in several bills this year, but they have a specific reason for speaking out against HB 31.

“We are not opposed to a wage increase, but we want it to be done responsibly,” Lee said.

Lee then spoke about the timeline that would unfold if HB 31 is passed into law.

The bill, if signed by the governor, would go into effect in July, meaning this is when employers would have to implement the pay raise.

However, what may sound good for employees will be bad for the employers, Lee explained.

“This is bad for businesses because they set a budget at the start of the year,” he said. “The pay raise could lead to layoffs or reduced hours for employees.”

Lee said he feels implementing a pay raise based on cost of living in uncertain economic times is fiscally irresponsible.

When discussing what businesses will feel the biggest impact from the bill, Lee said restaurant servers would experience the most drastic changes.

A server can make anywhere from $25-30 an hour, including tips. HB 31 would eradicate the tipped wages of servers.

Lee said restaurants could start adding on a service charge to the customers’ tab as opposed to letting them leave a tip for their server.

Servers and businesses are against this change, Lee said, reiterating that this would also lead to fewer jobs and hours for employees.

Lee provided statistics from a survey of the Gallup business community Feb. 14, which asked how they felt about the wage issue. The survey was conducted Jan. 22 to Jan. 29.

Fifty-seven percent of the parties surveyed suggested a minimum wage increase to $10-12 an hour. 71 percent oppose any automatic increases of minimum wage. 76 percent oppose removing tips from servers’ wages. And 62 percent of business owners would either have to freeze hiring or eliminate jobs to adjust to the wage increases.

Marie Chioda, owner and manager of The Rocket Cafe, said that if HB 31 becomes law, it would negatively impact the restaurants and other businesses in town.

“Phasing out tips doesn’t work for the employer or the employee,” she said in a Feb. 15 phone call. “We can’t implement it in just six months [because we set our budget].”

Chioda said this move is upsetting for employees who rely on tips, adding their hourly earnings could go from over $20 to just around $10-12.

“They’re never going to make it,” Chioda said.

Chioda said a drastic change in wages for employees would lead to a rise in service prices in restaurants and could even alter owners’ business models across Gallup.

“You could go from paying around $10 for a burger to around $15,” she said, as an example.

Letting workers go means that those who remain will have to work harder for ultimately lower pay, Chioda said.

“This is going to affect everybody,” she said. “[The state] has to be more reasonable with this.”

A BETTER BILL?

Lee said that there is an opportunity for the state to make a wiser choice regarding a state-mandated minimum wage increase, which comes in the form of Senate Bill 437, which was introduced in the legislature session by Sen. Clemente Sanchez, D-Grants.

The bill was sent to the Senate Public Affairs Committee on Jan. 31, but no action has been taken on it as of Feb. 20.

SB 437 also relates to labor, and discusses an increase for minimum wage, but this increase would be implemented at a different rate, Lee said.

Under SB 437, the minimum wage across the state would rise to $9.50 an hour by April 2020, and then up to $10 an hour by the end of 2020.

Lee said that SB 437 provides a better timeline of pay raises with an increase not tied to the cost of living, and it allows servers to keep their tips.

In addition, SB 437 would create a training wage for student workers, which could bolster their chances of getting into the workforce while earning around $8.50 an hour.

The minimum wage in New Mexico, as of Feb. 2019, is $7.50. The increase from SB 437 would be around $2.50, which Lee said is a more sensible approach.

“The legislature has to look at cost of living in New Mexico, not just the national average,” Lee said. “This all sounds good until you look at the economics.”

Lee estimated that a business with a number of minimum wage employees would have to eliminate around six positions to accommodate the wage increase, and that number would then be multiplied by the number of businesses across Gallup.

“At $10 an hour, we can still make businesses work and run,” he said. “This will let employers keep their employees. Higher wages means prices have to go up, and there is a place where it will break down.”

The New Mexico Senate Public Affairs Committee is holding a hearing on HB 31 and SB 437 at the New Mexico State Capitol at 2 pm Feb. 23.

GALLUP-MCKINLEY Chamber of Commerce Membership Survey

57.1% suggest a $10.00-$12.00 minimum wage increase

(33.3% @ $10.00 and 23.8% @ $12.00)

71.4% Oppose any automatic increase

76.1% Oppose removing exemption for tipped employees

61.8% Would either freeze hiring or eliminate jobs to adjust to wage increases.

(19% would freeze hiring – 42.8% would be forced to make tough decisions and eliminate jobs)

10.3% of Chamber members participated in poll in January. Over 10% means a confidence level that typically represents 90-95% of the surveyed group. – Bill Lee

By Cody Begaye
Sun Correspondent