N.M. Stat. § 22-8-25 (2026)

amount.
   A. To determine the amount of the state equalization guarantee distribution, the
department shall:

       (1)    calculate the number of program units to which each school district or
charter school is entitled using an average of the MEM on the second and third
reporting dates of the prior year; or

      (2)    calculate the number of program units to which a school district or charter
school operating under an approved year-round school calendar is entitled using an
average of the MEM on appropriate dates established by the department; or

      (3)     calculate the number of program units to which a school district or charter
school with a MEM of two hundred or less is entitled by using an average of the MEM
on the second and third reporting dates of the prior year or the MEM on the first
reporting date of the current year, whichever is greater; provided that the calculation of
program units using the MEM on the first reporting date of the current school year shall
exclude enrollment growth program units;

       (4)    using the results of the calculations in Paragraph (1), (2) or (3) of this
subsection and the staffing cost multiplier from the October report of the prior school
year, establish a total program cost of the school district or charter school;

         (5)    deduct the total amount of guaranteed energy savings contract payments
that the department determines will be made to the school district from the public school
utility conservation fund during the fiscal year for which the state equalization guarantee
distribution is being computed; and

      (6)    deduct ninety percent of the amount certified for the school district by the
department pursuant to the Energy Efficiency and Renewable Energy Bonding Act
[Chapter 6, Article 21D NMSA 1978].

    B. Reduction of a school district's state equalization guarantee distribution shall
cease when the school district's cumulative reductions equal its proportional share of
the cumulative debt service payments necessary to service the bonds issued pursuant
to the Energy Efficiency and Renewable Energy Bonding Act [Chapter 6, Article 21D
NMSA 1978].

    C. The amount of the state equalization guarantee distribution to which a school
district is entitled is the balance remaining after the deductions made in Paragraphs (5)
and (6) of Subsection A of this section.

   D. The amount of the state equalization guarantee distribution to which a state-
chartered charter school is entitled is the difference between the state-chartered charter
school's program cost and the two percent withheld by the department for administrative
services.

    E. The state equalization guarantee distribution shall be distributed prior to June 30
of each fiscal year. In the event that a school district or charter school has received
more state equalization guarantee funds than its entitlement, a refund shall be made by
the school district or charter school to the state general fund.

History: 1953 Comp., § 77-6-19, enacted by Laws 1969, ch. 180, § 19; 1971, ch. 263, §
9; 1972, ch. 90, § 1; reenacted by Laws 1974, ch. 8, § 16; 1975, ch. 119, § 3; 1979, ch.
268, § 2; 1979, ch. 278, § 1; reenacted by Laws 1981, ch. 176, §§ 3, 4, 5; 1986, ch. 32,
§ 20; 1986, ch. 33, § 16; 1988, ch. 63, § 1; 1988, ch. 64, § 29; 1989, ch. 258, § 1; 1990,
ch. 94, § 3; 1993, ch. 226, § 23; 1993, ch. 231, § 14; 1997, ch. 40, § 8; 1999, ch. 275, §
1; 2002, ch. 63, § 1; 2005, ch. 176, § 12; 2005, ch. 291, § 1; 2006, ch. 94, § 16; 2010,
ch. 116, § 6; 2017, ch. 78, § 1; 2018, ch. 55, § 6; 2021, ch. 52, § 5.
                                      ANNOTATIONS

Repeals. — Laws 2006, ch. 94, § 60 repealed Laws 2005, ch. 176, § 12, effective July
1, 2007.

Cross references. — For state-support reserve fund, see 22-8-31 NMSA 1978.

For PL 874 funds, see 20 USCS § 7701 et seq.

The 2021 amendment, effective July 1, 2021, eliminated local and federal credits when
determining the state equalization guarantee distribution; after "distribution", deleted
"definitions"; deleted Subsections A through C and redesignated former Subsections D
through F as Subsections A through C, respectively; in Subsection A, Paragraph A(3),
after "prior year or the", deleted "fortieth day" and added "MEM on the first reporting
date", after "whichever is greater", deleted "and" and added "provided that the
calculation of program units using the MEM on the first reporting date of the current
school year shall exclude enrollment growth program units", deleted former Paragraphs
(5) and (6) and redesignated former Paragraphs (7) and (8) as Paragraph A(5) and
A(6), respectively; in Subsection C, after "Paragraphs", changed "(6) through (8)" to "(5)
and (6)"; added new Subsection D and redesignated former Subsection G as
Subsection E; and in Subsection E, after "fiscal year", deleted "The calculation shall be
based on the local and federal revenues specified in this section received from June 1
of the previous fiscal year through May 31 of the fiscal year for which the state
equalization guarantee distribution is being computed".

The 2018 amendment, effective July 1, 2018, revised the formula for determining the
amount of the state equalization guarantee distribution; and in Paragraph D(4), after
"this subsection and the", deleted "instructional staff training and experience index" and
added "staffing cost multiplier".

Temporary provisions. — Laws 2018, ch. 55, § 7 provided that:

A.     Using funds appropriated by the legislature for fiscal years 2020 through 2022,
the public education department shall supplement a school district's or charter school's
calculated program cost in each of those fiscal years:

(1)     if, for the fiscal year, the school district's or charter school's calculated program
cost is less than its final program cost in the previous fiscal year, not considering any
supplement the school district or charter school receives under this subsection; and

(2)    as follows:

(a)     for fiscal year 2020, in an amount equal to one hundred percent of the reduction
attributable to the implementation of this act or the difference between the calculated
program cost and the final program cost in the previous fiscal year, whichever is less;
(b)     for fiscal year 2021, in an amount equal to seventy-five percent of the reduction
attributable to the implementation of this act or the difference between the calculated
program cost and the final program cost in the previous fiscal year, whichever is less;
and

(c)     for fiscal year 2022, in an amount equal to fifty percent of the reduction
attributable to the implementation of this act or the difference between the calculated
program cost and the final program cost in the previous fiscal year, whichever is less;
but

(3)    if, in a fiscal year, the appropriation for the purpose of implementing this
subsection is insufficient to supplement school districts and charter schools in
accordance with Paragraphs (1) and (2) of this subsection, then in an amount equal to
the school district's or charter school's prorated share of the total appropriation.

B.     On or before February 1 of 2020 through 2022, the public education department
shall submit a report to the legislative education study committee and the legislative
finance committee that states, regarding the current fiscal year:

(1)   the sum needed to supplement school districts and charter schools in
accordance with this section;

(2)    a list of the school districts and charter schools eligible to receive a supplement
in accordance with this section; and

(3)    the supplement amount of each of those school districts and charter schools.

The 2017 amendment, effective June 16, 2017, required the public education
department to take credit for certain state-chartered charter schools’ impact aid receipts;
in Subsection C, in the introductory clause, after the first occurrence of "school district",
added "or state-chartered charter school"; and in Subsection D, Paragraph D(5), after
"school districts", added "and state-chartered charter schools".

The 2010 amendment, effective May 19, 2010, in Subsection D(1), after "average of
the MEM on the", deleted "eightieth and one-hundred twentieth days" and added
"second and third reporting dates"; and in Subsection D(3), after "average of the MEM
on the", deleted "eightieth and one-hundred twentieth days" and added "second and
third reporting dates".

Temporary provisions. — Laws 2010, ch. 116, § 9 provided that references in the
Public School Code pertaining to the fortieth-day or forty-day report of public school
membership or enrollment shall be deemed to be references to the first reporting date,
which is the second Wednesday in October; references pertaining to the eightieth-day
or eighty-day report of public school membership or enrollment shall be deemed to be
references to the second reporting date, which is the second Wednesday in December;
and references pertaining to the one-hundred twentieth-day or one-hundred twenty-day
report of public school membership or enrollment shall be deemed to be references to
the third reporting date, which is the second Wednesday in February.

As the public schools transition from former reporting dates to new reporting dates, the
public education department may use any combination of former and new reporting
dates as necessary to develop membership and cost projections and budgets for the
2010-2011 school year.

The 2006 amendment, effective July 1, 2007, provided for the state equalization
guarantee distribution for state-chartered charter schools in Subsection A; added
charter schools in Paragraphs (1) through (5) of Subsection D and in Subsection G and
deleted condition that required the enactment of House Bill 32 or similar legislation of
the first session of the forty-seventh legislature in Paragraph (8) of Subsection D and in
Subsection E.

The 2005 amendments, effective July 1, 2005, deleted the former provision of
Subsection B which provided that the school district shall budget and expend twenty
percent of the total revenue receipts for capital outlay; deleted the former provision of
Subsection C(1) which provided that the school district shall budget and expend twenty
percent of the total forest reserve receipts for capital outlay; deleted the former provision
of Subsection C(2) that the school district shall budget and expend twenty percent of the
grant receipts for capital outlay; deleted the former provision in Subsection D(3) that the
number of program units be calculated using the average MEM on the fortieth day of the
prior year; added Subsection D(8) to provide that to determine the amount of the state
equalization guarantee distribution, the department shall deduct ninety percent of the
amount certified for the school district by the department pursuant to the Energy
Efficiency and Renewal Energy Bonding Act, if the act becomes law pursuant to House
Bill 32 of similar legislation of the first session of the forty-seventh legislature; and
added Subsection E to provide that reduction of a district's state equalization guarantee
distribution shall cease when the district's cumulative reductions equal its proportional
share of cumulative debt service payments to service the bonds issued pursuant to the
Efficiency and Renewal Energy Bonding Act, if the act became law pursuant to House
Bill 32 or similar legislation of the first session of the forty-seventh legislature; and
changed "state superintendent" and "state board" to "department".

The 2002 amendment, effective July 1, 2002, deleted "as defined in the manual of
accounting and budgeting provided in Section 22-8-5 NMSA 1978" at the end of
Subsections B, C(1), and C(2); in Subsection D, deleted provisions for calculating
program units effective between July 1, 1999 and July 1, 2000 in Paragraph (1),
substituted "an average of the MEM on appropriate dates" for "the basic program
membership on an appropriate date" in Paragraph (2); and, in Paragraph (3),
substituted "an average of the MEM on the fortieth, eightieth and one hundred twentieth
days of the prior year or the fortieth day of the current year" for "the basic program
membership on the fortieth day of either the prior or the current year", and deleted a
proviso relating to special education program units.
The 1999 amendment, effective June 18, 1999, rewrote the section, changing the
percentage of local revenue credit calculated in the state equalization guarantee
distribution from ninety-five percent to seventy-five percent, and requiring the use of
prior year average enrollment counts on certain days for the calculation of program units
for distribution of the state equalization funds.

The 1997 amendment, effective July 1, 1997, in Subsection D, substituted "basic
program membership of the fortieth day for all programs; provided that special
education program units shall be calculated using the membership in special education
programs on December 1" for "membership of the fortieth day of the school year, except
for school districts with a MEM of 200 or less where the number of program units shall
be calculated on the fortieth day membership of either the prior year or the current year,
whichever is greater, for all programs except special education, which shall be
calculated by using the membership on December 1 of the school year" in Paragraph
(1); inserted "basic program" in Paragraph (2); added Paragraph (3) and redesignated
the remaining paragraphs accordingly; inserted "distribution is being computed" in
Subsection G; and made stylistic changes throughout the section.

The 1993 amendment, effective June 18, 1993, added Paragraph (6) in Subsection D;
substituted "deductions made in Paragraphs (5) and (6)" for "deduction made in
Paragraph (5)" in Subsection E; and inserted the language beginning ", and then
reduced by the total" and ending "distribution is being computed," following "Oil and Gas
Production Equipment Ad Valorem Tax Act" in Subsection G.

The 1990 amendment, effective May 16, 1990, substituted "on December 1 of the
school year" for "the fortieth or eightieth day of the school year whichever is greater" at
the end of Paragraph (1) of Subsection D.

The 1989 amendment, effective June 16, 1989, inserted "upon the assessed value of
equipment in the school district as determined under" near the end of Subsection B;
substituted "a MEM" for "an ADM" near the middle of Subsection D(1); added present
Subsection D(2); redesignated former Subsections D(2) through D(4) as present
Subsections D(3) through D(5); in present Subsection D(3) inserted "or (2)"; in present
Subsection D(5) substituted "Paragraph (4)" for "Paragraph (3)" and "Paragraph (3)" for
"Paragraph (2)"; and in Subsection G substituted "Paragraphs (1) or (2) and (3)" for
"Paragraphs (1) and (2)" near the middle of the first paragraph and inserted "upon the
assessed value of equipment in the school district as determined under" near the end of
that paragraph.

The 1988 amendment, effective July 1, 1988, amended Subsections C(1),and C(2);
deleted Subsection C(3) regarding grants from the federal government to public
secondary schools; and substituted "state superintendent" for "director of the office of
education" in Subsection D.

Federal impact aid deductions. — Where the New Mexico public education
department (department) reduced state equalization guarantee (SEG) distribution
payments to the Zuni public school district based on anticipated federal impact aid
payments prior to certification from the secretary of the United States department of
education (DOE), the district court erred in finding that the deductions were authorized
under state law, because, under state and federal law, the state may not take into
consideration impact aid payments, whether anticipated or actually received, prior to
obtaining certification from the DOE secretary, and the department may not reduce SEG
distribution payments to an impacted district prior to certification, but once the state has
received its certification from the DOE secretary, the certification shall apply
retroactively to any impact aid payments received by the district during the entire fiscal
year. N.M. Pub. Educ. Dep’t v. Zuni Pub. Sch. Dist. #89, 2018-NMSC-029.

Deductions of federal impact aid funds from state equalization guarantee
distribution. — Where the Zuni public school district (Zuni) petitioned the district court
for a writ of mandamus, declaratory relief, and injunctive relief, claiming that the New
Mexico department of education (department) violated the Public School Finance Act
(the act) by deducting federal impact aid funds it anticipated that Zuni was gong to
receive from funds it was otherwise entitled to under the act’s share of school funding
prior to the federal department of education (DOE) secretary certifying New Mexico’s
school funding system, the district court erred in granting the department’s motion for
summary judgment because under federal law, the department was prohibited from
taking into account Zuni’s federal impact aid payments before the DOE secretary issued
its certification. Zuni Pub. Sch. Dist. #89 v. N.M. Pub. Educ. Dep’t, 2017-NMCA-003,
cert. granted.

Law reviews. — For note, "Indirect Funding of Sectarian Schools: A Discussion of the
Constitutionality of State School Voucher Programs Under Federal and New Mexico
Law After Zelman v. Simmons-Harris," see 34 N.M.L. Rev. 194 (2004).

For article, "No Cake For Zuni: The Constitutionality of New Mexico's Public School
Capital Finance System," see 37 N.M.L. Rev. 307 (2007).