Frequently Asked Questions Regarding Funding for Santa Fe Public Schools

Why did SFPS have to reduce the budget?
In spring and fall 2009 our legislature met to address a severe state-wide budget shortfall.  In fact, the state’s revenues for the next two years are expected to be substantially lower than in the past because of the nation-wide recession.  In 2007-08, our State Equalization Guarantee (SEG) was $83,673,828.  Our SEG for 2009-2010 is $78,237,753 due to the reduction in the unit value.  Our district’s overall needs last spring were over $90,000,000; however, we had to reduce our budget by $4,500,000 in order to create a balanced operational budget.  Our operational budget is primarily salaries and benefits, fixed costs such as insurance premiums and utilities, and a small percentage is used for funding district initiatives not covered by grants and other revenue streams such as nurses, counselors, after school programs and athletics.  We received $5.5 million in stabilization funds. 

What is the district’s current financial situation?
The district is very solid and stable financially.  In fact, we are one of the most financially sound school districts in the state right now.  We also have the second highest bond rating of any district in the state.

How does district make budget decisions?
The Superintendent created a Superintendent’s Budget Advisory Committee (composed of executive staff, principals, directors, Union representatives, and community members and parents).  The committee works with the Superintendent and her Executive staff to make recommendations to the Board of Education regarding the Operational Budget.

The Board of Education is required by state law to hold public meetings regarding the Operational Budget and to seek input from parents and community members.  Based on these recommendations along with the staff recommendations, the Board of Education makes all final decisions regarding the Operational Budget.  They determine what to cut, what to keep, etc., and one of their major roles as a Board is to ensure sound fiduciary management for the school district.

How do state budget decisions affect our schools?
State funds make up 97.4% of the district’s operating budget.  As stated above, most of the funds are tied up in salaries and benefits—about 85 percent, with the rest going to other fixed costs, and a very small percentage used for things not currently funded from other revenue streams.

Will class size be affected due to the state’s budget deficit?
Currently, class size is not affected.  New Mexico is known for having unusually small class size limitations; however, there has been much talk and discussion at the state level of increasing class size.  This did not happen during this past year’s legislative session, but could happen in future years.  The district currently uses an average of 22 for staffing grades K-12.  Maximum class size for Kindergarten and first grade is 20; grades 1-3 is an average of 22, grades 4-6 is an average of 24, and grades 7-12 is a maximum student caseload of 160 with English at 135.

Will teachers or other staff members be laid off if the state makes further cuts to education?
About 85 percent of the district budget is spent on people – on staff salaries and benefits for teachers, educational assistants, support staff, administrators and others.  In the event the state makes more cuts to education in the coming year, it will be difficult to further reduce our operational budget without direct impact to classrooms.

In the event, the district would have to make further budget cuts, what programs would be affected?
In the event of further budget cuts, the district must consider any programs that are not legally or contractually obligated.

Will special education be affected?
Again, the district must consider any programs that are not legally or contractually obligated.  The district does receive some money for special education that is categorical, in other words, it cannot be spent for anything else.  Those dollars would not be cut from the budget.  We also received about $2,000,000 this year in Stimulus funds specifically for special education.

Can’t we stop adding more technology and use that money to fill the gap?
New technology is paid through capital outlay funds.  We are very restricted in how we use funds from a general obligation bond or mill level election.  Funds have to go for buying assets – things that have value like computers or building – or improvements to assets. Under limited terms and conditions, staff that work on installing, improving or building those assets can be paid from capital funds.  It can also pay for training to use the asset.  So if we stopped buying technology, we would simply have more money sitting in our capital account.  We cannot transfer capital money to an operational account.

Why do we have plenty of money for capital projects but too little in the general fund?  
In Santa Fe, we have a strong capital program based on our property values.  Capital levy dollars have to pay for assets – tangible things of value like buildings or equipment such as computers – or improvements to assets, like a new roof or heating system on a building, or related costs like training on how to use the asset.  New Mexico is one of the few states in which mill levy dollars generated from SB-9 and HB-33 cannot be used for operational or instructional costs.

Can’t the district raise more money?
We do have additional money through local, state and federal grants.  We also have the Santa Fe Public Schools Partners in Education Foundation that helps to support the district through teacher mini-grants, field trips, teacher scholarships, etc.  The foundation is currently working to build an endowment, but in today’s tough financial climate, progress in this area has slowed down significantly.

Can the district spend its reserves?
The district prides itself on maintaining emergency reserves and a fund balance each year. These two items are what our creditors look at closely in establishing the district’s credit rating and bond ratings.  Just as it is important to have a good personal credit rating, it is important for the school district to maintain a good credit rating also.