HEATS

1812

ROOM 433 CAPITOL BUILDING

The proportion is computed by calculating the amount of local revenue
contributed under the equalization program by a school district and
dividing that amount by the total amount of revenue applied to education
by that district.

Example:

New Mexico's program guarantees each district $905 per program
unit. District A contributes $500 per unit, applies no other
revenue and the state provides $405 per unit. New Mexico could
take credit for 100% of 874 funds ($500/500).

There is no local leeway available except earnings and miscellaneous
revenue in New Mexico. The percentage will always be near a 97% figure
in New Mexico since 97% of all state and local revenues are equalized
statewide.

STATE OF NEW MEXICO

DEPARTMENT OF FINANCE AND ADMINISTRATION
PUBLIC SCHOOL FINANCE DIVISION

SANTA FE
87503

NEW MEXICO AND THE WEALTH NEUTRALITY TEST

AREA CODE 505 TELEPHONE 827-2562

EXHIBIT #2

The test required a state to have 85 percent of all pertinent state-
local educational revenues in a wealth-neutral category if it is to
count impact aid funds as a local resource.

In nearly all districts, the percent of neutral revenues has increased
dramatically from pre-equalization levels.

This test requires that no more than a 25% difference exist between per
pupil expenditures or revenues at the 5th and 95th percentiles of dis-
tricts within the state.

1973-74 Actual revenue per pupil (pre-reform)

111 percent disparity between districts at the 5th and 95th percentile

1975-76 Actual revenue per weighted pupil

18.2 percent disparity between districts at the 5th and 9th percentile

EQUALIZATION EFFECT OF NEW SCHOOL FINANCE FORMULA

IN 1976-77 EACH NEW MEXICO SCHOOL DISTRICT WAS GUARANTEED $800 PER WEIGHTED PUPIL UNIT.

THE

PROPORTIONATE SHARES OF LOCAL AND FEDERAL REVENUE ARE REPRESENTED BY THE TWO DIFFERING BUT
CONNECTING BARS. THE AREA REMAINING BETWEEN THE BARS AND THE VERTICAL BROKEN LINE INDICATES