LESC and LFC Meeting Update

This past week the LESC and the LFC met for the first time during the interim.  The LESC meeting was held by video conference and audible to the public via web stream.  The LFC met in Cloudcroft, New Mexico.  Attendance at the meeting was limited to presenters, staff and Legislators.  Attendees had to wear a face mask and social distance.  The meeting was audible to the public via web stream as well.  I will summarize what was presented and discussed at the meetings.

LFC–The Reopening of the New Mexico Economy

It is no surprise that the corona virus has devastated our economy, not only in New Mexico but globally.  Economists say that the US may enter into a deep recession which may take years to recover.  Because of the closures across the state our Gross Receipts Tax revenue has declined(10.6%), especially in the areas of tourism, recreation, food services, hotel accommodations, salons and drilling activity in Eddy and Lea counties, causing long term devastation to the New Mexico economy.  The Governor was hoping to move the state into Phase Two which would include expanding capacity restrictions for restaurants, businesses, theaters and allowing people to meet in groups.  Unfortunately, due to the increase in the transmission rate of the virus, the parameters of Phase Two are still being determined.  The virus will determine how quickly our economy will return to the “pre-covid” economy it once was.  Experts say we will not and can not return to a “pre-covid” economy.  Economists also say our state’s unemployment could bounce back by 2024 but jobs may be completely different due to many small businesses that will not survive.  It is estimated that 165,000 jobs will be lost by the end of the year. They also say the oil and gas industry will be slow to recover. This means the consequences will be great for education.  Legislators, during the upcoming Legislative Session, are going to be making hard decisions when putting together the state budget.  They may have to consider tax increases and make spending cuts as our economy downturn continues.   And, because of the oil industry being in such bad shape our Legislators will be forced to find other sources of revenue.  Even though the price of oil has stabilized at around $40 a barrel, that could change in an heart beat.  The economic recovery of our state depends on the spread of the virus, the length of the states imposed business closure and a viable vaccine.  Economists continue to emphasis that for the economy to improve in our state, we must continue to wear masks, wash our hands and engage in social distancing.

This and That–Information taken from the discussions

  • One in five New Mexicans is receiving unemployment benefits.
  • The $600.00 per week unemployment checks stop at the end of July.
  • There have been 21,924 Paycheck Protection Program (PPP) loans distributed to New Mexico businesses.
  • Cities like Taos and Santa Fe, which are dependent on tourism, are suffering due to the shut downs.
  • New drilling in the Permian Basin fell 64% in May as compared with a year ago.  Drilling rigs fell from 117 to 48.
  • New Mexico’s average oil price in April was $14.38 a barrel; however, the forecast for FY 21 is about $39.00 a barrel.  Remember, we can not depend on the oil and gas revenue as we have in the past.
  • We count on 41% of the GRT and 40 cents on the dollar from gas and oil for state budget revenue.
  • The state’s Department of Economic Development stated that companies from densely populated states like New York, New Jersey and California are looking to move to less populated states like New Mexico and Wyoming.  That was a bright spot!!

LFC & LESC –Reopening Public Schools

The PED, including Secretary Stewart, presented to both of the committees.  The PED released their guidance on school reentry for this coming school year.  They are recommending all schools in the state open with a hybrid model of instruction.  Their recommendations are as follows.

  • Cap total student occupancy at 50% or the number that can accommodate while adhering to 6 feet of social distancing,
  • Require distance learning for students NOT in the building,
  • Maintain daily screening,
  • Require rapid response testing for all staff,
  • Require face coverings for all students and staff.

Schools can move from the hybrid instruction to the full school model depending on the health conditions.  Traditional schools and charter schools will incur additional cost to provide distance learning, PPE, cleaning and providing staff for the hybrid instruction.  The National School Board Association and the Business Officer Association estimate the cost to be $488.70 per student for an average school district.  Seventy percent of this cost is related to personnel such as a nurse in every school and an aide for every bus.  In New Mexico the cost drops to $482.67 per student.  To help with the costs, the schools received $97 ml from the CARES Act.  PED withheld $10 ml from the grant to support high need schools.  The state received a total of $130.9 ml in CARES funding, which also included $22 ml the Governor received for technology, training and additional supports.  The state ( Governor) will assess the school reentry to a full time schedule when the data indicates that it is safe to move forward.

The most important information brought up in both committees was the loss of three months to an entire year of learning due to the school closures and the issues with remote learning during the spread of the virus.  The learning loss is expected to impact younger at-risk children more.  In March, when the Governor closed the schools for the remainder of the school year, the PED required schools to develop distance learning plans for their students.  With those plans came many problems.  Some students did not have access to the internet, computers, and parents had a difficult time helping their children.  In a survey taken by the LFC, less than half of the students were regularly participating in distance learning.  Attendance was not utilized in many cases.  While some states continued teaching new material, New Mexico relied on reviewing previously learned material.

  • Each school district and charter school has developed their own plan to open their schools.  Those plans were to be submitted to the PED by July 15th.  Some school districts and charters are starting out with online instruction  at the beginning of the school year, while others are using the hybrid model having students in school two days a week and then online from home for three days.  Needless to say, all Legislators agreed that personal face to face instruction is the best way to teach our students.
  • The loss of learning due to COVID-19 at the high school level would increase drop out rates and cost the average student between $61,000 to $82,000 in lifetime earnings or the equivalent of a year of full time work according to the McKinsey report.
  • An administrator from a BIA school stated that 55% of their students did not have access to the internet and 50% of the students did not have access to their own devices at home because many members of the same family were doing their work on the student’s computer.  One Legislator said students on the reservation had to go to the McDonalds in Gallup to use their internet to complete term papers.
  • There was great concern expressed by Legislators that special education students were not receiving the learning they needed.
  • Legislators were also concerned about childcare during the reentry of the schools.  If both parents work what happens to the children who are home alone when they are not in school???  PED said they were working on that concern.
  • According to the PED’s operating budget, the schools’ cash balances (traditional and charter) are projected to be $344 ml.  Since the SEG distribution is flat for the FY 21 school year, school districts and charters will need to restructure programs and leverage their cash balance savings to address additional costs related to reopening their schools.  This comment was made by a LFC staff member.
  • New Mexico and Maine have the most vulnerable teachers, with 25% of New Mexico teachers over the age of 55.
  • The Judicial District Court rejected the state’s motion to dismiss the Martinez-Yazzie lawsuit.  The Court said the state must provide a sufficient and uniform education to all students in spite of the public health emergency.
  • Many teachers have opposed in-person schooling at this time, saying lives could be on the line
  • The state has enlisted Los Alamos National Labs to study four main scenarios for reopening schools.  According to Dr. Scrase, we should have that information sometime next week.

The 2020 interim LESC tentative meeting schedule is as follows:

  • August 24-26   Santa Fe
  • September 23-25   Santa Fe
  • October–no meeting
  • November 4-6   Santa Fe
  • December 16-18   Santa Fe
  • January 18, 2021   Santa Fe

One last reminder, please spend your Capital Outlay money.  We hear the state will be releasing the money in September.   USE it or LOSE it.