Court: State needs OK to offset federal aid with cuts

Zuni school district filed suit after Public Education Department stripped $4.6M

The New Mexico Supreme Court ruled this week that the state Public Education Department must obtain permission from the U.S. Education Department before reducing funding to local school districts to offset federal support.

The court’s unanimous decision centers on an 8-yearold case filed by the Zuni Public School District, which said the New Mexico agency cut its funding by about $4.6 million over 10 months in fiscal year 2010 because of $6 million it had been awarded in what is known as impact aid from the federal government. Federal law allows districts that are on or near tribal lands, military bases or other federal lands to receive the aid because they are unable to raise revenue through property tax levies.

New Mexico’s school funding formula allows the state to reduce the amount it gives to local districts receiving this federal help by an amount equal to 75 percent of the federal funding — as long as the state first receives approval from the U.S. Education Department.

The Zuni district, which serves 1,385 students on the Zuni Pueblo in McKinley County, said it was left strapped for cash in 2010-11 because the federal funding did not arrive until near the end of the fiscal year. This forced the district to request $500,000 in emergency funding from the state education department, which the agency fulfilled.

The suit spotlights the importance of timing when it comes to a public school district’s ability to leverage both state and federal funding to run its operations.

The problem for Zuni was that the state did not receive federal permission to withhold funds until late April 2011, close to the end of the spring semester for most public schools in New Mexico. And the federal money did not arrive until months later.

Senior Justice Petra Jimenez Maes said in the court’s written opinion that in the future, the state Public Education Department’s monthly funding distributions must be made without consideration of possible federal impact aid until the U.S. education secretary “has granted the state permission to consider impact aid prior to certification.”

It is unclear how many other districts the court’s ruling might affect.

Efforts to reach a representative from the U.S. Education Department for comment were unsuccessful.

Lida Alikhani, a spokeswoman for the state Public Education Department, did not return a request for comment.

Santa Fe attorney Ronald Van Amberg, who represents the Zuni school district in the case, declined to comment other than to say the court’s decision speaks for itself.