Webinar - 2026 Legislative Prep Session: Navigating Fed. Changes in Ed. Funding for Student Success

Hi everyone and welcome to the third webinar in this year's legislative prep series. We're grateful to the Education Commission of the States and to the National Association of State Boards of Education for partnering with us to bring you today's webinar. Uh first a quick cap on where we've been so far in this series. Many of you may have joined us for the first two webinars. Uh you heard state leaders from California and Kentucky, two very different states, very different contexts, share a common vision for how community schools are transforming student outcomes and well-being and also reflect local needs. Earlier this week, just just two days ago, Indiana and Washington described their approaches to re redesigning the high school experience, including smoother, more structured, supportive pathways to post-secary and career success. Across these conversations, we hear states expressing the same commitment to great public schools, to engaging and challenging instruction, to improving outcomes for learners. Um, we know that all states want the best for their students and also that leaders across the country are grappling with a lot of the same challenges. stagnant achievement, chronic absence, growing concerns for youth mental health, uh the ubiquity of technology, and the persistent challenge of directing resources to the right places so that each and every student gets the education that they deserve. This is our second year hosting this legislative prep series. Uh we're back because we recognize the need for more collaborative spaces like this where states can share interests and challenges and exchange ideas about what's working in policy and in practice. Um, so today we're going to delve into school funding, an issue that is ever evolving and and always a a top priority for states. Over the next hour, we're we will hear about challenges um in the school funding landscape broadly. We'll be joined by legislators from Montana and New Mexico who are going to share how they're navigating these changes. Um, it's my pleasure. I'm going to just let us dig in here to I'm going to hand off to LPI senior fellow Mike Griffith who's going to set the stage for today's discussion. Thanks so much for being here. Over to you, Mike. >> Thank you so much. So, we've got a lot to talk about today. Um, my name is Mike Griffith. I work on school finance issues at the Learning Policy Institute. Uh, with us today, too, is uh, Chris Duncan. Chris is going to be talking about state funding research. What I'm going to talk about in the beginning is what we know and a lot about what we don't know about what's happening at the federal level. Uh then we're going to have uh Senator Souls from um New Mexico and then Representative Jones from Montana talk about what's happening at their states and some solutions both for state issues and then maybe some things you can learn that they're doing in their state to prep for federal uh some of these federal issues. Uh we're going to have plenty of time for Q&A. So let's get started and talk about the federal issues. Um, just as a reminder, federal funding is small but still important within K12 school funding. Uh, in this for the 2425 year, this is an estimated number, but it's about 8% of K12 funding comes from the federal government with 44% coming from local and 48% coming from states. Always an important reminder and state policy makers know this, but I think it's good for everyone else in the audience. The state controls both the state funding and the local funding in the sense that the state can determine how much locals can bring in, how much they can spend. So at the state level, we're talking about either direct or indirect control about 92% of the funding. So in K12 education, that's really where the game is. But that doesn't mean the federal funding isn't important. It definitely is. And it ranges greatly. Even though it's 8% nationally, it ranges from 3.9% in New Jersey up to 18.7% in Montana. Uh that's a bit unusual for Montana to be up there. That's normally New Mexico and Mississippi are up there. There might be that might be some residual effect from some of the the ARPA or the uh COVID funding. Uh but it gives you a general idea. The other thing to to understand too is it ranges greatly within a state. So there are some school districts that might receive 1% or even less than that from federal funding. There are other school districts that receive 20 25% or even more from federal. So it can be incredibly important for certain school districts to understand what the trends are in happening because it is such a large source of funding. Um, also as a reminder too, I think we tend to think of large urban districts as the ones receiving large amounts of federal funding or a high percentage. That's not always true. It can be large urban districts, but it it is just as likely that is small rural districts and poor communities that receive a high percentage of their funding from the federal government. So, it's all across the board when we look at that. Um, so what do we know? What don't we know? So, let's start with the unknowns. Um, we don't know which programs and grants have been cancelled uh or reprogrammed by the US Department of Education. We thought at this point we would back in uh July when we planned this session. We thought we'd know all sorts of things about what's happening at the federal level. Unfortunately, we don't. Um we're still kind of in a wait and see mode. uh what funding we don't know the funding levels or any guard rails that Congress might put on once they enact the FY26 budget. We'll talk about that in a second. We do have ongoing federal funding obviously. Um but a new budget has not been passed and so we're waiting to learn what that could mean will mean for schools. Um and then this question about inter agency agreements as some of the functions of the US Department of Education have been moved to other divisions of the federal government. We don't know what that means. Will that mean there's going to be a change in the way the funds are distributed? The requirements under this funding um we know this is happening. Uh but there are also some legal challenges to this. So the question is when will it fully happen? Will it fully happen? And then what what will that mean to states? So, unfortunately, we just don't know that right now. Let's talk about some of the stuff we do know. Um, that the it's a bit confusing here with the federal government because the federal budget runs from October 1st to September 30th, which is different from all of your almost all of your state budgets. There's only two states that have a budget cycle that's the same as the feds. Um, so when we talk about funding, it's from October 2024 to September 2025 was the last budget. The current budget that we're in, the October 25 to September 26, has not been passed, but they have passed a continuation. So in other words, the funding that happened under the previous budget will happen this year. It's about $45 billion in the past year and we're looking at $45 billion in the current year under the continuation. Uh but the president has proposed a budget for this uh 2526 year, the year we're currently in, that would be $ 38 billion. That'd be about a 15% funding reduction. And the other thing that, you know, I'll keep stressing here is this is just a proposed budget. Proposed budget doesn't mean it's going to pass. doesn't mean it's going to be enacted, but it's a it's a proposition that this could be passed and if it was, it would result in 15% cut in funding. Um the I think one of the big notes here is that the proposed budget would not reduce spending for title one part A. Title one part A and IDA, which is the funding for special education, account for about 75% of the federal spending on K12 education. Those are the two big pillars. All of the other programs account for about 25%. So, uh, title one part A is not being touched. There would be some reductions, and we'll talk this in a bit, proposed reductions for IDEIDA, special ed funding. Um, but uh, but again, you get an understanding that the two big pillars, one will not be touched, the only one, the only other one in smaller ways. a lot of the other programs that will be cut theoretically or eliminated. Um, and if the administration's budget were adopted, over 30 different um, P12 related programs would be eliminated. And here are the programs again in the proposed budget that could be eliminated. You can see uh, some things within title one could be eliminated. Title ones part C and D would be could be impacted. Um but uh and the uh other programs some of these would be reductions some of them would be complete eliminations. It just gives you a general idea there. And again if you look that does not come to 30 but each one of these have subprograms and that's that 30 number that has been estimated that would be eliminated. So, if this were to pass, we could see some pretty large reductions um in these programs, but the question would be A, is this going to pass? And then B, what would that mean for states? Um so, this is the position we're in right now. We just don't know much about what's happening. There's also questions that we've received about different cuts in other programs within the federal government. what would that mean for schools? And again, we're kind of waiting on what the impact for those would be. Uh what we can tell even in the best case scenario is there would be flat funding at the federal level um at a time that we're seeing all sorts of issues at the state level. So now I want to turn it over to Chris and talk a bit about since we're unsure about what's happening at the federal level, what is happening at the state level and what do we need to think about in that side um to be prepared for the upcoming legislative session for you all in January. Um Chris Duncan is the uh principal at the education commission of the states. Chris has worked with many states on school funding issues. Um Chris, I'd like to turn it over to you now and then have you talk about what's happening, what you're seeing the emerging issues in states. >> Great. Thank Thank you so much, Mike. Really appreciate being here today and um thank you for that overview at the federal level. Uh as you said, I'm going to be shifting to gears a bit to what we've seen at the state level. Uh, Education Commission of the States is an organization uh that serves state education leaders in all 50 states. We've been doing that for 60 years now. And as part of that work, we track uh legislation in states related to education policy. We do that in 40 different topic areas. And I get to lead our tracking on school funding. And so, I was going to share what we've been seeing um so far in 2025 that might have implications going forward for 2026. Uh but before I I dive into that topic, one kind of overarching trend that we've seen is fewer bills related to school funding in states. Um not that we are able to identify every single piece of legislation that gets introduced and enacted in states, but um we've summarized 98 school funding bills so far this year. We typically average about 150. And I think some of that um the fewer number of of bills is is related to a lot of that uncertainty happening at the federal level that Mike touched on. Um but it's also impacted by uh a shifting budgetary picture for state governments. uh NASPO, the National Association of State Budget Officers, released their fiscal survey of the states last month and uh it it shows a a trend of um tightening budgets and and flat spending when it comes to general fund expenditures. The graph I've put up here is uh the percent change in general fund spending in state budgets, both total and median, uh to try to control for outlier states. And you can see going back to 2022, there were historic levels of general spend fund spending growth, a 16% increase, which was uh the largest increase that NASBO recorded in their survey in over 40 years. Um that picture has shifted dramatically now just a 1.3% increase in in total general fund spending growth in enacted budgets for 2026. Uh so states are in a very different financial position than they were a few years ago and that might explain why we're seeing uh a bit more limited action in terms of of state funding changes. But that doesn't mean that that states aren't making changes to their budgets. Uh it just means we we're seeing fewer bills and um not as many largecale shifts as we have in the past. Um but there are three trends that we have seen in 2025 that really builds on um areas of emphasis for states in prior years that I think will continue on into 2026. And the first is uh states continuing to uh enact uh new funding formulas and transition to more student-based funding models. We saw this in 2022 with Tennessee last year. Uh both Colorado and Mississippi enacted new funding formulas and this year Alabama adopted the renewing excellence um renewing Alabama's investment in student excellence or raise act um and which is a largecale change to how they allocate K12 funding in their state. And I'll go through a little bit more detail on Alabama's funding model in a moment. The other area that we're seeing movement is um states changing how they're directing aid that's that's targeted for specific student groups that are receiving additional services. Um a lot of states shift the level of funding that they direct to different student groups. But we're also seeing states shift how they identify these students for supplemental aid. And we're going to be hearing from uh New Mexico Senator Bill Souls to talk about how New Mexico's shifted their at risk measure targeted to students from low-income backgrounds relying more on state data than relying on on federal data that many other states use. And the last trend that we've seen um has been towards uh states effort to increase uh compensation for teachers particularly starting teacher pay um with states enacting minimum pay requirements in statute. Um, and we'll also be hearing um from legislation that was adopted in Montana, the STARS Initiative um that tries to better align starting teacher pay with average teacher salaries in districts across the state. So before we we shift to those those highlights, I I did want to dig a little bit deeper into each of those topic areas. Uh I mentioned that Alabama adopted the new raise act. Um the the bill shifts the state to a student-based funding model. Um and in these models, the state allocates a base dollar amount that gets allocated to every student in the state and then they weight supplemental funds for students that receive additional services. And in part of um doing this legislation, the state has directed $166 million in the first year of implementation um to support additional funds for students from low-income backgrounds, English learners, students receiving special education services, uh students in gifted programs, and for charter schools. um as part of you know going to a student-based model. One of the the drawbacks or challenges that states sometimes experience is that um while providing a lot of flexibility at the local level, there are some limitations um from the state level in terms of accountability and oversight. Uh Alabama included two bodies to have um continued oversight of the implementation of the new formula and also to be monitoring student outcomes. um they created both a raise act review committee and an accountability and implementation board. The accountability and implementation board um is charged with monitoring um student outcomes and also reviewing accountability plans that are submitted by districts um and can potentially recommend corrective actions if if certain schools or districts are not meeting the standards or goals that they set out. Um so it's a balance of both trying to have flexibility for districts and also um having some accountability measures at the state level. So that was the the the big shift in funding formulas that we've seen um in terms of weighted funding allocations. There's a lot of green check marks on this uh slide here, but what I'm trying to illustrate is that a lot of the states that have adopted new funding models, I mentioned Tennessee, Mississippi, Colorado, and Alabama, they're targeting funds to a lot of the same student groups. Um there's some differences in how those dollars get allocated, but largely are identifying the same types of students for sort of supplemental state funds. um with a big emphasis on better differentiating funding based on level of service. Um even within each of these student groups and an example is in for special education services Tennessee through their TISA program um has eight different weighted funding categories based on uh the students IEP and hours of of direct services they're receiving for special education per week. Um so really trying to differentiate aid based upon the level of services students are receiving. Um and so that is kind of an example of areas where states have been dedicating support for specific student groups. And the last area that I mentioned, there's been um an effort to um alter state funding and try to improve um funding levels for teachers, particularly around starting teacher pay. Uh states can take kind of one or two approaches um for improving teacher pay. One being more of the carrot, which is to provide a financial incentive for districts to improve teacher pay. and and that aligns with the example from Montana that we're going to be hearing more about. The other is more of the stick which is having a minimum or teacher pay requirement set in state law. Uh states can go about these minimum pay requirements in one of two ways. They can have one minimum um amount required across the whole state which is just one minimum pay salary amount which typically is like $45 to $60,000. Uh this is where where a lot of states have been enacting bills to um create just one minimum salary mark in the state and uh both uh Maryland and South Dakota are two states that are implementing minimum pay requirements for the first time this year. The alternative approach is to have a salary schedule. So this is a a range of minimum pay requirements uh for teachers based upon different levels of experience or their credentials. Um so hopefully this kind of gives you a flavor of some of the areas that you know we've been seeing some state action and change um at recently and um with that and happy to address any of those questions in these different topic areas when we transition to the Q&A portion. Um I think we'll we'll now dive in a little bit deeper into the work that's being done in New Mexico. And I'm going to welcome New Mexico Senator Bill Souls, who's the chair of the Senate Education Committee. Uh it's wonderful to have you here, Senator. I think you're on on mute, Senator. There we go. Okay. Thank you. U Thank you. I appreciate it, Chris. uh in New Mexico uh I have to start with we're a little bit different than other states in that our entire operational budget is on a formula and so it is not locally controlled at all. It all comes through a formula but New Mexico u has always had an at risk factor a multiplier for students at risk and research shows concentrated poverty in communities are negative factors to to student learning. Um, and so that prompted us to have an accurate way of identifying students that are high risk. Uh, for decades, like most states, New Mexico identified lowincome students using proxies such as Title One and free and reduced lunch data. But New Mexico, like many other states, is also rapidly moving towards universal free meals, which makes the free and reduced lunch not an effective way of determining poverty as those are no applications are no longer identified. as well as uh using census data types of things is not a very good way of of determining using zip codes for instance because there are concentrated uh poverty within different zip codes particularly in a very rural state that has large areas. This prompted New Mexico to create a modern student level incomebased measure to replace those proxy measures. Um, New Mexico chose to use primarily its own state data. So, we aren't relying on federal data for any of this. And the New Mexico legislator legislature created the family income index or the FII in 2021 and used a pilot to see how that data was working. Uh it identifies concentrated poverty at the school level identifying those shortcoms of free and reduced lunch as a proxy or censusbased ones and provides targeted funding for the state for low income. The particular measures that New Mexico uses are state income tax records uh where the public education department submits student information to the state taxation and revenue department to match students with parent and guardian tax filings and that provides the most accurate data. it comes back to the public ed not with individual identifiers but with uh broader identifiers just by which districts students are in. And then that picks up about 69% of all of the students. Then they use public records data that matches to benefits data like Medicaid through the New Mexico Healthcare Authority. Uh that picks up another 16% or so of the students. And then the last ones use a census estimate but only for those unmatched students. Doing that uh ensures full income classification for all of the students matches. That's about another 15%. When we went through and did that, it picked up pretty accurate income data for all but nine students statewide. Not 9%, nine students statewide were able to get matched through all of that. And so, you know, it's really important that the the family income index does not identify each student by their specific household income. It categorizes students into income categories where they will fall and then based on the number of students in each category, funding goes out to the school district to then be distributed by individual school where the highest needs in poverty are. Uh the legislation that was enacted this last year shifted from the pilot to doing this statewide in the funding formula for all students. And so, you know, so far it seems to work very well and is a much better measure than using a proxy like free and reduced lunch in order to determine poverty levels for the state. And happy to answer any questions about that. >> Thank you, Senator. And I think that's a great example that of a state not relying exclusively on on federal data or participation federal benefit programs. You mentioned it is a supplement to the the state income taxes, but you're also using state data to help identify students. So, really appreciate you being here and sharing that uh example from New Mexico. I'll hand it off to to Mike, I think, to take over. >> Yeah. And I'm going to introduce Representative Jones, who's been working for years in Montana on school funding. He was both a senator and now a rep. And you're the chair of the appropses committee. Is that correct? >> That is correct. I chair appropriations. And so >> you all had a big success on increasing teacher salaries and that was one of the big things Chris pointed out and that's something I hear in a lot of states. Could you kind of talk about that and what you did and and uh why you chose to do it? >> So um yeah, so I' I've uh been doing it for about 20 years now. Uh Montana has um approximately 400 school districts and our our challenge is it's a very strong local control state. It's uh uh we are formulaf funded right to a to a base level and the locals can choose to put up some extra. So we have a formula funding uh but the formula funding has an inflation cap in it and uh of course ESSER was causing us a cliff problem like everyone else despite admonishments not to use it for ongoing that seemed to work about as poorly for us as it did in a lot of states. Um and so we needed to uh and we had a low teacher pay, a starting teacher pay problem. Interesting in our local control state with our 400 independent districts, some really small, you know, 10 people or under districts and some big um it's all local control bargaining. And uh who showed up at the bargaining table primarily are your more senior teachers and their end of the scale was not bad in Montana, especially in the bigger schools. They were actually relatively high. the average wasn't too bad and we just sucked on the low end. We were some of the lowest, if not the lowest in the country in a lot of spots. And so we tried to address this in the past. You know, you throw money at it. We had a small teach act, but we could get the money to go local, but local control never would put the money or wouldn't guarantee the money would go to the classroom teacher. It went wherever they felt it should go. So, interestingly, we used our esser cliff and our inflation problem as a lever. We said, "All right, uh, we need to create a program and we need to get some bipartisan buy in to in order to pass a program because if you if you look at uh our Republican leaning legislature, it's it's we have a lot of the very extreme right folks that just don't want to vote Republican at all. So, we're going to need some Democrat votes, but we also have a whole group that including the governor that's very performance-based that we're not just going to throw money at a problem. So, we decided we had to create a a performance-based funding package that would get the buy in from all these blocks. It had to be primarily state funded because we had a property tax problem that was giving us some challenges. So, we created what was called the stars act. Um, so what the stars did is is it set up B teacher now we can't force local control to do anything. We don't have to give them money either. So it's an incentive. So basically it said this look uh you will get and we have what it's called a quality educator payment which is it's inflation link but right now it's $3,700 per teacher that goes out to every teacher in every school. We said if the base starting teacher pay had to be a minimum of 11 times the QEP or 42,000 and there was a second Mendoza lining there. It had to be uh because the bigger schools were already there. It had to be uh uh it began at 60% but the beginning pay wage had to work its way up to 70% of the average so that it compressed the scale because what we had was this extremely wide scale. Good in the top bad on the bottom. If you met this benchmark and certified you would meet it the first year because you never money. But if you did meet it, then instead of getting $3,700 per teacher, you got double two times the QEP. And uh and so that would but you only got it if you did it. If you didn't do it, obviously you didn't need it because you weren't paying your teachers. Now um in order to pass this bill, we had to also do some other performance-based things in it. the bill. We we were we've had some student outcome challenges in a number of areas. So, this one actually paid for outcomes as well. Half went to the teacher salary side. It uh it pays a uh if if you have and and we didn't again with a Republican and we had to pay for both dual credits on the academic side and for career credits. So, basically it said look, you'll get some additional funding for every student that graduates high school with 15 credits. That's one level. And that adds another, I believe it, let's see what it was, $800 to the high school QEP and 600 to the elementary. So, a school would get 1,400 bucks for that kid. You know, that graduated with 15 credits, effectively double that for 30. And then if you get all the way to 60 associates degree, it's more. But it wasn't just on the dual credit side. It also paid for the stackable career credential side. CNAs, nursing, it we didn't care whether you were in a welding shop or not. Um so the combination of those three uh seemed to uh get us enough buyin. We had to add a housing component for teachers. But effectively what happened then is the teacher pay and the housing support got us some devotes. The performance-based side on both the teacher and the uh we're not just going to throw money at it. uh credentiing kids graduating more got us the Republican side and uh and it also forced an alignment between our K12 system, the office of public instruction and our higher education system oi and the department of labor because labor gets to determine working with business what is a credential that matters to business right and so with that alignment we were able to uh pass this package uh the vast majority of schools I think of the 400 maybe it was only eight that didn't choose to do it and they don't have to. It's local control. In speaking with them, they were quite happy with it. And again, it it wasn't easy to pass. The union did not like the fact we were saying you didn't get money unless you brought your bottom teacher pay up. And well, there's always somebody with a variety of reasons not to take it. But what worked for us is the the ESSER challenge along with an inflation shortfall allowed us the impetus to design a program that fixed our ESSER shortfall, but it did it in a manner that ensured that the money got to the classroom teacher, especially on the beginning pay side, and it also rewarded those schools that were enhancing student opportunities whether on the career side or on the uh academic side. So that's a quick summary of uh uh STARS the House Bill 252. >> Thanks so much for that. You you are a very local control state. I don't think most people know about you all and the fact that you have elementary school districts, junior high school districts, high school districts, and K12 districts. So a student can never move and be in three different districts during their their academic career. Bit unusual. Um >> it's a massive number of districts each with their own ability to control. Um you you have a very difficult time using any sort of a stick with them. We we had tried just throw money at the whole system. But what happens is the it got worse. the the spread between the bottom teacher and the top teacher spread. And so we had to create a scenario that caused both the local superintendents and principles to to focus on uh how they would negotiate at the bargaining table to begin the process of narrowing the uh gap cuz uh if you take our biggest schools and you put them on the national scale on the high end we're just fine and the midpoint we're about in the midpoint and the bottom sucks. It it was just consistent across the board that uh the local control negotiation and my and this is anecdotally me saying this, it seemed to be was uh my wife was the chair of the school board and of the statewide schoolboard association is largely that negotiators were more senior and they seem to take much better care of their end of the scale than they did the beginning teacher end of the scale, you know, and so it's and you get to some of the rural towns and uh they just are more interested in other things than putting money into the uh teacher classroom. Well, now in order to get that chunk of money, you don't get to say you you have to prove up. It's uh it's you you have the right you have the local control to decide not to receive the incentive. >> Great. Thanks for that. I think we're going to move on to the Q&A for for all our participants. Um and I'm going to start with uh a question. We received a lot of uh questions before the session. They all centered around one way or the other. What can states do to prepare uh for possible changes in federal funding, for possible cuts in federal funding? Um Chris, I'm going to start. I know it's a real difficult question, a real big one, but could you kind of talk about what you think states could do and then I'd like to move over and talk to the legislators and see what's happening in their states, what they're doing. But we'll start with you with the sort of national overview. Yeah, I I think there's a couple of things that state leaders can be um looking to do in this time period of of uncertainty. Uh the first is kind of basic, but I I you know, I started my overview about the tightening financial positions that states find themselves. Um and I think states can try to provide some stability to districts and the funds that they're getting from the state um while they're navigating the uncertainty at the federal level. um you certainly don't want to be compounding the challenges that local districts are having by also cutting programs at the state level for certain services for students. So I think the the first thing is just to try to provide some financial stability uh with state dollars. The the other thing that I think states can be doing is um looking to identify their K12 priorities, funding priorities and um or processes for getting that for identifying those priorities from the public. Um we don't know that there will be block grants. We don't know how if there will be shifts in how federal aid will be distributed, but the discussion certainly has been an emphasis on uh state decisionm and state flexibility. Um, so going through the process of identifying what are your biggest funding priorities if there are increased flexibility in federal funds um so that you're prepared to hit the ground running and and not caught off guard if all of a sudden um federal programs really change their requirements and it's really just a state decision on in terms of how dollars get allocated. So, I think those are two very kind of basic things that states can be doing right now um to prepare while we're in this period of of uncertainty. >> Great. Thanks, Chris. Um Senator Souls, can you talk about what's happening in New Mexico, how you all are preparing for for possible changes? >> Certainly. And as everyone knows, there are changes not just in education, but across the board. And I think New Mexico uh very forward thinking set up a new interim committee of which I'm one of the co-chairs called the federal funding stabilization subcommittee which makes recommendations to our finance committees about where we ought to be looking at uh major changes that are coming. As most of you know a lot of the changes are a couple of years down the road but New Mexico doesn't want to wait till then to see what happens and trying to be proactive in a lot of ways. Uh as a result of that committee, we've actually had two special sessions this summer where we backfilled uh money that's already been cut and uh were able to to mitigate some of those in some of the SNAP benefits and things of that sort. Uh particularly in the education areas, most of the federal funding that we get in education does not currently look like it's in serious jeopardy. Uh large chunk of it is impact aid. We've got a quite a number of our students in districts that get money uh because of the tribal lands that are in those districts. That does not seem to be in jeopardy at this point. Most of the title one is not in jeopardy. Most of the special education funding is not in jeopardy. Uh we are concerned about the changes in the agencies um and who's going who do you call with questions about whether something counts or doesn't count. uh with that institutional knowledge at the Department of Education shifting somewhere else we worry is going to be be lost as to whether you're following the rules right or or how do you get questions answered and that's one of the bigger concerns. Uh the place where we probably see the biggest impact are the ones that are more around the cultural issues. the ESL funding, the English second language. New Mexico has a very large number of second language learners where there's federal funding coming into the state and districts for those students, also rural. And we know that changes to the SNAP is going to affect lots of our students. 40% of our students are living at or near poverty. And so that'll have major changes on schools making sure that the the children have the food and societal types of things so that they can take advantage of the education. Same thing the the changes in Medicaid funding is going to have large impacts for lots of our students and children and so very concerned about those going forward. That committee though keeps a close eye on things. Uh, I feel some of my role on the committee is being in the education realm is to keep reminding people that the federal changes are not a an impact to the budget. They're a change that affects people in the state of New Mexico. And we need to keep that focus that this really is about how it affects people, not just how it affects a budget. >> Yeah, really good point. And uh on impact aid, this is one of those things that if you're west of the Mississippi, you know what impact aid is and it's a big deal to you. If you're east of the Mississippi, you might wonder what that term even means. Um and >> I could explain that a little more if you'd like. >> Uh well, you know, I think it you did a nice job of summarizing it in the sense it is for it's for >> mostly tribal and federal lands. >> Yeah. And then a little bit military, too. But yeah, it's it's primarily that. So, um, but Representative Jones, do you want to talk about what you all have been doing to prep for this in, uh, Montana? Um, >> sure. Um, so I've been before I, when I was in the Senate, I was chair of finance and claims. In the House, I've been chairman of the PROPS. So, um, we've been on a journey I've always called from being uh, reactive to proactive for a period of time. And so here a few years back we formed a committee called the modernization and risk analysis committee. Its whole purpose is to look we say 20 years out and that's probably a further horizon than you can have but to get off the two-year cycle. uh and the so the MARA looks at changing trends in all of these areas and it's extremely focused you know whether it's tax whether it's how our population is changing the aging any of those factors in the state and obviously federal is a huge factor that uh we're doing a long-term look into what funding we have coming in federal where it goes and its impact not just in education but uh as New Mexico mentioned in all areas this. We also uh put triggers into our uh legislative uh fiscal division, our finance committee that meets all summer while in the interims that if uh federal funding's changed by an x percentage, we'd have additional meetings and resources to look at the federal changes and prepare for what to do with them. Obviously, we met hit those triggers. So, uh, we've got those two items happening and just by happen chance, every 10 years we do a significant reook at our education funding formula and uh there's a 10-year study that's going on um and that is underway as we speak and of course federal is a conversation there. So, we have have been looking at this pretty steady. We've also started to with all of our small school districts as you mentioned and little little lines out there. We've uh uh within House Bill 252, the STARS Act, we created an incentive package that says if you'll share administration, we'll give you a little extra money. If you'll share bill clerks, we will. And even some of these schools that are close together with our block type scheduling, they could share a Spanish teacher or a shop teacher where two days in one school, two days in the other. And so we're trying to incentivize all of those items because while a lot of folks look to the state and assume it can just stabilize, money is a scarce resource for a state just like it is for a federal. You have to have a source of funding to stabilize. Right now we're in a pretty good shape in Montana. But hopefully with all of those items, we'll be uh well, at least not be reactive. You know, the goal is to be proactive. >> Thanks for that. Um, you know, we've gotten a couple of different questions asking us to predict what the feds are going to do. There's one specifically about um are are the feds going to make these uh grants competitive? Are, you know, I've heard from different states that are looking at, you know, the possibility of federal government gives the grants to the state and then the state distributes them down to the school districts. That's not how it works for most of these programs. Now, uh we just don't know. And I'll be honest with you, whatever I tell you, I think I know. do the opposite because I'm usually so wrong on these things. Um, but you know, just I think what you all are doing is what you need to do which is just prepare, get your get yourself in order and then be ready in case there are major changes or or you know there are minor changes. I also think Senator Souls you brought up another really good point which is making these changes with the US Department of Education impacts communication. It also impacts data collection. And this is something from our level that we're worried about. There's a lot of information. We do these state-by-state comparisons that allow us to understand where states are at that comes from the federal government and there's some concern there that the all the data won't be collected or won't be collected in the way it always has been because consistency is so important with that stuff. Those are really boring things, but they're important too for policy. Uh we received one question about um funding and you know do states dictate that districts must distribute funds to schools in a certain way and the answer is it's all over the map. In some cases you you mandate that states provide funding especially Chris was talking about that we seeing an increase in funding for low-income students in English language learners. A lot of states are saying if we're going to give you those dollars, you have to prove to us you're spending them in the schools where the funds where the those kids are. Um, but I'll give a shout out to Chris and his team at ECS. They have an excellent database that you can walk through and look at how every state funds English language learners at risk students, special education. Chris, is there any other group I'm missing in there? You have almost everything you need in there. We also have small and sparse districts um and gifted and talented programs >> which is all very important especially the small and sparse um some states have both where they fund small schools but if you're sparse if you're too small to exist um without this funding then you know there's an extra bump in in state funding for that. Um, so I'm, you know, I'm trying to think how we can answer people's questions when we don't have a lot of information. So is there any other thoughts you all have as we're kind of wrapping this up and coming to the end that you would say to someone that you were talking to? What can we do to prepare? What are things we need to think about? And Chris, I'll give you the the last kind of goaround here. >> Yeah, thanks Mike. you know, and we don't know what's going to happen at that federal level, but if these funds do get block granted, and I think there's a lot of questions we've seen in the chat around uncertainty around how the state will allocate those funds, what community- based organizations can be doing um as these decisions are being made. There's an example very recently of a large infusion of federal funds that could be flexibly spent and you know esser and as part of the esser allocations there were a lot of concerns about transparency in that process. Um so I think state leaders can alleviate a lot of fears by creating a very transparent process as they're determining the allocation of those federal funds if they get block granted. And an element of that was included in ESSER was that uh state and districts had to meaningfully engage with education stakeholders. So creating some sort of a process um for how those dollar how you're determining priorities and how aid is getting allocated and being very open and transparent about um to the public about those decisions I think will will go a long ways to earning trust with the public and the public can be pushing for the opportunity to talk with state leaders about how these spending decisions are being made. Um, so that's something that jumps to mind. If we start going down that direction of black grants where the state leaders have a lot more discretion and allocation of these federal programs. >> Really good point about this kind of balance that we're always trying to do at both the federal level and the state level of providing freedom but putting in guard rails. And one of the things I heard from Esser over and over is that people the districts liked the flexibility, but there were some who pushed back because there were decisions that were made that were questionable. And I heard about the one school district that built a football stadium. I've heard that story a million times. But this is what happens if you, you know, with freedom is that there are a lot of these choices. And as a reminder, there are 18,000 local education authorities in this country. um if you give them all their own powers and freedoms, someone's going to make a a mistake, you know. So, it's just one of those how do you balance that to make sure you're doing it correctly. Uh Senator Souls, any last thoughts on this about what states can do. Again, I I think states need to to pay attention to what's happening at the federal level. Recognize that what happens is not just an attack on budgets or a concern about the budget, but how that affects the children in classrooms, how it affects the teachers, how it's going to affect communities. And make sure that you're trying to be proactive. As Representative Jones indicated, being proactive is being proarmed. you're ready to move when you need to, but you don't want to to think that the sky is falling. Uh, in that federal fund stabilization subcommittee, I several times said, you know, the sky is not falling yet, but know where your hard hat is, you know, so that if something does happen that you're ready and prepared. >> Great. And Representative Jones, I'll give you the last word here. >> Yes, sir. Um, no, proactive is key, right? That's uh states are often reactive. the two-year election cycle causes that. But I truly believe that looking further ahead, being proactive, having a structured design that looks out there consistently forward, sees what's changing, sees what's um coming down the pipe, does the analysis, puts together, I always call it unbiased data for as clear a look forward as possible makes all the difference. And so, uh, and obviously having some reserves to work through it when they do occur. Um, things won't always be smooth, but yeah, that's that's been our goal as a state. My goal as an individual is to uh try to not be so reactive to recognize there are disasters, there are federal changes, there are elections, there are challenges, and that money is a scarce resource. We can't just throw money at it. The taxpayer does rebel in that unless you have a unique money source, as some states do. But for the most part, um, proactive works just like it does in any area. You don't wait till your roof fails to fix it. You be proactive. >> It's a good point. Um, I want to thank all of you for participating in this. Uh, again, I'll remind you if you got any questions about school funding, ECS has a huge wealth of knowledge that Chris and his team have put together. Uh we also have information on all sorts of topics on school funding but also all just about anything else within education at the learning policy institute that uh you can tap. Uh I want to thank uh Representative Jones and Senator Souls for coming in here and providing all this good advice and information. Um and we also want to thank our partner at NASBY and our partners with ECS through all of this as we've made these uh these different uh meetings and presentations. uh the other sessions are available online I believe now and this session will be available online in a few days. So if you want to go back and take a look at these you're more than welcome to. Um but other than that I'd just like to thank you all for attending our meeting and participating and look forward to working with all of you in the future. Take care.