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By CEDAR ATTANASIO Associated Press / Report for America

SANTA FE, N.M. (AP) — New Mexico education officials accepted a federal decision barring them from taxing millions in federal aid sent to school districts near tribal areas and military bases.

Public Education Department Secretary Ryan Stewart said Tuesday that the state will not appeal because it would likely fail in court.

The decision means more money for some school districts as they keep both their federal and state funding. The Legislature had planned to allow them to do so starting next year.

“We don’t lose $1 of education funding in the state,” Stewart said in an interview last week, in which he took some responsibility for his department missing a March 3, 2020 deadline for the application cited in the federal agency’s decision. “Now the big problem that that presents, of course, is that’s not how the Legislature budgeted for the FY 21 year.”

Unless the state taps into reserve funding for at least $35 million, there will be a statewide education budget shortfall that could affect all school districts.

New Mexico is one of three states, along with Alaska and Kansas, that essentially redistribute federal Impact Aid, a supplement for school districts who can’t tax the land around them because it is federal property. In New Mexico the lands range from Indigenous nations, to military bases and missile ranges, to federally owned forests.

State education agencies are allowed to take the so-called Impact Aid “credit” if they redistribute funding to reduce disparities between school districts. Other states simply allow massive funding inequities between poor and wealthy areas.

Federal officials rescinded approval of New Mexico’s Impact Aid Credit application in a letter on April 15, citing the state’s failure to meet a March 3, 2020, application deadline by three days.

“It’s incumbent upon me as Secretary to have the kinds of redundancies in place to make sure that we can’t miss a deadline like that,” Stewart said last week.

But he added that the Department of Education hadn’t provided the information needed to finish the application and that his staff received assurances over the phone that missing the deadline would be forgiven.

Federal officials also approved the application in writing last year, but then rescinded it this year, according to an April 15 letter from the U.S. Department of Education.

Impact Aid Director Faatimah Muhammad was not made available by the Department of Education to comment on the decision, and a spokesman declined to respond to Stewart’s criticisms.

Stewart also criticized federal education officials for rescinding approval of the application on April 15, about four months after it had approved it and the state Legislature had passed the annual budget.

“We remain deeply troubled by the Department of Education’s multiple errors, miscommunications and ultimate decision in this process,” Stewart said Tuesday.


Attanasio is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on under-covered issues. Follow Attanasio on Twitter.

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