This report compares New Mexico's reading and mathematics performance on the most recent administrations of the state assessment with performance on the National Assessment of Educational Progress (NAEP). To indicate how New Mexico is doing in narrowing the academic achievement gap between African American and Latino students and their white, middle class peers, the report presents NAEP data by race/ethnicity. The report presents other state-level data on K-college education, including demographic distribution across each educational level, participation and success in Advanced Placement, percentage of students taking high-level courses, school funding gaps, and high school and college graduation rates. On New Mexico's 2002 reading test, white 4th graders scored at the 65th percentile, while African American 4th graders scored at 48th percentile and Latino 4th graders scored at the 47th percentile. On the 1998 NAEP reading assessment, 52 percent of all 4th graders were basic or above in reading, with 22 percent proficient or above. On New Mexico's 8th grade mathematics assessment, white students scored at the 64th percentile while African American and Latino 8th graders scored at the 41st percentile. On the 2000 NAEP mathematics assessment, 49 percent of all 8th graders were basic or above in mathematics, with 13 percent proficient or above. In 1998, New Mexico had the ninth smallest Latino-White achievement gap on the NAEP 4th grade reading assessment. New Mexico's Latino-white 8th grade math achievement gap falls 14th among states on the 2000 NAEP assessment. Latinos are underrepresented in Advanced Placement exam taking and in enrollment in gifted and talented programs. About 37 percent of New Mexico high school students enroll in college, compared to 54 percent nationwide. Over one-third of New Mexico's secondary classes are taught by teachers lacking a major or minor in the field. Districts with the highest child poverty rates, and those with the highest minority enrollments, have fewer state and local dollars to spend per student. (SM)