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NM permanent fund plan clears House

Copyright © 2019 Albuquerque Journal

SANTA FE – A plan to take more money from New Mexico’s largest permanent fund for spending on home visiting and other early childhood programs cruised through the state House late Friday on a 41-27 vote.

But for supporters, now comes the hard part.

The proposed constitutional amendment, House Joint Resolution 1, now advances to the Senate, where similar proposals have run aground in previous years.

Backers say this year could be different, pointing to the election of Gov. Michelle Lujan Grisham, who supports the idea, and an expanded Democratic majority in the Legislature.

“New Mexico is hurting and we all know this,” said Rep. Javier Martinez, D-Albuquerque, one of the measure’s sponsors, during Friday evening’s debate.

He cited the state’s low ranking in various national child wellbeing measures and said the permanent fund idea is more sharply crafted than when it was first proposed in 2011.

However, critics describe the proposal as a raid on the state’s Land Grant Permanent Fund that would leave less money available for future generations.

“We are taking from the children of tomorrow, grasping for the children of today,” said House Minority Leader James Townsend, an Artesia Republican.

The plan approved Friday calls for the annual distribution rate from the permanent fund to go up by 1 percentage point – from 5 percent to 6 percent – into perpetuity.

That would generate an estimated $170 million for early childhood programs during the 2022 budget year, the earliest it would likely be in place, according to a fiscal analysis of the legislation.

Lujan Grisham, a Democrat who took office last month, has described the proposal as a “responsible pinch” from the permanent fund, which already distributed more than $747 million in the current budget year for public schools and other beneficiaries.

She congratulated House members after the Friday evening vote, saying they were on the “front lines of delivering the change our children need and deserve.”

However, not all Democratic legislators are on board with idea.

Four House Democrats joined with Republicans on Friday in casting “no” votes on the proposal – Reps. Harry Garcia of Grants, Joseph Sanchez of Alcalde, Candie Sweetser of Deming and Roberto “Bobby” Gonzales of Taos.

In addition, Sen. John Arthur Smith, D-Deming, the influential chairman of the Senate Finance Committee, said recently that he supports increasing funding for early childhood programs – but from other revenue sources than the permanent fund, currently estimated at $17.4 billion.

In some past years, including last year, Smith did not hold a hearing on the permanent fund proposal once it reached his committee, saying it did not have the necessary votes to advance.

Total New Mexico spending on early childhood programs has already increased steadily in recent years, from $136.5 million in 2012 to $313.2 million in the current budget year.

But backers say more can be done in a state with one of the nation’s highest poverty rates.

“We don’t want to just send money to the future; we’ve got to send educated children to the future,” said Allen Sánchez, executive director of the New Mexico Conference of Catholic Bishops, after Friday’s vote.

A State Investment Council analysis of the plan predicted the permanent fund would continue to grow in size over the next 20 to 30 years even at the 6 percent distribution rate, due to expectations of steady tax and royalty inflows from the oil and natural gas industry during that period.

But the analysis concluded the fund would distribute more money in the long run if it remained at the 5 percent level, given the assumption that it would grow more rapidly at the lower distribution rate.

If approved by both the House and Senate, the proposed constitutional amendment would be decided by statewide voters – likely in November 2020.

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