Copyright © 2020 Albuquerque Journal
SANTA FE – A high-profile plan to use some of New Mexico’s oil-fueled budget windfall to set up a new early childhood endowment fund cruised through its first Senate committee Monday, generating some questions but no opposition.
The proposal, one of Gov. Michelle Lujan Grisham’s top legislative priorities for the 30-day legislative session, passed the Senate Education Committee 9-0.
Senate Bill 3 calls for a certain amount of energy-related tax collections to be diverted in years when total state cash reserves exceed 25% of spending levels.
For the budget year starting in July, roughly $320 million would be funneled into the proposed fund.
Senate Finance Committee Chairman John Arthur Smith, D-Deming, one of the bill’s co-sponsors, described the proposal as a reliable plan to pay for home visiting, prekindergarten, child care assistance and other early childhood programs.
“This gives us revenue stability, at least for the next five years, and the state cries out for that,” said Smith, who has opposed a more ambitious effort to increase distributions from the state’s $19.7 billion Land Grant Permanent Fund for early childhood programs.
Although all members of the Senate Education Committee voted in favor of the bill, some questioned whether the proposed trust fund would merely be used to offset other funding sources for early childhood programs across New Mexico.
“I worry this is going to take a long time to get up to $5 billion,” which is the level needed to generate current early childhood spending levels, said Sen. William Soules, D-Las Cruces.
However, Finance and Administration Secretary Olivia Padilla-Jackson, the Lujan Grisham administration’s top budget official, said the state would still continue spending money from other sources on early childhood programs.
“This is intended to supplement, not supplant, general fund and federal spending,” Padilla-Jackson said.
She also said the funding strategy would allow the state to use some of its current $1.7 billion budget surplus to prepare for a possible revenue dip in future years.
New Mexico has rapidly increased spending on early childhood programs in recent years – total state and federal dollars are roughly $550 million this year – and lawmakers last year approved a new Cabinet-level agency, the Early Childhood Education and Care Department.
But Lujan Grisham has argued that more needs to be done to reach her goal of having “universal” prekindergarten in New Mexico – or at least 85% of 4-year-olds enrolled in private or public programs statewide.
Under the terms of the bill approved Monday, $20 million would be transferred from the trust fund to the Early Childhood Education and Care Department in July 2021.
After that initial distribution, annual transfers of at least $30 million would be made – or possibly more depending on the fund’s overall value.
The legislation now advances to the Senate Finance Committee.