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Early childhood amendment may find more receptive Senate

A preschooler plays during morning recess last month at Christina Kent Early Childhood Center in Albuquerque. A proposed constitutional amendment would boost funding to help prepare children for kindergarten. (Roberto E. Rosales/Albuquerque Journal)

Copyright © 2021 Albuquerque Journal

SANTA FE – Democratic lawmakers who support withdrawing more money from New Mexico’s largest permanent fund – largely to expand early childhood programs – are entering the year with renewed optimism.

The 2020 election removed some key skeptics of the proposal from the Senate, where the resolution has run aground in each of the past four years after passage in the House.

But a Senate vote on the measure this year could be close, and some Democrats have floated the idea of scaling back the proposal or making the money available more broadly for K-12 education, not just services aimed at helping young children and their families.

Sen. Jacob Candelaria, D-Albuquerque, said supporters of the proposed constitutional amendment shouldn’t expect a “rubber stamp” in the Senate, even with the shake-up in membership. The proposal has died awaiting a committee hearing in recent sessions, he noted, without extensive debate among senators.

But it will get serious scrutiny in the Senate this year.

“There are a lot of practical questions that need to be asked and answered,” Candelaria said.

Republicans – outnumbered in both chambers – remain strongly opposed to the measure, contending the Land Grant Permanent Fund isn’t the appropriate source for the extra funding.

Debate over the measure comes after Democrats picked up one seat in the Senate – expanding their edge to 27-15 – and five Democratic incumbents lost in the primary to challengers from the left. Altogether, 11 of the 42 senators will be new to the chamber this session.

Democratic Reps. Antonio “Moe” Maestas and Javier Martínez, both of Albuquerque, have successfully carried the proposal through the House in recent years, and they say the 2020 election results bolster their argument for passage this year.

“We’re in a much better position,” Maestas said. “People are much more comfortable now than they ever have been with regard to the proposal.”

Martínez and Maestas say they aren’t planning any changes to the measure before introducing it. The proposal calls for increasing the annual distribution out of the Land Grant Permanent Fund by 1 percentage point, from 5% to 6%.

Preschoolers play during morning recess in early December at Christina Kent Early Childhood Center. New Mexico lawmakers are examining ways to boost funding for early childhood services. (Roberto E. Rosales/Albuquerque Journal)

The bulk of the money would go toward educational services aimed at helping young children before they’re old enough for kindergarten, such as pre-K and home-visiting programs to help new parents. Legislative analysts say they’ve found long-lasting academic gains in students who have participated in pre-K, although they’ve cautioned that it’s important to maintain high-quality programs as the services expand.

Martinez said the proposed amendment has been analyzed from all angles and is ready for Senate debate.

“This is the most thoroughly vetted piece of legislation that we will see in the coming legislative session,” he said.

Senate Minority Whip Craig Brandt, R-Rio Rancho, said the permanent fund is already a vital source of state funding and shouldn’t be tapped more heavily. And the state, he said, has succeeded in ramping up early childhood education spending without the proposed amendment.

“I don’t think the problem is money,” Brandt said. “We have dumped a ton of money into that program, rightfully so.”

Financial impact

The financial impact on the state’s Land Grant Permanent Fund, which gets income primarily from oil and natural gas taxes and investment gains, has been a focus of the debate.

The fund had a balance of about $20.8 billion in November, according to the State Investment Council. It works a bit like an endowment, with 5% of the fund’s rolling five-year average value withdrawn each year to help pay for schools, universities and hospitals.

In the fiscal year that begins this summer, for example, the land grant fund is expected to deliver more than $900 million to 21 beneficiaries, with public education getting about 86% of the distribution.

Previous analysis by staff for the Legislative Finance Committee has found that the fund would continue to grow if the distribution were increased to 6%.

But the growth would be slower than if the disbursement were left at 5%. After enough time had passed, in fact, the annual distributions would actually be lower under the 6% scenario than under the 5% projections – because the fund would be bigger if left at 5%.

It would take about 28 years of higher distributions for that happen, according an LFC analysis issued in 2019.

The 6% proposal passed by the House would generate somewhere around an extra $180 million a year.

Last year, a Senate committee revised the House proposal down to just an extra half a percentage point, for a 5.5% distribution. But the amended version didn’t advance to the full Senate.

Sen. Bill Tallman. D-Albuquerque, has been among those advocating for the smaller increase.

In any case, it isn’t clear whether the new version of the Senate would prefer the 0.5% proposal rather than the extra 1%.

Candelaria, for his part, said he would prefer making the extra revenue available for broader education purposes, not just early childhood programs.

Two recent court decisions found legal shortcomings in New Mexico’s education funding system.

Voter approval needed

If the proposal passes both chambers, it will still need approval from New Mexico voters in a statewide election and from Congress.

The state could seek voter approval as soon as this year. The options include conducting a special election by mail or adding the question to the municipal and school election already scheduled for Nov. 2.

The proposed amendment cannot be combined with the out-of-cycle election that’s expected to be called this year to replace U.S. Rep. Deb Haaland, who is President-elect Joe Biden’s choice to serve as Interior secretary.

The last time New Mexico increased the distribution rate from the permanent fund was 2003, when a proposal pushed by then-Gov. Bill Richardson narrowly won voter approval.

But the higher distribution rate of 0.5% – intended to pay for a new teacher salary system – was gradually phased out by 2016.

For the record: A Journal article Wednesday incorrectly described the size of an increased Land Grant Permanent Fund distribution approved by voters in 2003. The amendment approved that year boosted the base annual amount from 4.7% to 5.0%, but with temporary increases that pushed the distribution as high as 5.8% some years before being rolled back to 5.5% and then down to 5.0%, where it stands now.


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