SANTA FE – A proposed constitutional amendment to increase permanent fund distributions for expanded early childhood programs passed its first committee hurdle on Wednesday after lawmakers agreed to reduce the proposed withdrawals.
The reduction in the proposed withdrawals was aimed at addressing concerns over the future financial health of the Land Grant Permanent Fund.
Senate Joint Resolution 3 passed the Democratic-controlled Rules Committee on a party-line vote and now heads to the Senate Judiciary Committee. If passed by the Legislature, voters would consider it in November 2014.
The constitutional amendment proposal, sponsored by Senate Majority Leader Michael Sanchez, D-Belen, would allow the state to increase its annual withdrawal from the Land Grant Permanent Fund to 6.5 percent, up from the 5.5 percent now being withdrawn. The additional 1 percent would generate about $113 million per year to fund early childhood education programs such as preschool classes and in-home visits for new parents.
The proposal also would extend a half-percent of the distribution rate for teacher raises that voters approved in 2003, otherwise scheduled to expire in 2016.
The State Investment Council has warned the new spending could tap too deeply into the permanent fund and force cuts to future funding of public education programs in New Mexico.
Acknowledging concerns, members of the Rules Committee on Wednesday voted to reduce the proposed permanent fund distribution for early childhood education to 1 percent, down from the initially proposed 1.5 percent. The 1.5 percent distribution rate was estimated to generate about $170 million per year for early childhood programs.
The committee also voted to force the new distribution rate to expire after 10 years, providing the Legislature an opportunity to determine whether the new spending -an estimated 1.1 billion over 10 years – was effective.
Sen. Clemente Sanchez, D-Grants, proposed the amendments saying he would oppose the bill without the changes.
“I know early childhood education, 3 years old or even sooner, that’s where our children learn,” Sanchez said. “I don’t want to be one to stop that, but I think I want to be fiscally responsible on behalf of the taxpayers of the state.”
Sen. John Arthur Smith, D-Deming, said that reducing the proposed distribution to 6.5 percent does not do enough to alleviate his concerns that the new spending will hurt the permanent fund. He said distributions should be capped at 5 percent.
Sen. Gerald Ortiz y Pino, D-Albuquerque, defended the proposal, saying, “I don’t see how this is going to deplete the fund.
“It may reduce its growth somewhat, but that just means we’re going to see an investment in kids,” Ortiz y Pino said.
— This article appeared on page A6 of the Albuquerque Journal