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House: Don’t boost permanent fund tap

SANTA FE, N.M. — The House on Thursday narrowly passed a proposed constitutional amendment that would extend indefinitely an increased distribution from the state’s Land Grant Permanent Fund for teacher pay raises and schools.

The House voted 36-33 to send House Joint Resolution 10 to the Senate.

The proposal, sponsored by Rep. Jim Trujillo, D-Santa Fe, will go straight to voters in the November 2014 general election if the Senate approves.

The question would be whether the state continues a 0.5 percent increase in the annual distribution from the Land Grant Permanent Fund to fund the state’s three-tier teacher pay system and other education improvement programs. The increase was first approved by voters in 2003.

A competing proposal being considered in the Legislature would extend the 0.5 percent increase for teacher salaries while also adding a further 1 percent distribution to fund early childhood education programs in New Mexico. Senate Joint Resolution 3 would increase the annual distribution rate to 6.5 percent. That bill is waiting to be heard in the Senate Finance Committee, where it faces scrutiny by fiscally conservative members of the committee before it can go to the Senate floor.

Trujillo, in defense of his proposal to continue the 0.5 percent increase in the annual distribution, said, “People will argue that we haven’t improved our schools, and I will argue back that we have,” Trujillo said.

“If you look at the improvement of our teaching staff around the state, a lot of teachers have moved to get their master’s,” Trujillo said, thanks to a three-tier pay system to encourage teachers to earn higher degrees.

“Now, I think the result of this extra funding is going to come to fruition,” Trujillo said.

If no action is taken, the rate will decline in fiscal year 2016 to 5 percent, down from the 5.5 percent currently pulled each year from the $11.45 billion permanent fund.

If the 0.5 percent for teacher pay is not extended, state public school funding will drop by an estimated $50 million a year.

Opponents have criticized the increased permanent fund distribution as ineffective in improving schools and threatening to the long-term health of the Land Grant Permanent Fund. Many say the overall distribution rate should not exceed 5 percent annually.

The three-tier teacher pay system funded by the increased permanent fund distribution has not resulted in significant gains in student achievement, the Legislative Finance Committee reported in 2009.

“The differences in student achievement between licensure levels, in general, were not significant, especially in light of vastly different compensation, and achievement gains were insufficient to increase proficiency levels on a large scale,” the 2009 LFC analysis concluded.

Since 2005, reading test scores in New Mexico have not improved beyond 50 percent proficiency. Math scores have increased from about 30 percent proficiency in 2005 to about 43 percent last year.

House Speaker Ken Martinez, D-Grants, said the funding should be extended to maintain the state’s commitment to improved education.

Martinez said the increased distribution in 2003 to fund teacher raises helped New Mexico improve from 50th in the U.S. in teacher pay to 35th.

Improved student performance has taken more time, he said, but the system is showing signs of improvement after high school graduation rates jumped in 2012.

“This is not something that happens overnight. This is something that all of us have worked on,” Martinez said. “… This continues the effort of 10 years ago.”

Supporters noted that House Joint Resolution 10 includes a safety mechanism. The increased distribution would be cut off if the Land Grant Permanent Fund’s value dropped below $10 billion.

House Minority Leader Don Bratton, R-Hobbs, said the additional distribution would effectively take money away from future generations of New Mexico students because the fund likely would not be able to grow enough to keep up with inflation.

“I think we have the responsibility to show the self-discipline the previous generation showed by not raiding the fund for their own personal use,” Bratton said.

Rep. Tom Taylor, R-Farmington, said reducing the distribution rate to 5 percent per year would allow the fund to grow faster and, as a result, annual payouts would increase.

“Every dime that we take out reduces the future distribution,” Taylor said. “That’s a bad idea.”

The extension and the Senate proposal to increase the distribution by another 1 percent are opposed by business groups, including the Greater Albuquerque Chamber of Commerce, which backed the 0.5 percent increase in 2003. The business groups say the increased funding has been difficult to track and has not accomplished its intended goal.

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