Copyright © 2021 Albuquerque Journal
SANTA FE – The state House endorsed a proposed constitutional amendment Friday that would authorize tapping more heavily into New Mexico’s largest permanent fund – legislation designed to deliver an extra $170 million a year to early childhood education.
It’s the fifth year in a row the resolution has cleared the House.
But new leadership in the Senate – with broad changes in the chamber’s makeup – is giving supporters renewed hope that this is the year the proposal will pass the full Legislature.
The extra 1% distribution from the Land Grant Permanent Fund would also require voter approval.
“This is an important day for this Legislature,” said Rep. Javier Martinez, an Albuquerque Democrat and co-sponsor of the resolution. “This has to be one of the most-vetted pieces of legislation we’ll see this year.”
The proposal, nevertheless, may face revisions in the Senate.
Senate President Pro Tem Mimi Stewart, D-Albuquerque, said Friday that she and other Democratic senators are weighing whether to seek changes that would dedicate some of the extra money to K-12 public schools – not just prekindergarten and other early childhood services.
The distribution amount itself might also face change, she said, perhaps boosting the proposed withdrawal to 1.25%.
“We’re hoping (the House) will agree with slight changes,” Stewart said in an interview.
Rep. Antonio “Moe” Maestas, D-Albuquerque, said he and other House sponsors will insist on maintaining the 1% distribution for early childhood education services – an area of spending with a proven track record, he said, of boosting academic outcomes.
“We know the biggest bang for the buck is investment in early childhood,” Maestas said.
But he said he’d be open to increasing the proposal beyond 1% for other purposes.
As it stands now, House Joint Resolution 1 – passed 44-23 Friday – would boost the annual distribution out of the permanent fund from 5% to 6%. It would generate about $170 million a year for early childhood education and about $27 million for other legal beneficiaries of the fund, such as universities.
Unlike similar proposals in past years, the legislation doesn’t call for congressional approval, which Maestas said isn’t necessary as long as the beneficiaries aren’t changed.
Opponents of the proposal on Friday said the increased distribution would damage the financial health of the Land Grant Permanent Fund, which is already a critical source of funding for public education.
The fund would grow more slowly if distributions are increased, according to legislative analysts. In fact, the annual distributions would eventually be lower under the 6% scenario than under the 5% projection – because the fund would grow more quickly if left at 5%.
The flip would occur in about 21 years, according to the analysis.
Rep. James Strickler, R-Farmington, said it would be more prudent to fund early childhood programs through the general state budget.
“This permanent fund is a blessing,” he said, “but it’s volatile.”
Rep. Rebecca Dow, R-Truth or Consequences, said no one disputes the importance of early childhood education. But legislators have succeeded over the years, she said, in expanding early childhood programs without turning more heavily to the permanent fund.
Dow disputed that congressional approval isn’t required, and she questioned whether New Mexico has the capacity to spend the early childhood money effectively.
“I think what people are asking is, ‘How do we assure the dollars go where you’re suggesting?'” Dow said.
She crossed party lines and voted “yes” on the measure.
The proposed amendment passed largely along party lines, with Democrats in favor and Republicans opposed.
But Republicans Dow and Rep. Luis Terrazas of Silver City supported the resolution.
And Democratic Reps. Harry Garcia of Grants and Candie Sweetser of Deming voting against it.
Senate approval is required to send the amendment to voters in a statewide election.
Gov. Michelle Lujan Grisham’s signature isn’t necessary, but she is a strong supporter of the measure and has personally lobbied for it since taking office in 2019.
“Investing in early childhood development is one of the best things we can do to ensure our children’s success, support working families and pave the way for New Mexico’s economic development and future prosperity,” she said in a written statement.
Sen. George Muñoz, a Gallup Democrat and the new chairman of the Senate Finance Committee, said he would ensure the proposal gets a hearing in his committee. In past years, the measure has sometimes died without a vote.
Muñoz said he would probably support the amendment if some of the money is used to help K-12 public education. But he added, “I don’t know how (committee) members will vote.”
Stewart, the new president pro tem, said New Mexico faces legal pressure to improve its public education system, underscoring the need to provide extra money to serve students in elementary, middle and high schools.
Two recent court decisions found legal shortcomings in the state’s education funding system.
The Land Grant Permanent Fund had a balance of about $20.8 billion in November, according to the State Investment Council. It now operates similar to an endowment, with 5% of the fund’s rolling five-year average value withdrawn each year to help pay for schools, universities and hospitals.
At the current rate, it’s expected to deliver more than $900 million to 21 beneficiaries in the next fiscal year.