Copyright © 2021 Albuquerque Journal
SANTA FE – A proposal to take more money from New Mexico’s largest permanent fund for early childhood programs advanced Friday, but still faces several obstacles before reaching a Roundhouse finish line that’s proven to be elusive over the past decade.
The proposed constitutional amendment passed the Senate Rules Committee on a party-line 7-4 vote after the sponsor of a competing measure that would have earmarked the extra money for teachers’ salaries asked that it be withdrawn from consideration.
But Senate Majority Leader Peter Wirth, D-Santa Fe, said the move did not mean discussion of the issue is over.
And the chairman of the next Senate committee that will review the permanent fund proposal suggested it could be amended before moving on to a full Senate vote.
“I think there’s a little work to still be done on it,” Sen. George Muñoz, D-Gallup, the Senate Finance Committee’s chairman, said after Friday’s vote.
He vowed the proposal would be voted on in his panel and said it had a “fair shot” at winning approval, but indicated legislators need to also consider public school issues in the wake of a landmark 2018 court ruling that found New Mexico was not meeting its constitutional obligation to provide an adequate education to Native American students and English-language learners.
Backers of the permanent fund plan, including the state’s Catholic bishops, have advocated for the proposal for 10 years, arguing that a cash infusion into programs benefiting the state’s youngest residents is the best way to address chronically high poverty rates.
But the idea has stalled repeatedly in the Senate in recent years due to concerns that a higher distribution rate would undermine the fund’s long-term health.
The measure approved Friday, House Joint Resolution 1, calls for the annual distribution rate from the $21.6 billion Land Grant Permanent Fund, also known as the permanent school fund, to go up by 1 percentage point – from 5% to 6% – into perpetuity.
That would generate an estimated $170 million for early childhood programs during the 2023 budget year, the earliest it would likely be in place, according to a fiscal analysis of the legislation.
However, the analysis also concluded the permanent fund would distribute more money to schools and other beneficiaries in the long run if it remained at the current 5% level, given the expectation that the fund would grow more rapidly at the lower distribution rate.
Specifically, the distributions would be higher for the next 20 years but, by 2042, would be smaller than if the current rate is left in place, according to the analysis.
Rep. Antonio “Moe” Maestas, D-Albuquerque, one of the measure’s co-sponsors, pointed out the permanent fund has grown in value over the past year due to investment returns, and inflows from oil and natural gas royalties, and said it can withstand a higher distribution rate.
“Now is the time to earmark these permanent funds and make a transformative investment in our youngest and most vulnerable children, who are the future of our state,” Maestas said.
He also said that if the proposal were to be passed this year – and by statewide voters, likely in November 2022 – it would prompt lawmakers to pass follow-up legislation determining the specific spending targets of the increased funding.
Already, the state’s spending on early childhood programs such as pre-kindergarten and home visiting has gone from about $140 million in the 2012 budget year to nearly $500 million in the current fiscal year, according to the Legislative Finance Committee.
And lawmakers last year created a new early childhood trust fund to help pay for such programs.
The Friday committee vote on the permanent fund proposal came after little debate and no public testimony, with several senators saying they have heard extensive debate on the issue in recent years.
The measure was approved by the House on a 44-25 vote last month, marking the fifth straight year the chamber has endorsed the proposal.
Gov. Michelle Lujan Grisham’s signature isn’t necessary to get the measure enacted, but she is a strong supporter and has personally lobbied for it since taking office in 2019.
Meanwhile, outside groups are also getting involved, with the Washington, D.C.-based Save the Children Action Network planning to launch a $50,000 cable network television ad campaign over the next two weeks urging lawmakers to support the measure.
The 60-day session ends March 20.