Senate weighs bigger take from permanent fund - Albuquerque Journal

Senate weighs bigger take from permanent fund

Grace Baca plays in a play house at Atalaya Elementary School in Santa Fe on March 5. She is one of the kids in the prekindergarten classes at the school. (Eddie Moore/Albuquerque Journal)

Copyright © 2021 Albuquerque Journal

SANTA FE – A revised plan to expand early childhood education by tapping more heavily into New Mexico’s largest permanent fund is headed to the Senate floor – the potential tipping point after a 10-year push by supporters.

One senator called it a “historic day” after a decade of intense debate over similar legislation.

The proposal, however, was overhauled Tuesday in the Senate Finance Committee.

The new version would ask voters to boost distributions out of the Land Grant Permanent Fund by an extra 1.25 percentage points – rather than 1 point – and some of the money would be dedicated to K-12 education, not just early childhood programs, as originally envisioned.

The heftier proposal passed the committee on a 7-4 party-line vote – with Democrats in favor – and now heads to the full Senate.

Sen. Jacob Candelaria, an Albuquerque Democrat who sponsored Tuesday’s revisions, said the proposal would generate an extra $127 million a year for early childhood education and $84 million to expand services for at-risk students, compensate teachers and extend the school year.

The broader spending, he said, is necessary to ensure that the academic gains children make in prekindergarten – among other early childhood programs – are sustained into elementary, middle and high school.

“We cannot leave any child at any point of their development out of this conversation,” Candelaria said.

Republican senators opposed the proposal, describing the extra distribution as an inappropriate way to pay for expanded services.

The annual withdrawal from the permanent fund would climb from 5% to 6.25% under the measure.

“We do care about children,” said Sen. William Sharer, R-Farmington. “This is just the wrong path to go down.”

Tuesday’s vote marked a milestone in the debate over boosting withdrawals from the permanent fund and could provide a path to approval in the Senate.

If the Senate approves the revised bill, it will have to return to the House for a final vote.

But Democratic Reps. Antonio “Moe” Maestas and Javier Martínez – both of Albuquerque and co-sponsors of the legislation – said they support Tuesday’s version of the proposal.

“It not only helps early education,” Maestas said, “but it’s a sea change in New Mexico politics.”

For five straight years, the state House has passed a proposal for an extra 1 percentage point distribution that would be dedicated to expanding prekindergarten, home visiting programs for new parents and other early childhood services.

But it has never reached the Senate floor after House passage.

The proposal, House Joint Resolution 1, faced possible defeat again this year after two Democrats on the Senate Finance Committee – Candelaria and Chairman George Muñoz of Gallup – said last week that they wouldn’t support the House version.

They supported the revised version taken up Tuesday.

Candelaria said the broader K-12 education system needs extra revenue, in part, to extend the school year to help offset the learning loss students experienced after about a year of remote classes during the pandemic.

The state also faces a court ruling that found New Mexico is violating the rights of at-risk students by failing to provide a sufficient education.

Candelaria’s amendments would dedicate 60% of the extra distribution to early childhood education and 40% to enhanced instruction for at-risk students, lengthening the school year and compensating teachers.

Muñoz said his committee would watch to ensure the money is spent effectively if the amendment is passed by lawmakers and voters.

“We will be watching how you spend these dollars,” he said. “Turnabout is fair play.”

He also made reference to the proposal having died repeatedly in previous years.

“This is a historic day,” Muñoz said.

He is the new chairman of the Senate Finance Committee after voters shook up the composition of the Senate in last year’s elections. Eleven of the 42 senators are new to the chamber this year.

Republicans and Democrats alike have supported substantial increases in early childhood education funding over the past 10 years.

Research shows that participation in prekindergarten produces long-lasting academic gains for New Mexico children who participate, according to legislative analysts. The effect can be compounded with extra services during elementary school, they say.

But there’s been intense debate at the Roundhouse over whether to withdraw more money from the permanent fund as part of a strategy to pay for expanded early childhood services.

Any increase in the distribution percentage would slow the growth of the $22 billion fund, similar to an endowment, according to legislative analysts. Under one projection, for example, the annual distributions from the fund would actually be lower 21 years from now under, say, 6% withdrawals than 5%.

The analysis hasn’t yet been updated to reflect the proposal for 6.25% distributions.

Opponents say it isn’t worth it – that the fund is already a critical source of education funding and should be allowed to grow at its own pace and produce new revenue that way.

Supporters say the permanent fund has grown so fast in recent years that it’s reasonable to put more of the money to work now.

A proposal to increase withdrawals to 5.8% – but without specifying how to spend the revenue – passed the Senate in 2016 but died in the House, when Republicans held a majority in that chamber. Democrats have sharply expanded their majorities in both chambers since the 2016 election.

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