New Mexico has an obligation to its people. The Journal, as the paper of record in New Mexico, needs to get it right; in their Dec. 23 editorial statement their description of the Land Grant Permanent Fund was not accurate.
The fund continues to grow. The state doesn’t take a full 5 percent annually. What is withdrawn is a 5-year rolling average; the annual withdrawal is closer to 4.6 percent.
Comparing the fund to university funds is also erroneous. The fund grows by two sources, income from oil and gas (though prices are down, volume is up) and return from Wall Street investments. Combined, the income is 10.8 percent annually.
Also, university funds don’t have billions of barrels of oil behind them. New Mexico sits over the Permian Basin, one of the largest oil reserves in the world.
Most importantly, universities don’t have a state Constitution mandate to educate the children.
Increasing distribution by an additional percent for early childhood will not jeopardize the fund. The fund is strong; it has withstood the Great Recession, a drop in oil and gas prices and is still growing. The fund is $15 billion; it is the third largest in the country.
We are looking to diversify our portfolio and invest one percent in our children. Professor James Heckman, a Nobel Prize winning economist, has analyzed the cost benefit ratio for investments in human capital, with the conclusion that the life-cycle benefits of high quality, wrap around early child programs for disadvantaged children ages 0 to 5 found a 13 percent return on investment.
The approach must include parental involvement, high quality full-day care, home visiting and other services in a well-coordinated “scaffolding” of developmental support. Savings were found in high school graduation, employment, income and health.
The issue of our children is so important state Sen. John Arthur Smith, chairman of the Senate Finance Committee, has indicated the existence of a narrow goal post through which the sponsors can kick the proposed legislation. Additionally, in the 2015 accountability report on early childhood, the Legislative Finance Committee noted: “Research indicates the most rapid period of brain development occurs in the first few years of life … . This means the earliest years may present the most significant opportunity but also the highest risk … Research also shows that later interventions may be less successful. As a result, programs that identify and support children and families who are most-at-risk for experiencing highly stressful environments can reduce or avoid the need for more costly and less effective remediation and support programs later.”
The long-term solution to New Mexico’s economic problems is to change the graduation rate resulting in a work force that attracts companies to New Mexico. Early childhood education and care is part of the formula of changing the state in the long run.
CHI St. Joseph’s Children doesn’t take government money, as one of the largest private trusts in the state we use 5.5 percent of our trust for free services for the children of New Mexico.