Friday, March 7, 2003
Senate Backs Amendment to Fund Education Reform
By David Miles
Journal Capitol Bureau
SANTA FE The Senate on Thursday reversed course and approved a proposed constitutional amendment to increase annual income distribution from the Land Grant Permanent Fund to pay for education reforms.
The measure (floor substitute for SJR 6), which the Senate approved on a 28-14 vote, goes to the House for consideration. Constitutional amendments are subject to legislative and voter approval but do not require the governor's consent.
The proposal has been controversial because many lawmakers consider the permanent fund a "rainy day" account, or endowment, reserved for future generations of New Mexicans.
The Senate last week narrowly defeated a proposal to increase the annual distribution from the land grant permanent fund from 4.7 percent to 6 percent of the fund's five-year average market value.
On Thursday, Senate Majority Leader Manny Aragon, D-Albuquerque, amended the proposal to immediately increase the annual distribution to 5 percent. It then would increase to 5.8 percent starting in the 2005 fiscal year for eight years.
The distribution rate then would drop to 5.5 percent for the next four years, after which time it would decrease to 5 percent.
Sen. Cynthia Nava, a Las Cruces Democrat and chief sponsor of the constitutional amendment, said the proposal would generate an additional $78 million a year for school reforms during the period when the distribution rate would be boosted to 5.8 percent.
Aragon's amendment would prevent the distribution rate from going higher than 5 percent if the five-year average market value of the permanent fund dropped below $5.8 billion. The fund was valued at $6.3 billion at the end of last year.
Gov. Bill Richardson, who helped negotiate the changes with Republican senators, noted that the proposal won bipartisan support on Thursday.
"It's time we invested our funds into New Mexico education instead of Wall Street," the Democratic governor said at a news conference in his office.
Several Republicans unsuccessfully tried to place additional fiscal safeguards on the constitutional amendment and said the proposal amounted to a raiding of the permanent fund.
"This is a tax increase on the next generation," said Sen. Allen Hurt, R-Waterflow.
Sen. Joe Carraro, R-Albuquerque, said Attorney General Patricia Madrid on Thursday recommended that legislators seek congressional approval before increasing the distribution rate from the permanent fund.
In a letter to Rep. Max Coll, D-Santa Fe, Madrid said if legislators do not receive congressional approval, the proposed constitutional amendment might conflict with a 1910 federal law that granted certain lands to New Mexico.
"Any federal law that appears to conflict with New Mexico law may give rise to litigation that may be lengthy, costly and not necessarily have a favorable outcome," Madrid wrote.