SANTA FE, N.M. (AP) — Early childhood programs would receive a dramatic funding increase under a legislative proposal to boost how much is paid out each year from one of New Mexico’s permanent funds.
A coalition of religious and education groups, business leaders, labor unions and social advocacy organizations on Thursday promoted a constitutional amendment that could generate an estimated $170 million in 2016. A third of the money initially would be earmarked for early childhood programs, including pre-kindergarten and child care, and all of the extra money would go for that purpose by 2018.
“This funding will put children on the path to success. That will provide me, as well as every other business out there, with a skilled pool of talent in the future,” said Victor Limary of Albuquerque, who operates a family-owned grocery and food service business.
The proposal would increase the annual payout from the more than $11 billion Land Grant Permanent Fund to 7 percent from 5.5 percent of the fund’s average five-year market value. The distribution is to drop to 5 percent starting in July 2016.
The fund receives royalties from oil and natural gas production and other income from land given to the state by the federal government.
Under current law, the Land Grant Permanent Fund will provide more than $550 million next year for schools and 20 other public institutions, including universities and state hospitals. Public schools receive a majority of the money.
Linda Lyle, superintendent of the New Mexico School for the Blind and Visually Impaired, said in a statement that the proposed 7 percent distribution rate is probably too high and that it’s “more realistic” to keep it at 5.5 percent or raised to 6 percent. The school relies on the permanent fund for its financing.
She said the school opposes adding a new beneficiary to the list of institutions that current receive money from the fund but would support more money for some pre-kindergarten programs.
The permanent fund was established to allow future generations to benefit from the state’s oil, gas and other natural resources that that will decline over time.
An analysis of the proposal by the State Investment Council, which manages the permanent fund, warns that the proposal over the long term “greatly increases the risk that the LGPF will not be able to continue to deliver the same benefits to the general fund and other beneficiaries as the fund does today.”
However, supporters of the proposal contend that annual payouts can be increased without jeopardizing the fund’s long-term financial footing.
“There are those who say permanent funds must be saved for the future, but what we’re talking about is the future — investing in the future,” said Patrick Themig, a retired utility company executive from Albuquerque.
Supporters concede the fund will grow more slowly if distributions are increased, but say that’s outweighed by potential gains from a better workforce, improved education and lower social costs if juvenile crime or poverty can be reduced.
“You put that money up front, and the return on investment you can’t get that anywhere else,” said Valerie Plame Wilson, a board member of the United Way of Santa Fe County and mother of twin 13-year-olds. Wilson is a former CIA operative whose cover was blown by a leak during former President George W. Bush’s administration.
The proposed constitutional amendment, if approved by the Legislature, would be decided by voters in the 2014 general election. The measure does not require the signature of the governor. Democratic majority leaders in the Senate and House are backing the proposal.