Gov. Martinez To Lawmakers: Permanent Fund Not A Budget Fix
New Mexico Governor Susana Martinez reminds incoming state lawmakers that the state's $20.8 billion permanent investment fund should be off limits from efforts to resolve a budget deficit.
Gov. Martinez wants the newly-elected legislators to know that the State Land Grant Permanent Fund should not be tapped as a fix to lean budget years. So in a discussion that she had last Tuesday with the State Investment Council that oversees two sovereign wealth funds and $20.8 billion in assets, they deliberated on how to tell the lawmakers to manage the permanent fund as an endowment instead as a budget fix.
With the budget difficulties being faced by the state, the incoming Democratic majority in the Legislature is considering whether to tap into the fund to supplement educational spending or help mobilize capital for small businesses.
The governor, who opposed to any tax increases, blamed the state Senate for its failure to resolve the issue on the budget during a special session in October.
"The Legislature did not finish as much as they could have in fixing the deficit that is a result of the drop in the price of oil and gas," said Gov. Martinez.
She stated that the Senate could have done more about the matter so that there will be no need to resort to raiding the permanent fund.
Beneficiaries like public schools and universities currently receive a 5 percent annual distribution from the $15 billion permanent fund. This is the lowest distribution rate over a decade.
Efforts to increase distributions to education initiatives from the $15 billion permanent fund have caused political conflict over the past years.
In February, Republican lawmakers prevented a proposal for a constitutional amendment which would have sidestepped the governor, and instead pursues for the voters to decide on the increase of fund distributions for education.
New Mexico Voices for Children Executive Director James Jimenez said that there will be a new proposal once the legislature reconvenes in January. The proposal will be pushing for an increased permanent fund distributions to early education and K-12 initiatives.