February 13, 2016

Permanent fund distribution increase quietly clears key committee

While everyone’s attention was on the driver’s license issue, the Senate Finance Committee relatively quickly passed a proposal to raise the amount taken from the Land Grant Permanent Fund for education. The proposed constitutional amendment passed on a party-line vote. This legislation requires a constitutional amendment because the Land Grant Permanent Fund is set up […]

Matthew Reichbach

While everyone’s attention was on the driver’s license issue, the Senate Finance Committee relatively quickly passed a proposal to raise the amount taken from the Land Grant Permanent Fund for education.

The proposed constitutional amendment passed on a party-line vote. This legislation requires a constitutional amendment because the Land Grant Permanent Fund is set up in the state constitution from when New Mexico became a state in 1912.

This is separate from the issue of tapping the permanent fund for early childhood education, a perennial issue for many liberal groups and one that has found its demise in the same committee.

“This year, I decided to separate the issues,” Sen. Michael Padilla, D-Albuquerque, said.

There were some questions and concerns, even though an amendment with what Padilla, called “safeguards” passed the committee.

The amendment would limit the additional 0.8 percent in distributions, to bring it to a total of 5.8 percent for ten years. At that point, it would sunset and need to be approved again. It also limited the distributions to if the fund had more than $12 billion in a rolling average of the previous 5 years. In other words, if the fund drops below a certain threshold, the extra distributions would stop.

“I want to protect the viability of the fund,” Padilla said.

Sen. John Arthur Smith, D-Deming, voted to pass the legislation but said his vote didn’t indicate how he would vote on the floor—and he then proceeded to say how he thought it was a terrible idea.

“I’m going to support this to move it on because I think it’s the House’s responsibility to start stopping some of this,” Smith said.
Smith saved most of his ire for the progressive groups that support tapping the land grant permanent fund.

“We’re going to put it on the floor because I’m sick and tired of the mailings that I get from some very, very left-wing groups that have no idea what they’re doing,” Smith said. “They are skirting paying taxes because they’re non-profits.”

The legislation now heads to the Senate floor. If the legislation passes the Senate and then the House, it would go to voters for approval in November.