Severance tax fund solvency bill clears Senate committee

A bill designed to address the solvency of the Severance Tax Permanent Fund passed the Senate Indian and Cultural Affairs Committee with no recommendation on Monday on a 4-2 vote. The legislation passed despite opposition from groups representing Native American tribes, which argued that the cuts to payments from the fund to the tribes would […]

Severance tax fund solvency bill clears Senate committee

A bill designed to address the solvency of the Severance Tax Permanent Fund passed the Senate Indian and Cultural Affairs Committee with no recommendation on Monday on a 4-2 vote.

Oil rig in southeast New Mexico. Photo by Margaret Wright
Oil rig in southeast New Mexico.
Photo by Margaret Wright
The legislation passed despite opposition from groups representing Native American tribes, which argued that the cuts to payments from the fund to the tribes would have an adverse effect.

Rep. Jason Harper, R-Rio Rancho, sponsored the legislation and said that without action that there was a good chance that the permanent fund would go bankrupt. He cited a Monte Carlo simulation that said the fund has an 84 percent change of going bankrupt in decades if there are no changes made.

“Without this fund, we would be talking about cutting $100 million from our general fund budget this year instead of spending $83 million,” Harper said, of the importance of the fund.

Harper’s bill—which is co-sponsored by Sen. Carlos Cisneros, D-Questa—would shave around 11 percent off of all the beneficiaries of funding from the severance tax fund.

Severance tax funds come from oil and gas drilling, which is the funding from “severing” the resources from public lands. Of the funds, 50 percent go to the “senior bonds” which include capital outlay projects, tribal infrastructure funds and funding for colonias. Another 45 percent goes towards schools.

“We’re decreasing the pie size for each of those groups slightly and phasing that in over four years,” Harper explained.

Cisneros said it was all about keeping the permanent fund for “the children of the future.”

“We’re looking at not so much as harming anybody… but rather to save and to salvage the permanent fund as we know it,” Cisneros said. “If we continue to erode, we’re not going to have the opportunity to spend money, we’re not going to have the opportunity to build infrastructure around the state.”

Sen. Benny Shendo, D-Jemez Pueblo, opposed the changes because of the cuts in payments to the Tribal Infrastructure Fund. He noted that he was part of the team that created the fund, also known as TIF. Shendo was the Cabinet Secretary of Indian Affairs when the fund was created.

“It’s been a great vehicle [for] investment,” Shendo said.

“I think all of us want to make sure that this fund survives but at the same time, I think the funding mechanisms for TIF and colonias is in such infancy,” Shendo said. He expressed a wish that these funds be held harmless in the reduction.

Harper noted that his legislation also tries to correct for the large swings in how much money is paid into the fund. Currently, the money taken from the fund is using the previous year’s funds.

The legislation would use the lesser of last year and this year “to help bring the extremes of the pendulum” back to the center according to Harper.

The bill now heads to the Senate Corporations and Transportation Committee, but Senate Minority Leader Stuart Ingle, R-Portales, looked forward to the bill’s assignment to the Senate Finance Committee.

Ingle noted there are other pieces of legislation related to the Severance Tax Permanent Fund that are pending in the Senate Finance Committee.

“We can come to a compromise that will work well,” Ingle said.

The legislation passed the House on a 38-29 vote last week.

We're ad free

That means that we rely on support from readers like you. Help us keep reporting on the most important New Mexico Stories by donating today.

Related

Both Republicans and Democrats skeptical of guv’s proposals for special session

Both Republicans and Democrats skeptical of guv’s proposals for special session

A representative from Gov. Michelle Lujan Grisham’s office outlined on Thursday the bills the governor’s office will back during the upcoming special session, but…
Senators throw support to embattled Ivey-Soto

Senators throw support to embattled Ivey-Soto

By Justin Horwath, New Mexico In Dept Sen. Daniel Ivey-Soto is running for a fourth term despite the state Democratic Party’s decision to censure…
AG announces legislative priorities for upcoming special session

AG announces legislative priorities for upcoming special session

Attorney General Raúl Torrez announced on Thursday his legislative priorities for July’s special legislative session, including the creation of a crime victim’s unit to…
PNM seeks rate increase

PNM seeks rate increase

Customers of New Mexico’s largest electric utility may pay more for energy in the future. The Public Service Company of New Mexico filed an…
DOE announces funding to help bring technologies to market

DOE announces funding to help bring technologies to market

National laboratories across the country, including Sandia National Laboratories, will use millions of dollars in federal funding to spur the deployment of projects related…
LANL plans to release highly radioactive tritium to prevent explosions. Will it just release danger in the air?

LANL plans to release highly radioactive tritium to prevent explosions. Will it just release danger in the air?

By Alicia Inez Guzmán, Searchlight New Mexico Last fall, the international community rose up in defense of the Pacific Ocean. Seafood and salt purveyors,…
Stansbury outlines funding secured for early childhood and youth services programs

Stansbury outlines funding secured for early childhood and youth services programs

U.S. Rep. Melanie Stansbury secured $8.3 million for childhood development and youth services in the 1st congressional district through federal community project funding. Stansbury,…
Amid new graduation requirements, what do high schoolers want to learn?

Amid new graduation requirements, what do high schoolers want to learn?

By Margaret O’Hara, The Santa Fe New Mexican The main things that bring Brayan Chavez to school every day: Seeing, talking to and engaging with…
Special ed teachers hope lawmakers OK pay raises, admin changes

Special ed teachers hope lawmakers OK pay raises, admin changes

By Margaret O’Hara, The Santa Fe New Mexican Brittany Behenna Griffith has a laundry list of adjectives to describe the ideal special education teacher:…
Heinrich questions FDA leadership on baby formula safety, mifepristone

Heinrich questions FDA leadership on baby formula safety, mifepristone

U.S. Food and Drug Administration Commissioner Dr. Robert Califf answered questions about the safety of human milk formula and mifepristone on Wednesday. Sen. Martin…
Health workers fear it’s profits before protection as CDC revisits airborne transmission

Health workers fear it’s profits before protection as CDC revisits airborne transmission

Amy Maxmen, KFF Health News Four years after hospitals in New York City overflowed with covid-19 patients, emergency physician Sonya Stokes remains shaken by…
Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Gov. Michelle Lujan Grisham announced Friday $10 million in funding from the federal American Rescue Plan Act was awarded to six tribal nations and…
Abortion medication access remains after Supreme Court ruling

Abortion medication access remains after Supreme Court ruling

The U.S. Supreme Court ruled against the Texas-based Christian group trying to restrict access to abortion medication on Thursday. The case, FDA v. the…
How abortion care has changed since Dobbs 

How abortion care has changed since Dobbs 

In the month of March 2024 alone, 1,650 clinician-provided abortions took place in New Mexico, according to the reproductive research organization, the Guttmacher Institute.…
Many Democrats endorsed by reproductive rights group won primaries

Many Democrats endorsed by reproductive rights group won primaries

With nearly 53 percent of the precincts reporting as of 11 p.m. Tuesday, most of the legislative candidates endorsed by Planned Parenthood Votes New…
New Mexico food banks say food insecurity is on the rise

New Mexico food banks say food insecurity is on the rise

Food insecurity is on the rise as state benefits have decreased and the future of federal benefits have an uncertain future.  Sonya Warwick, director…
Abortion medication access remains after Supreme Court ruling

Abortion medication access remains after Supreme Court ruling

The U.S. Supreme Court ruled against the Texas-based Christian group trying to restrict access to abortion medication on Thursday. The case, FDA v. the…
How abortion care has changed since Dobbs 

How abortion care has changed since Dobbs 

In the month of March 2024 alone, 1,650 clinician-provided abortions took place in New Mexico, according to the reproductive research organization, the Guttmacher Institute.…
Republican Herrell signs onto what critics call anti-transgender message

Republican Herrell signs onto what critics call anti-transgender message

Republican candidate Yvette Herrell, who is running against Democrat Rep. Gabe Vasquez for New Mexico’s 2nd Congressional District seat, committed herself to a message…
Post-primary, Biden leads Trump in NM

Post-primary, Biden leads Trump in NM

President Joe Biden leads former president Donald Trump in the race for New Mexico’s five electoral seats, according to a poll commissioned by NM…
Democrats announce spending on CD2 race

Democrats announce spending on CD2 race

The Democratic National Committee announced on Monday that it will spend $70,000 for organizing staff to aid U.S. Rep. Gabe Vasquez, the Democrat trying…
Heinrich leads U.S. Senate race as general election campaigning starts

Heinrich leads U.S. Senate race as general election campaigning starts

Incumbent U.S. Senator Martin Heinrich starts the general election for his second reelection campaign ahead by seven points over his Republican challenger. According to…
Post-primary, Biden leads Trump in NM

Post-primary, Biden leads Trump in NM

President Joe Biden leads former president Donald Trump in the race for New Mexico’s five electoral seats, according to a poll commissioned by NM…
New Mexico food banks say food insecurity is on the rise

New Mexico food banks say food insecurity is on the rise

Food insecurity is on the rise as state benefits have decreased and the future of federal benefits have an uncertain future.  Sonya Warwick, director…

GET INVOLVED

© 2023 New Mexico Political Report