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Sep. 28—You've just won the lottery and are rolling in so much dough you don't know how you're going to spend it all. Then, despite being flush with cash, the next thing you do is to tap into your 401(k) retirement account.
Well, of course you wouldn't do that because it makes absolutely no sense.
But that's exactly what Gov. Michelle Lujan Grisham and legislative Democrats are urging New Mexicans to do in November 2022 when they vote on a constitutional amendment that would tap the state's Land Grant Permanent Fund for an extra $2 billion over 10 years to fund early childhood programs and k-12 education — despite record revenue surpluses.
If ever there was a good argument to siphon extra cash from the permanent fund — fueled by oil and gas revenues and wisely established years ago looking toward a time when those resources that pay for a big chunk of the state's operating expenses are significantly diminished and depleted — it's been washed away by a flood of new revenue.
"There's going to be a lot more money than we know what to do with in the next few years," Sen. George Muñoz, D-Gallup and vice chair of the state Legislative Finance Committee, said during a recent committee discussion on education.
Muñoz went on to note that dynamic "won't last forever." One could argue that nothing does, but his point is yet another one on the wisdom of leaving the additional money in the permanent fund — where it will continue to grow until we actually need it.
A bit of context.
Estimates released earlier this month by executive and legislative economists project New Mexico lawmakers will have a staggering $1.4 billion in projected revenue in excess of current spending levels — a number that would boost the state budget from its current $7.4 billion to $8.8 billion. That's billions with a "b."
That surge is fueled to a great extent by oil production — New Mexico is now second only to Texas — and natural gas. All this in a New Mexico economy that looks as anemic as the budget picture looks strong.
On top of that, the projected revenue total doesn't include more than $1.5 billion expected to flow into relatively new "rainy day" and early childhood endowment funds over the next two years under changes enacted in 2017 and 2020 to set aside money in cash-flush years. Those funds will be so flush with cash that lawmakers are now talking about capping how much flows into them.
And it doesn't include roughly $1.75 billion in federal COVID-relief funds that have only been partially earmarked by the Lujan Grisham administration. Some of that money, depending on either negotiations or the courts, could also be available for lawmakers to appropriate. But it will get spent, one way or another.
Against this backdrop, voters will decide whether to increase the distribution of the Land Grand Permanent Fund from 5% a year — money that largely funds schools and universities — to 6.25%, generating an estimated $200 million a year in extra money for early childhood programs and other beneficiaries.
Largely along party lines, legislators this year approved putting the constitutional amendment on the ballot in 2022.
Not only do we have more money than we know what to do with, voters would do well to remember the state is already spending significant amounts on early childhood programs ranging from family visits to pre-K, programs that have been ramped up dramatically in recent years. Not to mention the point made by Sen. Bill Tallman, D-Albuquerque and a rare Democrat skeptic when it comes to tapping the fund, who wondered whether we could spend all the new money from the permanent fund effectively.
And that was before the most recent revenue projections.
By the time the election rolls around, there will be high-profile issues, campaigns and traditional mudslinging. A dollars-and-sense issue like this ballot question could easily get lost in the hoopla. It shouldn't.
Drilling deeper into the fund isn't just unnecessary, it's irresponsible. It is, in fact, a lot like tapping your retirement account after winning the lottery.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.