San Juan County lawmaker says state's Legacy Fund will likely receive sizable allocation

A San Juan County legislator who was instrumental in securing the passage last year of the Land of Enchantment Legacy Fund, a dedicated funding stream for conservation, said he believes chances are good the fund will receive a significant infusion of cash this year that will sustain it on a permanent basis.

State Sen. Steve Neville, R-Aztec, said two proposals regarding appropriations for the fund already have been submitted to the New Mexico Legislature as it prepares to open its 2024 session on Jan. 16. The first is a recommendation by Gov. Michelle Lujan Grisham that $250 million be transferred to the Land of Enchantment Conservation Fund, which feeds into the Land of Enchantment Legacy Fund, from the general fund. The second is a recommendation by the Legislative Finance Committee that $300 million be transferred to fully capitalize the conservation fund.

“That’s good,” Neville said of the governor’s recommendation. “There’s $300 million in the LFC recommendation, so that’s even better. … I’m certainly happy with either one.”

Neville was one of a handful of lawmakers who worked for five years to get the Legacy Fund established, a battle they finally won last year when Senate Bill 9 was passed by the Legislature and signed by the governor. The fund is designed to provide a dedicated state funding source for land and water stewardship, forest and watershed health, outdoor recreation and infrastructure, agriculture and working lands, historic preservation and wildlife species protection.

Supporters of the measure argued that New Mexico long had been missing out on federal matching funds for such projects. The creation of the Legacy Fund now allows the state to apply for tens of millions of dollars in federal grants that it did not qualify for before the fund was established.

But SB 9 only capitalized the fund at $50 million, significantly less than the $300 million or $350 million that supporters have argued is required to capitalize the fund in perpetuity. The fund will run dry by Fiscal Year 2029 without additional capitalization, supporters have said.

Neville said both the governor’s proposal and the LFC recommendation would allow the fund to reach that targeted level of capitalization. He said he’s confident that at least one of those proposals will be adopted by lawmakers this year, pointing to the fact that state coffers are flush again with oil and gas revenue.

“I think one or the other will make it,” he said. “There’s tons of extra money this year, and we’ve done a good job for the last five years of setting aside money for permanent funds.”

Neville said the state’s Tax Stabilization Fund, more commonly known as the rainy day fund, has approximately $1.5 billion in it, while the Early Childhood Education and Care Fund is approaching $10 billion in capitalization, which he said essentially makes it overfunded.

“We need to do some tweaking legislatively,” he said of those fund balances.

The time is now to fully capitalize the Legacy Fund, Neville said, noting that the surplus of oil and gas revenue the state has experienced for the past few years is only a temporary situation.

“Oil and gas isn’t going to last forever,” he said. “The price is going to drop or something’s going to happen. … If you don’t do some of this (increased capitalization for permanent funds) now, you’re going to shift the burden of that to future taxpayers.”

Perhaps the best reason to full capitalize the fund, he said, is the return on investment it is likely to generate in terms of those aforementioned federal dollars. State officials anticipate the fund will generate a 5% return each year, coming out to approximately $15 million that can be spent on projects around New Mexico. By the time those federal matching funds are applied — often at a rate of three to one or four to one from the state’s share — those projects can receive an additional $45 million to $60 million, he said.

At that rate, the state would be making up its potential $300 million investment in just a few years, Neville said.

“That lets us get a lot of projects done we’ve been wanting for a long time,” he said, noting the money can be used on fire-mitigation or drought-resistance projects, both of which have become increasingly important in New Mexico in recent years.

A broad coalition of groups continues to advocate for increased capitalization of the fund, including the Rio Grande Chapter of the Sierra Club, the Western Landowners Alliance, Trout Unlimited, the Trust for Public Land, the New Mexico Association of Conservation Districts, the New Mexico Acequia Commission, the New Mexico Food & Agriculture Policy Council and the New Mexico Wildlife Federation.

Dan Roper, the program lead for Trout Unlimited, issued a Jan. 5 statement in support of the funding recommendation from the governor’s office.

“A sizable investment in the Land of Enchantment Legacy Fund will result in healthier rivers and watersheds, more open spaces conserved, and more jobs created in a growing restoration-based workforce,” he stated in an email. “The investment would also mark a huge step forward for conservation in New Mexico and we applaud the Governor and legislative leaders for prioritizing conservation funding in the upcoming legislative session.”

Mike Easterling can be reached at 505-564-4610 or measterling@daily-times.com. Support local journalism with a digital subscription: http://bit.ly/2I6TU0e.

This article originally appeared on Farmington Daily Times: Sen. Steve Neville says time is now to fully capitalize NM Legacy Fund