Tuesday, November 29, 2016

Argument Accelerates Over State's Big $15 Billion Permanent Fund, Plus: Other Voices And Ideas On Improving The State's Anemic Economy 

That was fast. We blogged a number of months ago that we expected in the years ahead a knock-down, drag out battle over taking more money out of the state's huge $15 billion Land Grant Permanent Fund to replenish the state's sagging general fund budget. Well, we're not going to have to wait years for the debate. Gov. Martinez is already fighting off Democrats who as a result of the election are in full command of the House and Senate. They are looking for revenue as she refuses to approve a tax hike under any circumstances:

Martinez wants incoming state lawmakers to know that the state’s permanent investment fund should be off limits from efforts to resolve a state budget deficit. Martinez and other members of the State Investment Council that oversees two sovereign wealth funds and $20.8 billion in assets discussed ways to tell newly elected legislators that the largest of its accounts - the State Land Grant Permanent Fund - should be managed as an endowment and not a rainy-day fund to be tapped in lean budget years.

Unless the state starts collecting enough revenue to stop the cutting and properly fund its public schools that $20 billion pot of money is going to prove irresistible and essential in keeping the state's doors open. Don't say we didn't tell you.

(By the way, a Constitutional Amendment to tap the $15 billion permanent fund requires only the approval of a simple majority of the House and Senate. It is then placed on the general election ballot for voter approval. The Governor is dealt out. Her approval is not required).

On the economy, a reader writes:

Hi Joe. I've moved from NM but still enjoy reading your blog. I didn't see you pick up on this article from the NY Times, so I figured I'd share it. NM is surrounded by states in the southwest that retain and attract college graduates. I left NM after many years as a professor at UNM. I now teach very similar students in another state. My current students aren't significantly different from UNM students, yet they are able to obtain much better opportunities upon graduation. The NM lottery scholarship has helped encourage more people to attend college within their home state, but they simply aren't able to find good opportunities upon graduation. Thanks for keeping us all informed. It makes me sad to see NM's economy go from bad to worse, but it is still valuable to follow what is going on.


Former Dona Ana County Dem state Senator Steve Fischmann writes with a different take on the lottery scholarship:

Repeal and replace the lottery scholarship. The average lottery ticket buyer has a family income of $40,000 or less. The average lottery scholarship recipient has a family income of $80,000 or more. Lottery ticket buyers pay $140 million annually to create just $40 million in scholarships for people who are less needy than they are. An efficiently funded, needs-based scholarship program is what New Mexico truly requires.

A reader writes:

Joe, I've been a loyal reader for many years. I read with much interest the article about the need for reforming the liquor license allocations and what a hindrance it is to small businesses that simply cannot afford them. They are at a distinct disadvantage to larger companies that can pay as much as $400,000 for a license. I understand that those who paid for these licenses are fiercely protective of their value, and who can blame them? But the system of quotas is terribly outdated and simply should be changed so that small businesses and owner operated establishments can compete. 

One solution would be to levy a tax of about 10% on liquor by the drink and use that money to buy up the existing licenses and cancel them, replacing the system with a license that is accessible to any responsible business no matter what their size. This would compensate those who invested in these licenses, and the tax could be canceled as soon as the existing licenses were purchased back from the owners. 

This may seem like a small thing to many readers, but it is actually one of many small things that leave us in a competitive disadvantage to our neighbors. We have to start somewhere. I for one would love to see many small chef owned restaurants and bars that can be on an equal footing with the big guys….Just like the many places I frequent in Arizona, Texas, and Oklahoma.

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