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Wednesday, August 17, 2022

Bear Market No Match For New Mexico's Oil Gusher; Giant Permanent Fund Holds Up As Markets Tank; Impact On Education Amendment On Nov. Ballot Weighed  

Even the bear market in stocks can't stop the state's gargantuan Land Grant Permanent Fund as the SE oil gusher makes up for much of the downturn in the Fund's stock holdings. 

For the year ended June 30 the Fund finished with a balance of $24.4 billion, down a mere 2 percent, compared to deep double digit losses in the major stock averages. 

Sky high royalty and tax collections from the oil boom softened the bear's impact and will continue to do so as the Permian Basin is now one the most preferred drilling sites in the world.

At the end of 2019 the Fund, established before statehood, had a balance of $19.7 billion and is now up 24 percent since then. 

The Fund's performance is important to the state budget, with interest from all those billions going into the General Fund each year. The latest performance numbers also have major political impact. 

On the November 8 ballot voters will decide a constitutional amendment that would increase the amount taken annually from the Fund from 5 percent to 6.5 percent and purpose it for early childhood programs and public school education.

If the amendment is approved the state estimates early childhood programs would get over $126 million, public schools $85 million and other Fund beneficiaries $34 million. Those totals would grow each year, if the Fund continues to increase. 

The hope is that the new investment will make a dent in the state's bottom of the barrel education standing and aid in reversing generations of family dysfunction that have contributed to those low rankings.

The stability of the Fund in the face of Wall Street's downturn and a planned multi-million dollar media blitz in support of the amendment puts it on a strong footing for passage. That and polling that shows the public overwhelmingly in favor of the proposal. 

While GOP primary Guv contender Rebecca Dow favors the amendment, GOP nominee Ronchetti does not. MLG has been a longtime supporter. 

Opponents, who claim the Fund could have smaller outlays in the future if more is taken today, have no formal organization to oppose the amendment while the amendment supporters have a coalition of activist groups running a campaign in its favor.

The CHI St. Joseph's Children and Kellogg Foundation are two of the major financial contributors to that campaign that expects to launch its media blitz in September. 

The presence of the amendment could also benefit MLG and other Dem candidates by encouraging more Democratic and independent women to go to the polls. The amendment is expected to finance home visits for newborns, child care, pre-K and more. 

STILL LAST BUT. . . 

Amber Wallin
In the 2022 Kids Count Data Book New Mexico ranks 50th in the nation in childhood education. NM Voices For Children said in a news release that some of the poor showing was due to recent positive changes not yet being measured. The group did not take note of the upcoming amendment referendum in that release  because it is a political issue that they prefer not to mix with the Kids Count reports. But separately Voices executive Director Amber Wallin says:

Joe, (The rankings) are based on older data. . .The state has raised wages, created a new child tax credit, doubled a tax credit that goes overwhelmingly to low-income workers with kids, temporarily expanded child care assistance and significantly increased classroom funding. . .It is important to point out that the sea change we have seen in recent years is not yet reflected in the data and we expect it will improve well-being in the state. 

The most impactful step voters can directly take to improve child well-being is to vote to approve Constitutional Amendment #1 on the November ballot/ That's a key step in ensuring families can afford child care, that new parents get connected to home visiting services and that public school classrooms have the resources they need. NM has a long way to go to improve child well-being in the state, but recent policy progress means we're headed in the right direction, with the Permanent School Fund constitutional amendment the next boost we need to give our kids the best possible opportunities.

THE BOTTOM LINES

President Biden Tuesday signed what is being called landmark legislation. Dem US Reps. Melanie Stansbury and Teresa Leger Fernandez earlier conducted a news conference on the impact of the Inflation Reduction Act. Both emphasized climate change provisions in the legislation, pointing to the drought and wildfires that the state has endured. That full news conference is here.

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(c)NM POLITICS WITH JOE MONAHAN 2022
 
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