New permanent fund proposed for early childhood education

Students at the United Way Early Learning Center at Aspen Community Magnet School last year. A new proposal to create a permanent fund for early childhood education received support Wednesday from Senate Finance Committee chairman Sen. John Arthur Smith.Luis Sánchez Saturno New Mexican file photo

RED RIVER — For the second straight year, New Mexico lawmakers will walk into their session in Santa Fe with a panoply of options on how to spend unprecedented state revenues.

While the 2020 legislative session is still four months away, one major proposal surfaced here on Wednesday: creating a new permanent fund for early childhood education.

Finance and Administration Secretary Olivia Padilla-Jackson proposed the fund during a presentation to legislators meeting in Red River.

Notably, Senate Finance Committee chairman Sen. John Arthur Smith said he also favors the idea. Support from both the administration and Smith could put the proposal on a path to approval in the next session.

“It should go through pretty quick,” Smith, D-Deming, said in an interview.

The idea comes after Gov. Michelle Lujan Grisham in the last session put her support behind a push to draw more money from the state’s Land Grant Permanent Fund to pay for early childhood education. That proposal, which has been long opposed by fiscal conservatives such as Smith, was defeated.

Padilla-Jackson said the state could hypothetically allocate around $300 million a year to build the fund to $1 billion within three fiscal years, and it could initially generate $50 million annually for early childhood education.

The new fund could work in a way similar to the land grant fund, receiving recurring revenue from specific oil and gas taxes when revenues from those taxes exceed their five-year average, Padilla-Jackson said. This would kick in after state reserves top 25 percent, she said.

The fund would differ, however, in that it would not be constitutionally protected like the land grant fund is, Padilla-Jackson said.

That would mean the Legislature could vote to tap the fund for other purposes in the event of a downturn without needing voter approval.

The proposal came as the Legislative Finance Committee released an analysis at Wednesday’s meeting reporting “mixed performance” from the state’s existing early childhood programs, noting a lack of coordination among providers.

“Too often in New Mexico the early childhood system reflects competition among providers for children instead of coordination and collaboration,” the LFC report said.

The report called on lawmakers to spend state resources in a way that avoids lowering teacher qualifications and hurting the effectiveness of programs.

Still, some lawmakers at Wednesday’s hearing were skeptical about potentially dedicating so much money to create a new fund, signaling that approval might not be easy.

Rep. Patricia Lundstrom, vice chairwoman of the Legislative Finance Committee, cautioned against committing to such a fund based on future projections and before the revenue actually has been received.

“I just don’t see why we need to run out and start doing this,” said Lundstrom, a Democrat from Gallup.

Rep. Rod Montoya, a Republican from Farmington, said he also was concerned about the proposal.

“The easiest way for us to help ourselves is to not go on a spending spree like we did last year,” Montoya said.

Rep. Javier Martinez, D-Albuquerque, said he was “encouraged by how far the discussion on early childhood funding has moved” but that “it’s going to take a lot more than $50 million a year to address the problem that we’re facing.”

Padilla-Jackson responded that the fund’s yearly allocation to early childhood education could exceed $50 million after the first few years.

During the initial period, the state could create “bridge funding” from the general fund to supplement the new fund, she said.

In addition to early childhood education, Smith said he favors devoting some of the new revenue to raise salaries to fill vacancies in state government.

The senator said he also wants to increase funding for higher education, including raising salaries to attract top professors and allocating more money to athletic programs.


Jens Erik Gould covers politics for the Santa Fe New Mexican. He was a correspondent for Bloomberg News in Mexico City, a regular contributor for TIME in California, and produced the video series Bravery Tapes.