That "Early Childhood Trust Fund" is headed to the Governor's desk soon and lawmakers and the Guv are doing much backslapping, but the fund comes with major catches. The catches are likely to prevent the $300 million fund from growing anywhere near the $1 billion supporters hope and maybe not growing at all.

The measure approved, Senate Bill 3, calls for a certain amount of energy-related tax collections to be diverted in years when total state cash reserves exceed 25% of spending levels.

Because of the unprecedented SE oil boom, for the next budget year the state for the first time will keep cash reserves of 25 percent. As the oil boom continues but naturally tapers off and recurring state spending increases--we've gone from $6 billion to $7.6 billion in two years--carrying a 25 percent reserve every year is near fantasy. Reserves of ten percent are normal, 25 percent is historic.

$20 million of the trust fund is slated to be appropriated in July of 2022 and $30 million a year each July after that. New Mexico is currently ranked last in the nation in child well-being in the Kids Count Data Report. If the initial $300 million grew with more cash injections, the amount of investment income available for early childhood would increase. Since the state is requiring that cash reserves hit 25 percent before the fund gets additional money what you see is probably what you get for the foreseeable future.

Also, the bill says if the state budget is threatened with deficit spending the early childhood fund could be raided:

. . . Money in the. .  fund may be expended in the event that general fund balances. . . will not meet the level of appropriations authorized from the general fund for a fiscal year. In that event. . .the legislature may appropriate from the fund to the general fund. . 

The early childhood trust fund is a baby step not a grand leap to provide universal pre-k and other programs for children ages zero to 5. The bill's sponsors, Rep. Doreen Gallegos and Sen. John Arthur Smith, have placed a nearly impossible hurdle to grow the fund in the manner of the $20 billion Land Grant Permanent Fund or to otherwise guarantee the new fund's permanence. Baby steps are fine, just don't call it walking the walk. Because it isn't.

HAIR PULLING REPORT

Here's one that will have both the left and right pulling their hair out. The left because it's about more nukes, the right because it shows that making New Mexico's economy noticeably less dependent on the Feds is a pipe dream:

The National Nuclear Security Administration, a semi-autonomous branch of the U.S. Energy Department, would see its budget increase by 18.4 percent to $19.8 billion next fiscal year, partly to ramp up production of plutonium pits at Los Alamos National Laboratory and Savannah River Site in South Carolina. Weapons spending would climb to $15.6 billion to help modernize the nuclear stockpile.

And then there's this:

. . . A 2019 economic-impact analysis. . . found that Sandia National Laboratories is responsible for creating 1,100 new jobs while contributing $509 million to New Mexico businesses and $96.6 million in state gross receipt tax revenue. The Economic Impact report also found that the Sandia contributes $784 million to small businesses in New Mexico and “manages economic development programs that leverage the people, technologies, and facilities of the Labs to deploy technology in support of Sandia’s mission and to create jobs.” 

So much for "diversifying" away from all that. Do we need to? How about cutting the crime, ramping up the education levels and encourage small business growth? Now that's "diversifying."

A TEACH-IN

Did you know:

In 2018, the number of current and retired public school employees in the Roundhouse surged to 16, according to legislative bios. 

We're sure they like making the rounds at the Roundhouse but the way things are going the retired teachers may have to be called back:

. . . Skyrocketing numbers of people with bachelor’s degrees (are) stepping into classrooms without teacher training. It’s a trend that syncs with a drop in the number of teaching candidates emerging from the state’s university education departments. But those teachers quit at much higher rates than traditionally trained teachers because, and like many beginning educators, they don’t feel properly supported for the rigors of the job. The teacher shortage plays out in the day-to-day lives of students through larger class sizes in some schools. . .

Teachers appear to be in store for another raise this year (4 or 5 percent) as Santa Fe continues to whittle away at the many vacancies.

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(c)NM POLITICS WITH JOE MONAHAN 2020