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Monday, August 18, 2025The $64 Billion Question (Cont.) State Investment Heavies Upset After Haaland Ponders Tapping Reserves; Call Plan "Alarming" But Pressure Could Grow As State Econ And Social Challenges Mount The money in the question is the immense amount of cash stuffed away in state reserves. The question is whether to make it work harder as proposed recently by Dem gubernatorial candidate Deb Haaland. We reported last week that on social media Haaland somewhat nonchalantly targeted deploying some of those reserves to avoid more "ghost towns" in declining rural New Mexico. She did not directly mention abominable social conditions like widespread drug addiction, crime spikes such as the one in Española that prompted MLG to call out the National Guard or more horrific child abuse cases. The latter has again prompted CYFD critics like Marilyn Beck of New Mexico's Child First Network to deplore the continued incompetency at the agency. This, in the aftermath of six more shocking child killings in just the last four months, including a one year old who ingested a dropped fentanyl pill belonging to her drug-addled mother. Each of these cases had CYFD involvement. This is is heavy stuff in a state with oil-generated surpluses that have given it tremendous financial power to do what it pleases. But record increases in funding for public education--the touted Democratic "moon shot" that barely got off the launch pad--and the stonewalling of reform efforts at PED and CYFD--have left the state where we began at the start of the boom--last in the nation in just about all key social standings. HOW LONG?
The State Investment Council, manager of the massive wealth, is well-aware of the deeply troubling contrast between our booming finances and the deteriorating conditions of many of its citizens. The SIC has been "protecting" those funds for decades from what they see as ill-advised attempted "raids." They are nowhere near to pivoting in Haaland's direction as seen in this statement from an SIC spokesman reacting to Haaland's money bomb: Joe, State Investment Officer Jon Clark was giving an update to the legislative Investment Pensions Oversight Committee the morning your blog about the state reserves came out – which makes your column pretty timely. As you point out, it’s been a few years of major, unprecedented growth for the permanent funds and other endowments managed by the Investment Council, but even more importantly, the benefits those funds produce for New Mexicans every year have also exploded, tripling in size over the past decade to $2.57 billion for FY26 – a number which we expect to grow every year. That currently accounts for about 28% of K-12 funding and 78% of Early Childhood funding. It’s not always well understood that these funds aren’t just locked in a vault somewhere but are actually being invested to grow and deliver incredible benefits to New Mexico every year. In fact, we project these funds will return $38 billion to the state over the coming decade. That’s why it can be a bit alarming when people on social media talk about “spending half” of the funds to meet the state’s needs, not understanding that if done in a haphazard way, it’s akin to killing the golden goose. We have not seen statements where "spending half" of that $64 billion is recommended, but it speaks to the point about how attitudes toward those savings may indeed be changing. And that could set up another epic battle at the Legislature. We say another battle because we're reminded of efforts to tap the state's Land Grant Permanent Fund-- now over $30 billion--for about $150 million a year for mostly early childhood education. After a decade of debate lawmakers were finally worn down and in 2022 sent to the voters a constitutional amendment that allowed the draw down of the fund. It won overwhelming approval. This came after Santa Fe power players fell far behind what a majority of voters wanted. It took a progressive coup of Senate conservatives at the '20 primary elections to break their hold on the amendment. THE TROUBLE TODAY  What is troubling about this possibly new financial paradigm relates to the failure of the current one, The stagnation of PED, the CYFD disaster, the fentanyl scourge, the too-high crime rate and an anemic business environment have gone unabated even as the cash spigot is open wide. Beck points out that the problem is a stuck state government, lacking accountability and poor targeting: Joe, have you read the LFC program evaluation on home visiting? Less than 9% of families referred actually “complete” their program. I’m curious to watch the LFC's accountability report of the early chidhood department this week because ECECD seems highly ineffective no matter how much money they have. That take from Beck is especially worrisome because the constitutional amendment money for very early childhood (ages 0-5) and home visiting started to roll out in July of 2023--over two years ago. Beck agrees that comprehensive home visits could be an additional vital link in discovering dysfunctional homes and halting the violence that so many kids continue to be subjected to and that CYFD has been helpless to resolve. MORAL HGH GROUND  The rejoinder is that today's failure does not have to be tomorrow's. That it is morally imperative that the locked up money be used in an effort to improve and save lives--whether success is guaranteed or not. Still, voters probably would not be attuned to the subtleties, disgusted as as they are from reading nonstop of the latest depressing and morbid crimes. Their support for the early childhood amendment demonstrated that if given the chance to do something, do anything, they'll grab it fast. So right now it's a two-pronged challenge--accountability and targeting. That accountability and effective implementation of current home visiting as it relates to targeting child abuse as well as early education performance has to come from the LFC, other appropriate legislative committees, the Governor's office and the early childhood department. The CYFD needs attention from all of the above plus perhaps the attorney general's office as these child abuse cases are now so awful that criminal negligence could be in play. Also, the AG is in charge of the new Child Advocate Office, overseeing CYFD and will have to ensure it does not turn into a toothless wonder. As for the $64 billion put on the table by Haaland, there's no taking it off now that it has been linked to the state's gross under performance. The 21st century has rushed past this state. The last question today over the $64 billion is whether a serious gubernatorial debate will occur about finally meeting up with it. This is the Home of New Mexico Politics. |
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