Special Interest Raid of the Land Grant Permanent Fund Is New Mexico’s War on Children

  • Post published:January 25, 2016
  • Post category:News

While enrollment in New Mexico’s schools has been relatively consistent, the education budget has increased by almost $900 million in the last 12 years. Over one-third of that increase came from the LGPF.

Where does the education money go?

The fact that 40 groups are pushing for over $1 billion in additional LGPF disbursements provides a clue. Under the Children, Youth and Family Division, these groups are receiving or seeking funding for such services as childhood health screenings, prenatal care, and birth to pre-kindergarten care among other things.

While these services provide for well-rounded children, many should be handled under health care. Medicaid covers these services with other tax dollars, so there is no need to fund them in the education budget. Nor would that type of funding be appropriate because it is unconstitutional.

Gary King, former Attorney General, reviewed the federal constitutional requirements for the LGPF and confirmed that: 1) the state constitution directly prohibits the state from using money from the LGPF for private entities; and 2) distributions from the LGPF must be limited to learning programs provided by public schools. This was recently confirmed by the Rodey Law Firm.

There are some companies and nonprofits providing services that the state cannot. But New Mexico is on a slippery slope funding private entities under the guise of ‘education’. If the funding is coming from LGPF distributions, the state is in direct violation of federal requirements. Regardless of the funds’ source, we have serious accountability issues because our education results are dismally low.

New Mexico continues to be ranked among the worst of all states for educational achievement. Many young adults leave school unable to read or grasp basic math skills. Recent reports show we’ve made some improvement, but New Mexico is still ranked 49th.

Will additional funding fix our educational system?

The facts speak for themselves. New Mexico ranked No. 3 on an index that measures the equitable distribution of funding per pupil. More money is obviously not the answer, but how we spend it may be. If we invested in competitive teachers’ salaries and quality educational materials for our children rather than special interest groups, we may see our children become New Mexico’s future entrepreneurs and workforce.

What New Mexicans desperately need is accountability for the funds currently being spent. We’ve increased funding significantly, but many of our children are still failing to meet minimum standards. Who’s responsible for this failure?

The LGPF distribution rate is scheduled to drop to five percent in FY2017. That is considered a prudent rate to protect the corpus of the fund and would amount to a one time decrease of about $17 million. The good news, however, is that if the fund is left at that distribution rate, it should produce an additional $54 million the following year for a total distribution of over $640 million. It would continue to climb to $1 billion in distributions by about FY2025.

Responsible withdrawals from the LGPF are key to providing for our children’s education in perpetuity. It also saves taxpayers approximately $814/year per household in taxes. To increase withdrawal rates and risk our children’s future is irresponsible and would jeopardize the fund. We already have two “permanent” funds, Tobacco and Severance Tax, that are either dead or dying because of over depletion. We don’t need to use the LGPF as yet another example of how to kill a fund.

Despite numerous policy proposals and actions, New Mexico’s expenditures on its educational challenges have not yielded the return on investment promised. The answer is not to increase the rate of LGPF disbursements, but instead to focus on direct learning programs that yield beneficial results without violating federal requirements. That could be accomplished if the state would stop funding special interest groups and put the money into our teachers and quality educational materials.


The New Mexico Business Coalition (NMBC) is a statewide nonpartisan, probusiness organization that works to improve the business environment for companies and the quality of life for all New Mexicans. Its educational efforts focus on providing New Mexicans the facts about regulation, legislation and elected officials’ decisions affecting them. The NMBC has never applied for nor accepted government money. For more information, please visit our website at www.nmbizcoalition.org