Revving up the economy in the special session

In preparation for the upcoming special session of the New Mexico legislature, we’re all nervous. Due to revenue lost through business closures, spending on emergency health and education, and the international price war in the oil industry, New Mexico has to rebalance its books for the coming fiscal year.

Legislative leaders have said the pain might not be too bad, due to high levels of cash reserves and other pockets of money, such as funds allocated for capital outlay projects but not yet spent.

Canceling some of those projects might violate New Mexico’s outdated tradition of capital outlay allocation — the custom that splits the money among legislators for small local projects, so we never get around to large, ambitious projects that would modernize the whole state.

Maybe this is an opportunity to change that custom and undertake some of those large, ambitious projects.

And perhaps the way to start those projects, finally, is to loosen the strings on the permanent funds.

I’ve been a budget hawk about New Mexico’s permanent funds for many years. The capital in those funds has been generating revenue that, year after year, has been vital to New Mexico’s budget. I’ve favored keeping it intact and stable.

If existing reserves are enough to keep government running, that’s very good news. But for a time like this, not good enough.

Our permanent funds are a treasure.  We have been saving and spending prudently for many years. But we’ve never seen an emergency like this.  Maybe now is the time to spend a little more and put New Mexicans to work building a 21st-century state.

New Mexico’s unemployment rate is over 11%. Children are being fed by their schools and local governments because their parents can’t afford groceries.  When the court-ordered halt to evictions expires, we may see families forced into homelessness. The virus is still at emergency levels among the Navajo and other tribes.

The Land Grant Permanent Fund balance was $19.7 billion in December and $18.6 billion at the end of April. The Severance Tax Permanent Fund was at $5.6 billion, down to $5.2 billion in April.  Those are losses, but not bad considering what the economy has been through.

The necessary constitutional amendment, to increase the distribution from one of the permanent funds, could be passed in the special session and submitted to the voters in November.  I would recommend the increase be time-limited to around five years.  There:  I’m still a budget hawk.

One priority should be broadband expansion. Everybody is in favor of this.  If that wasn’t clear before the pandemic, it should be crystal clear now. Broadband expansion is essential to expanding the economies of rural communities, including tribal communities, and delivering healthcare and education to those same communities.

New Mexico has been stumbling on this because of logistical issues like the need to acquire right-of-way. We can figure this out.

Broadband expansion should be Priority Two, not One, because of those logistics, which will take time. We need projects that can hire workers right now — shovel-ready, as the saying goes.

There is plenty of urgency among roads, bridges and dams in need of repair. Experts can pick projects that are urgently needed, ready to break ground quickly, adaptable to Covid-19 safe practices, and consistent with the governor’s new initiative on racial justice. One benefit of public works projects like these is that outdoor work has been shown to be relatively safe from virus transmission.

This national crisis could become a benefit to New Mexico.  All states are struggling right now. New Mexico has managed the pandemic better than most, has shown itself to be a prudent manager of resources and has attracted favorable notice nationally and globally. We are open for business.

Investing in ourselves may bring a solid return. Shining up our image with infrastructure can help.

Triple Spaced Again, © New Mexico News Services 2020



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