By Myra Segal
May 25, 2011
Good news released May 23rd shows that New Mexico’s Land Grant Permanent Fund is now at $10.6 billion. The fund’s growth comes from two sources – investments in stocks and bonds, along with income generated from public lands. In the last three months, investments yielded $503.5 million and income added another $100.8 million to the fund. That’s a 6 percent increase in just one quarter, but the fund has actually grown by 25 percent over the current fiscal year (based on State Investment Council reports). I wish my 401-K was growing by 25 percent!
Why does an education policy wonk like me care about gains to the land grant fund? Because it means that the fund is healthy enough to meet the needs of New Mexico kids in the 21st century.
The fund was established to support public education efforts in our state. This dedication of income from public lands to support the “common schools” is a fine example of American democracy, which ensures that every child has access to public schooling. This promise that all children receive an education is what makes our country great. This principle also helps build our nation’s economy by fostering an educated work force. Problem is, like our school system, this fund was created during a time when our country’s educational needs were very different than they are today.
In the early 20th century, when New Mexico became a state and the fund was created to educate its residents, the economy was largely based on agriculture. The nation’s economy, which also relied heavily on agriculture, was in the midst of the industrial revolution. But, whether you worked on a farm or in a factory, few people needed a college education to be gainfully employed and support a family. Even as late as the 1940s, most adults did not have a high school diploma.
Boy, have times changed! The 21st century is all about technology. Even our health care sector has become incredibly high-tech. These days, most good-paying jobs require a college degree. Our national educational paradigm – that education begins at age five – has not changed enough to meet this new challenge. Fortunately, with such a robust land grant fund, New Mexico has the resources to ensure that our children are put on the path toward college and career success.
Every year, the state withdraws less than 6 percent of the land grant fund, sending this money to K-12 schools, colleges, and a few other institutions. While our K-12 schools get the lion’s share of the annual payout from the fund – about 83 percent – this only provides about 16 percent of the state’s overall funding for New Mexico’s K-12 schools.
Since the fund grows by an average of 11 percent every year, some of the fund’s income is plowed back into the principal. This good stewardship of the fund means our children will likely inherit a fund that has tripled in value over the next 25 years (assuming trends from the past 15 years continue).
Unfortunately, we get plenty of reports about how poorly our children are doing in school now and how the impact of poor schooling reverberates at our colleges and in work places. Doing the same old thing and expecting a different outcome is not realistic. It’s time to reconsider when we begin educating kids to keep up with what science tells us about brain development; what psychologists tell us about social and emotional development; what business leaders tell us about a changing marketplace; and what economists tell us about the return on investment. It’s time to invest more in early childhood care and education.
Studies show that investing in the first five years is the best way to avoid an achievement gap and to increase literacy and math skills so our children are better prepared for the jobs of tomorrow. Investing in a child’s first five years is sound public policy, with annual returns of 7 to 10 percent over the life of the child.
Invest in Kids Now! is an initiative supported by almost 30 organizations and thousands of people who see the remarkable opportunity we have to make a difference in our children’s lives and in our state’s economic future. Invest in Kids Now! proposes that the state distribute an additional 1.5 percent from the land grant fund each year for a ten-year test period. This additional money would go to the early care and education programs that are proven to help kids achieve in school. The proposal has several circuit breakers built in to ensure that the principal of the fund is not touched and the long-term viability of the fund is not compromised. The new distribution would stop if the fund were to fall below $8 billion. The Legislature would also have the authority to suspend the extra distribution at any time. A longitudinal evaluation will measure children’s progress before determining next steps when the ten years are up.
Even with this additional distribution, the fund will continue to grow and future generations will still have a robust education fund to ensure their right to a good education. We are confident that the improved educational experience that today’s children will receive will benefit generations to come.
New Mexico is blessed with the second highest land grant permanent fund in the country, and at $10.7 billion, it is hard to tell a toddler we can’t afford to provide them with the early childhood care and education we know will make a difference in their lives. I want to know that I am doing the most I can for our children. We cannot deprive New Mexico’s children from the opportunities we know they can grasp, given the chance. Let’s do the right thing and invest in our young children.
Myra Segal is the Deputy Policy Director and education wonk