NM Lawmaker Offers Budget Fix Using Endowment Fund

BARRY MASSEY

SANTA FE, N.M. (AP) — A Democratic legislative leader wants to tap into a nearly $9 billion state endowment fund to help solve New Mexico's budget problems.

Senate Majority Leader Michael Sanchez said Wednesday he'll propose taking $2 billion from the Land Grant Permanent Fund to pay for critical government operations in the next few years, such as public schools.

"It's like a loan from ourselves to get past the crisis so we don't have to cut education, cut any type of health care, provide for those who need help the most, continue with our public safety," the Belen Democrat said in an interview.

He said pulling money out of the permanent fund — which makes yearly payouts for schools, state hospitals and other public institutions — will minimize the need to increase taxes to deal with a projected budget shortfall next year and a potentially slow financial recovery for several years. Sanchez proposes to require the state to repay the money removed from the permanent fund, but he hasn't worked out details of his proposal to set a deadline for that.

The state needs at least $400 million next year to plug a hole in the budget and maintain current services, according to the Legislative Finance Committee. Gov. Bill Richardson has warned that tax increases will be necessary to resolve the budget problems. The Legislature met in October to deal with a $650 million budget shortfall this year.