Land Grant Permanent Fund: Thank Harvey for all those billions of dollars
LAS CRUCES — New Mexicans have Harvey B. Fergusson to thank for the substantial chunk of money soon to be argued over in the state Legislature.
The Ferguson Act of 1898 (apparently, one “s” in his name got lost in the translation) and the Enabling Act of 1910 both transferred millions of acres of land to the new state of New Mexico in 1912. The revenue earned from those lands was to be put into the Land Grant Permanent Fund, a trust to support schools, universities and hospitals “in perpetuity.”
Both bills transferred specific sections in each township and range in New Mexico. If that specific section of land was not available, the state could select other “lieu” land as a replacement. Much of that was in the oil-rich Permian Basin of Lea and Eddy counties. Huge potash deposits in Eddy County were also acquired as part of the transfers, according to the State Land Office.
That office now manages 9 million surface acres and 13 million mineral acres on state trust lands in 32 counties. Revenue is raised primarily through leasing lands for oil, gas and mineral exploration.
A constitutional amendment in 1958 transferred management of the Land Grant Permanent Fund from the Legislature to the State Investment Council, which had just been created the year before.
Another amendment in 2003 increased the permanent annual distribution from 4.7 to 5 percent, with temporary increases up to 5.8 percent for the 2006 to 2012 fiscal years and 5.5 percent from FY 2013 to 2016. It has since gone back down to 5 percent.
The Land Grant Permanent Fund is the largest of the state’s permanent funds, but not the only one.
- The Severance Tax Permanent Fund was created in 1973, using taxes collected when oil and gas is shipped out of the state. It contributed $234 million to the state’s general fund in fiscal year 2021, which is 4.7 percent of the fund’s five-year average. General fund money can be used to cover all state expenses.
- The Tobacco Settlement Permanent Fund was created in 2000 with money claimed in the settlement of a lawsuit against tobacco companies. This fund is intended to support education, public health and tobacco cessation programs.
- The Water Trust Fund was created with a $40 million appropriation in 2006, and another $15 million in 2007. The fund distributes $4 million a year for water infrastructure projects throughout the state. The State Investment Council estimates that without additional capital, the fund could run out of money in the next 20 years.
- The Early Childhood Education and Care Fund was created following passage of a bill this year sponsored by Rep. Doreen Gallegos, Las Cruces, and Sen. John Arthur Smith, D-Deming. A $320 million appropriation to start to fund was cut by $20 million during a special session in June, but the fund is expected to make its first award to support early childhood education in the coming months.
All of the funds are managed by the State Investment Council.
Walter Rubel can be reached at firstname.lastname@example.org.