In the depths of the economic crisis of 2008-09, I sat in a conference room at a large Denver newspaper, discussing how we were going to cover the crash of the U.S. financial system — and how that mess was going to toss a bucket of sand into the gas tank of Colorado’s astounding growth.
The tension in the room was palpable; nothing scares Coloradoans like the thought of a recession. Gets in the way of their daily trips to REI.
Colleagues better versed in the ways of that state — I’d only been there a few months — kicked around a few ideas, noting how Colorado’s energy industry on the state’s Western Slope had produced cash galore, seemingly evergreen green, in the early 2000s.
Now, the good times were gone, and all that money was … well, where was it, exactly? Worse, the state budget was in peril.
“It’s just too bad that we’re not smart like New Mexico,” one of my colleagues mused. “We should have had a permanent fund.”
Ah, the Land Grant Permanent Fund.
New Mexico’s brilliance. New Mexico’s folly.
Our pot of gold at the end of a black cloud that never seems black enough.
As everyone knows by now, the upcoming special legislative session to address the state’s catastrophic drop in revenue was framed this week by Gov. Michelle Lujan Grisham, who declared the permanent fund would be on the table as lawmakers try to keep New Mexico from going under — or, economically speaking, back to 1988. I wish her well. If she thought social distancing and stay-at-home orders were tough to execute, wait until she proposes tapping the $18 billion reservoir, inaccurately billed by this newspaper and others as a “rainy day fund.”
There’s no day rainy enough for the permanent fund. That’s been proven over and over.
The temptation, of course, is to roast Sen. John Arthur Smith, chairman of the powerful Senate Finance Committee. For many years, he’s been Senator No on the subject. Tap-the-fund bills for efforts such as early childhood education easily pass the state House of Representatives; Smith swats them away in the Senate. It happens with such Swiss-timepiece predictability, it’s how we’ve come to know winter has arrived in Santa Fe.
Senator No is undefeated.
But in this case, the problem really isn’t Smith. It’s something deeper and more insidious — a mindset among many that the crisis will be tempered, if not defeated, as soon as Lujan Grisham and like-minded governors open up businesses and daily life. Or, failing that, the optimists believe happy days will be here again once science discovers and perfects a serum that will make COVID-19 go the way of polio and whooping cough.
Everyone waits for normal to return.
The wish belies the reality. Normal is gone; gone for a long time. In its place arrives a new order, one that favors those who can scramble and improvise on the fly, even if those actions are unconventional and risky.
And by 20th-century standards, employing the permanent fund as a backfill for demolished revenue is a risky proposition. Equating COVID to cancer, Smith dismissed using the fund as a mere “shot in the arm.”
Smith correctly fears that by using the fund now, it makes it easier to use over and over in the future. He’s probably right; there are plenty of covetous eyes on that money. The past several legislative sessions are proof enough. But if the fund’s purpose is to help the state in times of trouble, my question is this: Will we ever see bigger trouble than what we have now?
Smith’s imagery of the fund as a shot in the arm isn’t a bad one if you subscribe to his way of thinking. For me, I see it not as an inoculation, but as a blood transfusion — a way to stabilize the state to keep it from slipping into the kind of economic shock from which it may never recover.
Instead of taking a chainsaw to basics like education, health care, even roads, legislators and the governor have a method by which they can play for time. The return of a depressed oil and gas industry, the state’s mad money, may take years, but at least New Mexico wouldn’t be a barren wasteland when better days return.
At least it wouldn’t be 1988.
The value of the permanent fund is not that it erases all problems. By itself, it cannot make New Mexico whole or damage-proof. But it can, if used and thought of wisely, mitigate the damage to daily life that surely is on the way.
Eighteen billion dollars.
Now we’ll get to see how smart we really are.
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