Funding for public education will get a nearly $60 million boost next fiscal year from New Mexico’s two major sovereign wealth funds thanks to strong investment results in 2016.
The disbursement from New Mexico’s Land Grant Permanent Fund and Severance Tax Permanent Fund will increase to roughly $896 million during the fiscal year starting July 1, up from $838 million this fiscal year, state Investment Council spokesman Charles Wollmann said.
The increased payout could help offset recent cuts to general fund spending on public education, as policymakers wrestle with a stubborn budget deficit.
In October, the state cut $68 million from annual spending on public schools, and influential lawmakers say more cuts are likely next year if new sources of revenue cannot be found quickly. New Mexico’s oil-dependent economy is reeling from a downturn in energy markets.
Disbursements from the permanent funds are determined at the end of each calendar year based on the funds’ market value, using a five-year average to avoid abrupt changes.
The value of the two funds climbed to nearly $20 billion at the end of the year, with a return on investment of just over 7 percent during 2016, according to preliminary, unaudited results.