Friday, October 2, 2009

The State's $11.8 billiion (with a "b") investment assets account. And schools are being asked to cut their budgets another 10%?

This "Op-Ed" is written by a financial specialist and Grassroots activist:

States can balance their budgets by 1) increasing revenues (taxes and economic growth) 2) cutting expenditures 3) borrowing 4) taking money they already have from their investment accounts.

The State of New Mexico is not 'broke!'  It has $11.8 billion in investment assets (value as of  6/30/09).

The State distributed over $400 million from these investment funds in calendar year 2009 through June 2009, and over $700 million in fiscal year-to-date.

The $550 million budget shortfall represents approximately 5% of the state's total investment assets.  And a much, much smaller per cent if we were just talking about education funding.

Can the state afford to increase its distributions from its investment assets to cover the shortfall? One could easily argue that, while the state had $3.4 billion in investment losses in fiscal year-to-date, representing a 22% loss in its asset base, that it could weather another 5% loss.

Admittedly, the State Investment Council is restricted in its use of funds, and even in the method and timing of distributions. However, the Governor and legislature must surely see that people are desperate. Desperate times call for strong leaders. We need a strong leader that understands and sees the financial solution is within reach.

For those of you with the fortitude to wade through this New Mexico State Investment Council 42-page Investment Performance Report (FY 2009), here is the source for the above data.  Click here.