We were holding off on reviewing the candidates' stance on funding our state and educators' retirement funds until a later date, but since the ABQ Journal wrote about this yesterday, we decided to give you our perspective.
To make this VERY clear, $1B of the $24B investment funds we are pushing to invest into NM's economy comes from our land/tax leases that the State Investment Council (SIC) manages. These funds have nothing to do with our state or education pension funds. These are two entirely different containers of money. We would NEVER recommend taking funds out of one to shore up the others, plus it is unconstitutional.
Where do the candidates stand?
We agree with Congresswomen Lujan Grisham that we need to increase funding of the pension fund and return to full funding at a 3-6% annually. Over the last 10 years, Governors and Legislators have cut funding to offset our general budget shortfalls. We understand why they did this with fewer tax revenues coming in, but we have never agreed with it.
We are happy that BOTH candidates agree NOT to cut any type of allocation to the 90,000+ retirees in our state, we must live up to our commitments. Educators and our state employees have worked for years at a lower pay scale than the private sector for the promise of benefits, and a retirement pension. Our elected officials MUST live up to our obligations.
We do agree with Congressman Pearce that we must look at novel ways to fund new employee pensions. We do believe a state retirement fund in addition to a personal and state matching could work. The key is to educate new employees on the importance of contributing more funding in their earlier working years. However, we don’t agree with Pearce on cutting retirement packages for state elected officials. Our state legislators work for free, so a retirement package is an attractive incentive for them to serve with no salary.
What would we like to see? We want what we discussed in the past, it’s time to pay our state's elected officials. We believe we should pay officials $50K-$125K a year with a matching pension fund. At the same time, we must not allow state elected officials and their immediate family to have any state or federal contracts. It is time we stop the corruption.
Our elected officials MUST recuse themselves from decisions with state contracts, chairing committees or voting on bills they benefit from in any way. Yes, if we pay them, let’s have our legislators in session 120-180 days a year working on real change. YES, we need term limits. Our forefathers never wanted our public servants to stay a lifetime and use their power to make money off our citizens.
To summarize, most state pension funds around the country are 60-75% funded, so our funds are not far off. Moody lowering our bond rating was not just due to underfunding, it was also because of the lack of leadership to strengthen our funds and state economy.
We agree with both candidates on their positions but believe they're not looking 20 – 50 years ahead. Not only do we need to stop cutting funding, but we must also give state employees and educators a 3% annual raise. This will put more dollars into their pockets, and more dollars back into our economy while strengthening pension funds with increased employee contributions annually.
We believe job creation is the critical issue candidates need to address. Our jobs plan over six years will increase state tax revenues considerably over $1.5B annually and generate $900M+ in surplus. With the addition of the oil & gas industry and new revenues from renewable energies, we expect an additional $1B+ in new tax revenues annually. We would recommend allocating 1/3 of these new taxes dollars to state and educator pension funds strengthening them for the long term.
By doing this Moody would undoubtedly move NM's rating up to an AAA rating once again. Overall we would grade both Grisham and Pearce a “B” rating on this topic.