Senate President Pro Tem Mimi Stewart

By DANIEL J. CHACÓN
SFNM News:

A bill that would require employers to pay more into the retirement fund for New Mexico educators passed the Senate Education Committee on a 5-3 party-line vote Wednesday.

Under Senate Bill 42, the employer contribution rate to the New Mexico Educational Retirement Board would go up by 1 percent a year for the next four years.

Senate President Pro Tem Mimi Stewart, D-Albuquerque, said the legislation would “go a long way towards the solvency” of the pension system, which covers all employees in K-12 schools, public colleges and universities.

“I understand that this is hard to do,” she said. “This is reoccurring money but I think it’s important to move forward with the ERB in this way. We did it with [the Public Employees Retirement Association of New Mexico], and when I tried to do a bill two years ago, I was told, ‘Not this year. ERB will be next year.’ That didn’t happen last year, and what about this year? Educators seem to always get push back when it’s time to deal with them.”

Republican lawmakers on the committee said they supported the concept but raised concerns about the ongoing requirement for funding. The bill, plus bonding, would cost an additional $150 million a year once the 4 percent cost increase was fully implemented.

Sen. Gay Kernan, R-Hobbs, said the state faces an unpredictable revenue picture. She cited a proposal to enact a moratorium on fracking permits for four years.

“I’m telling this committee and anyone who will listen that with the policies that have been announced over the last seven days that the state of New Mexico is going to have to be extremely careful about spending money over the long-term,” Kernan said. “I support the idea, the policy, but until we get a new revenue forecast update from [Legislative Finance Council] and we know where we’re going over the next two to three to four years, New Mexico simply is going to have to readjust this budget.”

The employer contribution rate to the Educational Retirement Board’s pension system is currently 14.15 percent. For the Public Employees Retirement Association, the employer contribution will be 19.24 percent by July 2023. Under Stewart’s proposal, the ERB’s employer contribution rate would climb to 18.15 percent in the fourth year, which she said would create equity.

Sen. Craig Brandt, R-Rio Rancho, said he understood the need to bring the two plans into alignment but also raised concerns about funding.

“I think we have to be really careful,” he said, adding that some lawmakers want to “slit the throat” of the oil and gas industry, which contributes as much as $3 billion a year to the state budget.

“The same group that is pushing to get rid of the oil and gas industry in our state — and we can’t deny that that’s exactly what they’re pushing to do, they’re trying to drive them out — is the same group that wants to continuously increase the budget in the state of New Mexico,” Brandt said. “I don’t know how they expect to pay for it. I don’t know if there’s fairies that are going to bring money down from the sky or if they’re planting money trees that I’ve never been able to find or how they’re going to pay for everything.”

The bill drew support from several organizations, including the New Mexico Council of University Presidents, the New Mexico Association of Educational Retirees and the American Federation of Teachers New Mexico.