SIC increasing distribution to public schools

While lawmakers continue to debate how to reform the State Investment Council, the group's board has announced it will distribute $720 million to public schools and other permanent fund beneficiaries in fiscal year 2011 -- an $8 million increase over the current year.

After the 2008 market collapse and credit crisis, the state Land Grant Permanent Fund investment grew 21.2 percent in 2009 -- outperforming its policy index by 4.5 percent. That return ranked it in the top third amoung its peers. Investment returns were also in double digits for the Severance Tax Permanent Fund last year. It grew 19.8 percent -- outperforming its benchmark by 4.4 percent. It ranked in the 43rd percentile among its peers in the same time period.

"These distributions show the overall vitality of the Permanent Funds, which continue to experience long-term growth, despite the economic downturn," interim State Investment Officer Bob Jackson said in a news release. "This is the ultimate purpose of these trust dollars -- to produce steady earnings that benefit New Mexico residents today, as well as future generations."

Annual distributions are based on a 5-year rolling average of the state's permanent endowment and are established by the state's contitution.

Perfomance data and individual SIC manager performance for 2009 can be reviewed online.

NM Treasurer James Lewis Working With Banks to Open Credit Lines.

James Lewis

On Friday, the New Mexico Business Weekly's Kevin Robinson-Avila reported New Mexico's permanent funds and pensions have been battered by the meltdown on Wall Street, but aggressive action by fund managers has helped mitigate the impact:

In the July-through-September quarter, the funds managed by the State Investment Council (SIC) and the pensions managed by both the Public Employees Retirement Association (PERA) and the Education Retirement Board (ERB) declined by a total of $3.21 billion.

We decided to talk to State Treasurer James Lewis. He gave us the early word: Investors and consumers need to be reassured that the economic rescue plan will inject liquidity into the markets and that banks doing business in the state still need to open lines of credit, before investor and consumer confidence is restored.



Lewis also said he wants those accountable for the crisis to face justice, including indictments and prison sentences.

Lewis, has been on at least one teleconference, with other state treasurers and the U.S. Treasurer, said the State's Investment Council Oversight Committee will meet this week to review how well fund managers have mitigated the impact of the financial meltdown here.

Lewis said the state has taken a defensive posture and is working with economists at UNM to navigate this financial crisis.

Photo Credit: MG Bralley