NM “invests” $50 million in California-based “climate investment fund”

New Mexico is such a tremendously wealthy state, but as I wrote in National Review recently, that wealth is held by government while the population remains impoverished. A recent story from Albuquerque Business First notes that the State Investment Council is investing $50 million of the State’s Severance Tax Permanent Fund with a “climate-focused fund managed by a venture firm out of California’s Bay Area.” The total amount contained in New Mexico’s various permanent funds exceeds $43 billion and is one of the largest sovereign wealth funds in the world.

There are many issues here. First, while we understand that not ALL of these dollars can be invested with a sound rate of return here in New Mexico, we do often hear that New Mexico is “starved” for venture capital. So, which is it?

Secondly, New Mexico politicians are constantly using money generated by New Mexico’s oil and gas industry for the benefit of “green” pet projects. Now the State Investment Council is getting into the mix with “climate-focused” investments of Severance Tax funds.

Finally, all of this money flowing into New Mexico (this is NOT general fund money, but rather is allocated to other funds under the New Mexico Constitution) is out of sight and difficult for even the most diligent citizen to track. Thus, the SIC has had scandals in the past. Is it really a good and workable idea to empower public officials (working outside the spotlight) to invest such massive amounts of money in ways that aren’t politically driven or corrupt?

If New Mexicans knew just how much money their government is sitting on they might actually demand they benefit in more tangible ways than another government program.

HT Doug Peterson