Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Padilla
LAST UPDATED
ORIGINAL DATE 2/7/25
SHORT TITLE Early Childhood Trust Fund, CA
BILL
NUMBER
Senate Joint
Resolution 6
ANALYST Klundt
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected
$210,000.0 Recurring
Early Childhood
Education and Care
Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY26 FY27 FY28
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
HCA
$22,900.0 to
$28,500.0
$22,900.0 to
$28,500.0
$45,800.0 to
$57,000.0
Recurring General Fund
ECECD
$11,000.0 to
$19,700.0
$11,000.0 to
$19,700.0
$22,100.0 to
$39,400.0
Recurring General Fund
SOS $35.0 to $50.0 Nonrecurring Elections Cost
Total
$33,900.0 to
$48,200.0
$33,900.0 to
$48,200.0
$67,900.0 to
$96,400.0
Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to Senate Bill 167
Sources of Information
LFC Files
Agency Analysis Received From Early Childhood Education and Care Department (ECECD) State Investment Council (SIC)
SUMMARY
Senate Joint Resolution 6 (SJR6) amends Article 20 of the state's constitution to establish the
"early childhood trust fund" as a permanent trust within the state treasury. The fund is designated
exclusively for prenatal and early childhood programs and services for children up to
kindergarten age. Annual distributions from the fund would be the greater of 5 percent of the
average year-end market values from the preceding three years or $500 million, whichever is
greater. In cases where state revenues are insufficient to meet authorized expenses, the
Legislature may appropriate funds as necessary to prevent a deficit, provided all other state fund Senate Joint Resolution 6 – Page 2
balances have been exhausted. The proposed amendment is set to be presented to voters for
approval or rejection at the next general election, in November 2026, or a specially called
election prior to that date.
FISCAL IMPLICATIONS
Under Section 1-16-4 NMSA 1978 and the New Mexico Constitution, the Secretary of State
(SOS) is required to print samples of the text of each constitutional amendment in both Spanish
and English in an amount equal to 10 percent of the registered voters in the state. SOS is required
to publish the samples once a week for four weeks preceding the election in newspapers in every
county in the state. Further, the number of constitutional amendments on the ballot may impact
the ballot page size or cause the ballot to be more than one page, also increasing costs. The
estimated cost per constitutional amendment is $35 thousand to $50 thousand, depending on the
size and number of ballots and if additional ballot stations are needed.
SJR6 limits eligible appropriation for the early childhood trust fund to “prenatal programs and
services and for early childhood programs and services for children until they are eligible for
kindergarten.” This limiting language would result in appropriations from the fund for ECECD
department operations, marketing, indirect services, and transfers to Medicaid authorized by
previous Legislatures to be ineligible for these revenues. LFC estimates this would result in an
estimated $33.9 million to $48.9 million in trust fund revenue that would need to be replaced by
general fund revenues.
Additionally, the bill diverts or “earmarks” revenue, representing a recurring loss from the
general fund. LFC has concerns with including continuing distribution language in the statutory
provisions for funds because earmarking reduces the ability of the Legislature to establish
spending priorities.
SIC reports the balance in the early childhood education and care fund, which would be
transferred to the to-be-created early childhood trust fund, was $9.015 billion as of December 31,
2024. The ECTF would also receive all the same recurring revenue sources currently received by
the ECECF:
1. Oil and gas emergency school tax revenues in excess of the five-year annual average
receipts of these funds,
2. Federal mineral leasing revenue in excess of the five-year annual average receipts of
these funds.
From SIC:
Based on current law, the ECECF annually distributes the greater of $250 million or 5
percent of the prior three-year average market value. Without any changes, the FY26
distribution from the trust fund would be $303.3 million. Using consensus revenue
estimate assumptions for inflows and returns, the ECECF would distribute an estimated
$410.9 million to the program fund in FY27, and distributions could begin to exceed
$500 million a year in FY28 or FY29.
SJR6 (and Senate Bill 167) increases the minimum required annual distribution from the
ECECF/ECTF from $250 million to $500 million, which would effectively “speed up”
the timing for the trust fund to begin making distributions of this size or greater.
Senate Joint Resolution 6 – Page 3
Source: SIC
The fiscal impact is an additional $196.7 million from the corpus of the trust fund to the program
fund in FY26, and an estimated additional $89.1 million from the corpus of the trust fund to the
program fund in FY27.
Source: LFC Files and ECECD
Senate Joint Resolution 6 – Page 4
SIGNIFICANT ISSUES
ECECD reports the department would use the additional revenue proposed under this bill to
expand services, which could include prekindergarten, childcare assistance, and home visiting.
The SIC table below shows the long-term estimated impact of this “speed up” to the corpus of
trust fund and the size of the distributions to the program fund using a 5 percent long-term
annual return assumption, consistent with the assumptions of the Consensus Revenue Estimating
Group (CREG), which consists of economist from the Legislative Finance Committee and
executive branch.
Using a 5 percent return assumption results in a “flattening” of the long-term fiscal impact
because the interest earnings on the trust fund corpus is assumed to be equal to the 5 percent
distribution rate to the program fund.
5% Long Term Return Assumption (Consensus Revenue Estimate)
Trust Fund Market Value Distributions to Program Fund
Calendar
Year Current Proposed Difference
Fiscal
year Current Proposed Difference
2020 $ 306.1 $ 306.1 $ ‐ FY20 $ ‐
2021 $ 314.1 $ 314.1 $ ‐ FY21 $ ‐
2022 $ 3,462.0 $ 3,462.0 $ ‐ FY22 $ 20.0 $ 20.0 $ ‐
2023 $ 5,721.2 $ 5,721.2 $ ‐ FY23 $ 30.0 $ 30.0 $ ‐
2024 $ 9,015.8 $ 9,015.8 $ ‐ FY24 $ 150.0 $ 150.0 $ ‐
2025 $ 9,918.0 $ 9,721.3 $ (196.7) FY25 $ 250.0 $ 250.0 $ ‐
2026 $ 10,893.8 $ 10,598.2 $ (295.6) FY26 $ 303.3 $ 500.0 $ 196.7
2027 $ 11,529.0 $ 11,215.8 $ (313.3) FY27 $ 410.9 $ 500.0 $ 89.1
2028 $ 12,022.9 $ 11,707.4 $ (315.5) FY28 $ 497.1 $ 500.0 $ 2.9
2029 $ 12,603.0 $ 12,287.1 $ (315.9) FY29 $ 539.0 $ 525.6 $ (13.4)
2030 $ 12,920.4 $ 12,604.5 $ (315.9) FY30 $ 574.1 $ 558.7 $ (15.4)
2031 $ 13,199.2 $ 12,883.3 $ (315.9) FY31 $ 602.6 $ 586.8 $ (15.7)
2032 $ 13,432.7 $ 13,116.8 $ (315.9) FY32 $ 625.8 $ 610.0 $ (15.8)
2033 $ 13,580.5 $ 13,264.6 $ (315.9) FY33 $ 645.4 $ 629.6 $ (15.8)
2034 $ 13,648.2 $ 13,332.2 $ (315.9) FY34 $ 659.2 $ 643.4 $ (15.8)
2035 $ 13,668.5 $ 13,352.5 $ (315.9) FY35 $ 670.2 $ 654.4 $ (15.8)
2036 $ 13,670.3 $ 13,354.4 $ (315.9) FY36 $ 677.7 $ 661.9 $ (15.8)
2037 $ 13,670.7 $ 13,354.8 $ (315.9) FY37 $ 681.6 $ 665.8 $ (15.8)
2038 $ 13,670.7 $ 13,354.8 $ (315.9) FY38 $ 683.1 $ 667.3 $ (15.8)
2039 $ 13,670.7 $ 13,354.8 $ (315.9) FY39 $ 683.5 $ 667.7 $ (15.8)
2040 $ 13,670.7 $ 13,354.8 $ (315.9) FY40 $ 683.5 $ 667.7 $ (15.8)
2041 $ 13,670.7 $ 13,354.8 $ (315.9) FY41 $ 683.5 $ 667.7 $ (15.8)
2042 $ 13,670.7 $ 13,354.8 $ (315.9) FY42 $ 683.5 $ 667.7 $ (15.8)
2043 $ 13,670.7 $ 13,354.8 $ (315.9) FY43 $ 683.5 $ 667.7 $ (15.8)
2044 $ 13,670.7 $ 13,354.8 $ (315.9) FY44 $ 683.5 $ 667.7 $ (15.8)
2045 $ 13,670.7 $ 13,354.8 $ (315.9) FY45 $ 683.5 $ 667.7 $ (15.8)
2046 $ 13,670.7 $ 13,354.8 $ (315.9) FY46 $ 683.5 $ 667.7 $ (15.8)
2047 $ 13,670.7 $ 13,354.8 $ (315.9) FY47 $ 683.5 $ 667.7 $ (15.8)
2048 $ 13,670.7 $ 13,354.8 $ (315.9) FY48 $ 683.5 $ 667.7 $ (15.8)
2049 $ 13,670.7 $ 13,354.8 $ (315.9) FY49 $ 683.5 $ 667.7 $ (15.8)
2050 $ 13,670.7 $ 13,354.8 $ (315.9) FY50 $ 683.5 $ 667.7 $ (15.8) Senate Joint Resolution 6 – Page 5
ADMINISTRATIVE IMPLICATIONS
SIC reports, by transitioning the statutory ECECF to a new constitutional ECTF, it is unclear
whether SIC would be required to create new accounting mechanisms to transfer assets from an
old account to a new account, or if the fund could simply be renamed for SIC’s accounting
purposes. SIC will need to consult with the Department of Finance and Administration, the State
Treasurer’s Office, and the custodian bank to determine if SB167/SJR6 would require an actual
transfer of assets between accounts, which could potentially have small associated transaction
costs.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Senate Bill 167 (SB167) proposes updates to the statutes governing the early childhood
education and care fund upon the ratification of the constitutional amendment introduced by
Senate Joint Resolution 6 (SJR6). The proposed changes include:
Increasing the annual distribution from the fund from $250 million to $500 million,
Renaming the fund to the early childhood trust fund,
Requiring consultation with the Early Childhood Education and Care Department
(ECECD) for investments into the fund,
Clarifying that, under the constitutional amendment proposed by SJR6, the fund may
only be used for “prenatal programs and services and for early childhood programs and
services for children until they are eligible for kindergarten”.
TECHNICAL ISSUES
SIC reports—because this bill changes the name of the current early childhood education and
care fund in Section 9-29A-2 NMSA 1978 (recompiled as Section 6-4-35 NMSA 1978) to the
early childhood trust fund but does not repeal the existing ECECF—it is unclear whether the
temporary provision in Section 5 of SB167 to transfer the balance of the ECECF to the ECTF is
necessary.
KK/hj/hg/sgs