As New Mexico legislators grappled with budget deficits, they raided cash reserves from various accounts just to pay the bills, some of which were past due. But New Mexico also is one of a few states with a sovereign endowment from energy and mineral deposits that locks away money for future generations.
Severance tax funds in the United States hold a combined value of $70 billion, according to the Pew report. The 77 sovereign wealth funds outside the United States in countries such as Russia, Kuwait, China and France have $8.2 trillion in assets. A severance tax-based sovereign wealth fund is one tool policymakers could consider to answer the challenges posed from a high reliance on these taxes, as it can help transform this volatile, finite tax stream into more permanent, revenue-generating assets………………………………….Full Article: Source