June 3, 2015

Deal reached, special session could happen on Monday

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It turns out that when Sen. John Arthur Smith, D-Deming, told New Mexico Political Report that a deal on capital outlay for capital outlay legislation and a tax package was near, he was very literal.

RoundhouseGov. Susana Martinez announced in a press release Wednesday afternoon, just hours after Smith said a deal was near, that the two sides reached an agreement and that she will call a special session. It will be just the second special session that Martinez has called since being in office, the previous one in 2011 dealt with the required decennial redistricting.

The special session is tentatively scheduled for June 8, though Martinez’s office did not say it would for sure happen on that date.

The capital outlay package will be $295 million in size. The release from Martinez’s office said it will “fully fund” the economic development closing fund and fund $84 million in local infrastructure projects.

Capital outlay funding is largely used for infrastructure throughout the state as well as construction for senior centers, correctional facilities and more.

It isn’t just capital outlay; the bill also includes a tax package the restores the Unreimbursed Medical Expense Tax Deduction, which the governor’s office says is used by around 300,000 New Mexicans annually. Other tax credits include a U.S. Department of Defense Energy Gross Receipts Tax Deduction and re-enacting the Border Zone Trade-Support Gross Receipts Deductions.

One piece of the tax package that was not included was a tax incentive for trust funds, something that was heavily criticized by Democrats following the session.

A gasoline tax increase to pay for road projects is not included.

The release says there are sunsets on two of the deductions, though it does not say which.

The bill will also have $300,000 in funding for the Administrative Office of the Courts, after Martinez vetoed larger funding for the AOC. It will also include $4 million in funds for the Department of Health.

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Martinez said that the package will create jobs.

“We are prioritizing highway construction and other major infrastructure, which puts people to work immediately and lays a strong foundation for long-term economic growth,” Martinez said in a statement.
And it is absolutely critical that we make New Mexico more competitive for job creation by offering targeted incentives for businesses choosing to locate or expand in our state, and by focusing on the creation of new jobs and investment along our border and in the technology sector, while making it easier to start a small business and succeed.”

Smith, the chair of the Senate Finance Committee who headed negotiations for the Senate Democrats, also said it is a compromise.

“We’ve met in the middle, and this agreement addresses important needs throughout the state and will be good for the people of New Mexico,” he said.

Meanwhile, Speaker of the House Don Tripp, R-Socorro, highlighted what the package will mean for New Mexico’s roads.

“This agreement will ensure that we fix our aging roads and, at the same time, it includes the jobs package, which will encourage companies to set up shop in New Mexico and create high-tech jobs that our state needs,” he said.

House Minority Leader Brian Egolf, who was heavily critical of the actions by House Republicans in the past, said it will help all New Mexicans.

“I am very pleased, as are all House Democrats, that negotiations have been fruitful and have resulted in a capital outlay bill on which we can agree,” Egolf said. “When Representatives, Senators and the Governor work with a common purpose, the people of New Mexico win.”

Senate Minority Leader Stuart Ingle sponsored a bill related to the double-taxation of gas that will be included in the tax package.

“For the last few months, we have worked with the governor and leaders in both chambers to find middle ground, and that has resulted in a bipartisan agreement that not only creates jobs, but also addresses critical infrastructure needs,” Ingle said. “This is an agreement that every New Mexican can get behind.”

The special session is expected to last just one day since a deal has already been reached.

Related stories:

Martinez has no plans to call a special session

Sen. Smith not optimistic about special session deal

Mayors press governor to call for special session

Correction: This story previously had the wrong quote attributed to Stuart Ingle. We regret the error.