February 6, 2016

House passes $6.3 billion budget, depends on transfers

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The House of Representatives passed the state’s $6.32 billion budget Saturday morning amid falling oil prices.

iStock_000001334173_SmallThe bill passed on a 38-31 vote, with two Democrats joining the Republican bloc in voting on the bill.

“We did the best we could with the revenues that are there,” House Appropriations and Finance Committee Chair Larry Larrañaga, R-Albuquerque, said when presenting the bill.

Larrañaga said Medicaid, education, public safety, corrections and early childhood funding marked the top priorities.

“Almost all of the increases are in five particular areas in this budget,” he said.

Medicaid funding will see a decrease in federal funding for the Medicaid expansion approved by Gov. Susana Martinez as part of the federal Affordable Care Act.

Other areas saw no increases or slight reductions.

For example, Rep. Paul Bandy, R-Aztec, said that “there is no new money for higher education.”

Larrañaga mentioned that the legislation would rely on HB 311, which passed after the budget, to transfer $74.2 million in funding from accounts throughout the treasury to the general fund.

Related: See story on “raids” or “sweeps” of funds to balance the budget.

The money would be taken, or raided, from various accounts. The highest amount was $6 million from the delinquent property tax fund, $3.225 million from a 2008 capital outlay appropriation for flood damage improvements in Lincoln and Otero counties, and $3.5 million from the local DWI grant fund.

The budget would also transfer over $18 million from the tobacco permanent fund. The tobacco permanent fund money would go toward Medicaid spending.

Democrats were heavily critical of the bill.

“In this budget you see a 5 percent increase in the corrections department and barely a 1 percent increase in public schools,” House Minority Leader Brian Egolf, D-Santa Fe, said. He said that he questioned the priorities. The increase in education funding is $31.2 million, compared to $12 million for Corrections.

“What we have today is a Tea Party budget that you’re asking me to vote on,” Rep. Antonio “Moe” Maestas, D-Albuquerque, said after questioning the lack of significant increased funds for courts, district attorneys and public defenders after passing numerous high-profile crime bills.

Maestas implored the majority to “walk the walk” on such bills.

“We are just too reliant on the federal government and oil and gas,” Rep. Bill McCamley, D-Mesilla Park, said.

Republicans, however, pointed to increases in education funding, early childhood funding and behavioral health.

“This budget addresses those concerns of mental health equally at least, if not increasing,” Rep. James Townsend, R-Artesia said.

“We have almost tripled early-childhood spending over the last six years under Gov. Martinez,” Rep. Conrad James, R-Albuquerque, said.

When it comes to salary increases, only law enforcement officers and corrections officers would receive pay raises. Other state workers would see their salaries stay static.

Democratic amendments

Much of the debate came on the Democratic alternative to the budget.

A proposed amendment by Rep. Patricia Lundstrom, D-Gallup, would rely on delaying the corporate income tax and single-sales factor. That would happen from Senate Bill 252, introduced by Senate Finance Committee chair John Arthur Smith, D-Deming.

“This is a tax increase,” Rep. Larrañaga said.

Lundstrom said it was not an increase, but a delay. “We’re pushing it back a year or two,” she said.

Martinez has vowed not to raise taxes while in office.

Rep. Jason Harper, R-Rio Rancho, noted that corporate income taxes are among the most volatile of all the funding sources.

“Relying on this revenue stream that is very, very volatile could set us up for relying on reserves even more in the future,” Harper said.

The House Democrats referred to the amendment as the “Economy for Everyone Amendment.”

It would then shift money to other priorities, for example, from the line item for teacher merit pay to go toward teachers for supplies and insurance pay.

“There’s not a standard way that it is distributed to the teachers,” Lundstrom said of merit pay. She said she felt it was more fair to help “each classroom teacher with an offset for supplies and insurance.”

The vote, after a Call of the House—which requires all those who are not excused to be in the chambers—on the amendment was 36-33, a party-line vote.

Another proposed amendment, by Egolf, would have subjected the governor’s contingency fund to monthly reports and allow it to be subject to the state audit act. Egolf said it was not aimed at any particular governor, but seemed to be a response to spending on the governor’s holiday party that preceded her infamous phone call to police.

Egolf withdrew that amendment before a vote.

The budget will now go to the Senate, which will have a chance to put their spin on the budget. At that time, the budget would go back to the House for concurrence.

The two Democrats who voted for the full budget were Reps. Dona Irwin of Silver City and of Tomas Salazar of Las Vegas.

Correction: This story originally said Nick Salazar voted for the budget. It was actually Tomas Salazar. We regret the error.