February 20, 2019

House GOP budget calls for rebates, fewer raises

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Republicans in the House of Representatives want to use some of the state’s budget surplus to give every New Mexican $200.

These rebates are part of a $6.6 billion budget that GOP lawmakers are putting forward as an alternative to a spending plan sponsored by Democrats and headed for a vote in the House as soon as Thursday night.

The House Republican plan would still increase the state budget, but by 5 percent instead of the 11 percent boost in spending included in House Bill 2 and related legislation.

New Mexico is in the midst of a windfall from an oil and gas boom, but GOP lawmakers caution that using too much of that money will only lead to tax increases or cuts in future years when the boom goes bust.

The Republican proposal is a long shot in the House, where the party holds only 24 of 70 seats. But it sums up the GOP’s opposition to the first budget of Democratic Gov. Michelle Lujan Grisham’s term as she seeks to implement an ambitious agenda that calls for significant increases in funding for public schools as well as broader access to Medicaid.

House Minority Whip Rod Montoya, R-Farmington, called the Democrats’ spending plan “a ridiculous, unsustainable budget.”

“We created a budget that’s sustainable,” said Rep. Rebecca Dow, R-Truth or Consequences.

The House Republican proposal would still provide 6 percent raises to teachers and other school employees. It would also increase minimum salaries for teachers to the same levels as proposed by the governor and included in the Democrats’ budget.

But the Republican plan would not provide pay increases for many of the state employees counting on raises of at least 4 percent this year.

Budgets for many state agencies would stay flat, too, under the House Republican plan.

There would be increases for agencies such as the Department of Health, the Children, Youth and Families Department and the Aging and Long-Term Services Department.

And Republicans say their budget would leave 33 percent of the state’s general fund in reserves by the end of the next fiscal year. House Democrats are proposing reserves of about 22 percent.

Lujan Grisham and Democratic lawmakers have pushed to increase funding for departments across state government, arguing that years of budget cuts and staffing shortages have left some agencies unable to adequately perform basic services.

And the Democratic spending plan calls for nearly a half-billion in new funds for education to address a judge’s decision that the state’s system for financing schools is unconstitutionally inadequate.

“After eight years of austerity and ignoring the needs of schools it is appropriate to make investments in education,” House Speaker Brian Egolf said.

If there’s any time to increase the budget, it’s now, Democrats say, as economists project a surplus expected to total around $1.1 billion by the end of the next fiscal year.

Republicans counter that the bigger budget proposed by Democrats will inevitably require tax increases.

Democratic lawmakers have proposed raising the gas tax, for example, as well as personal income tax rates.

House GOP lawmakers said their proposal would not require any tax increases.

And House Republicans are suggesting the state take some of the surplus to issue rebates to every New Mexican.

The rebates would total $200 per person. So, a family of four would get $800.

“That money comes from hardworking New Mexican families. [It] can go directly back to them and they can inject it back into the economy,” said Rep. Jason Harper, R-Rio Rancho.

New Mexicans received a tax rebate in 2008, when the state was riding another budget surplus. The recession and falling energy prices hit the state hard the following year, however, and legislators exacted budget cuts as they faced a deficit.