Gov. Susana Martinez signed legislation that reinstates funding to the Legislature and higher education— two things she vetoed during the regular session. Martinez also partially vetoed a bill that would have moved money from other funds into the state’s general fund. In her message, Martinez criticized the Legislature for taking money from fund balances “that do not exist.”
“We cannot balance a budget with funny money,” Martinez wrote. Martinez also vetoed a proposal to increase gas taxes and permits for gas haulers. “I have said since my first day in office that New Mexicans are overtaxed and state government overspends.”
The Legislature is set to reconvene Tuesday to decide whether to override Martinez’s vetoes or adjourn until next year.
This week, a grand jury charged former state Sen. Phil Griego with 22 new criminal counts centering mostly on embezzlement and perjury for allegedly using campaign money for personal use and lying about it. In total, Griego faces 19 new felonies and three misdemeanors. This adds to the nine previous corruption counts Griego was charged with last summer by a district court judge in Santa Fe. Attorney General Hector Balderas’ office is prosecuting Griego. The new charges include 13 perjury counts, each of which are fourth-degree felonies, for lying on several of his campaign finance reports between 2012 and 2015.
This week, NM Political Report editor Matthew Reichbach was on Here & There with Dave Marash, discussing the recent special legislative session. The show appears on KSFR in Santa Fe and is available online for free. Legislators met during the brief special session to address the state’s budget, making sure it would be balanced, as required by the state constitution. One piece of legislation, championed by Gov. Susana Martinez and agreed to by reluctant legislators, used severance tax bond money to help cover a budget hole. Reichbach and Marash also discussed a tax overhaul proposal that did not clear a House committee.
For most of this year, the budget was the hottest topic for legislators and the governor. Both branches battled, then came to an agreement no one seems enthusiastic about. The deal suggested by Gov. Susana Martinez essentially amounted to using bonding money normally reserved for state infrastructure to balance the budget. State lawmakers request the bonding money for state infrastructure projects. Issuing bonds works like a home mortgage: the state borrows money backed by oil and gas revenue and pays it back with interest over the years. Senate Finance Committee Chairman John Arthur Smith, D-Deming, said the funding method “sets a poor precedent” while Senate Minority Leader Stuart Ingle, R-Portales, said he didn’t “like to do this either.”
And yet, the plan passed with a unanimous vote in the House of Representatives and just two dissenting votes in the Senate.
The Legislature asked a state district court Monday to invalidate 10 vetoes by Gov. Susana Martinez of bills state lawmakers passed during this year’s regular session. The petition filed with the First Judicial District Court in Santa Fe came after the Legislative Council voted to approve it earlier this year. A spokesman for the governor said the legal challenge is “another example of out-of-touch Santa Fe trial lawyers wasting time and taxpayer money going to court when they don’t get what they want.”
Democrats say Martinez violated the state constitution by not explaining why she vetoed the 10 bills. The complaint describes the two categories of vetoes: Half of the bills were vetoed within three days after being presented to the governor. But the governor did not include her “objections” as required by the state constitution.
Without much drama or even an attempt to override Gov. Susana Martinez’s vetoes of tax increases, legislators ended a special session where a budget deal became law. The legislators in both chambers came to order around 1 p.m. on Tuesday after recessing ahead of the holiday weekend. The legislators recessed last Thursday rather than adjourn after passing bills related to the budget and taxes. Staying in session while recessed meant Martinez had to make a decision on legislation to three days instead of 20 days. Martinez ultimately signed legislation on Friday reinstating funding for higher education and the state Legislature, both of which she vetoed entirely after the regular Legislative session earlier this year.
A complex tax overhaul bill failed to clear its committee, and that’s going to further complicate the special session in which legislators are supposed to address the budget in New Mexico. Rep. Jason Harper, R-Rio Rancho, presented his 430-page tax overhaul bill Thursday morning. It took him nearly an hour to describe the bill to the House Labor and Economic Development Department. “That in very high-level, broad terms is what is in this bill,” Harper said when he finished describing the bill and how it differed from a similar bill legislators already passed in March. After public comment and questions from the panel, the committee voted 6-5, on party lines, to table the bill.
It isn’t often that a bill that it seems no one likes passes a legislative chamber, but that happened Wednesday afternoon in the Senate with two different bills. The chamber voted 36-3 to pass a bill that would essentially borrow money to balance the budget, something that no senator said they were happy about. Update: Added information on a third bill passed by the Senate
The Senate also passed a tax package on a 25-16 vote that included an increase in the gas tax and the motor vehicle excise tax as a way to shore up depleted state reserves. Borrowing money to balance budget
Senator John Arthur Smith, D-Deming, and Senate Minority Leader Stuart Ingle, R-Portales, each mentioned the idea of using severance tax money to help balance the budget came from the governor’s office. “We do not think it is very responsible, it sets a poor precedent…But in an effort to try and find forward movement with the executive branch, we have swallowed that bill and are willing to do it,” Smith said.
Questions on what can be accomplished during a special session linger even as legislators head to Santa Fe today. The main priority for legislators is a budget. Legislators must pass a new budget after Gov. Susana Martinez vetoed the entire budgets of higher education and the Legislature. If a new budget isn’t passed before the start of the next fiscal year, which begins on July 1, New Mexico community colleges and universities will have no money. But Martinez also wants legislators to address a massive tax overhaul and confirm two University of New Mexico regents.
Gov. Susana Martinez met with legislative leaders Friday morning to discuss a budget fix ahead of the upcoming special session scheduled to start next Wednesday. Martinez’s spokesman, in a statement, called the meeting “productive” and said the governor is confident her office would come to an agreement on funding the coming fiscal year, “including funding for higher education.”
“The Governor reiterated that she will not support standalone tax increases, but is hopeful that we will be able to find a bipartisan path forward on tax reform,” spokesman Michael Lonergan said. The statement potentially leaves room for tax increases as a part of a comprehensive tax overhaul similar to what state Rep. Jason Harper, R-Rio Rancho, spearheaded during the recent general legislative session. Martinez last week told the Santa Fe New Mexican that she would support reinstating the food tax as part of such a reform—a marked contrast from even just two months ago when she vowed to “definitely veto every tax increase on my desk.”
State House Speaker Brian Egolf, D-Santa Fe, however, told NM Political Report that “there is still tremendous uncertainty about what sort of tax reform proposal is going to be offered during the [special] session.”
Egolf described the meeting with Martinez as “a first crack” at agreeing to a budget solution. “It wasn’t really a horse trading kind of thing,” Egolf said.
State House Republicans unveiled a spending plan for the upcoming special legislative session that would transfer $12.5 million from the state Legislative Retirement Fund to the general fund to solve the New Mexico’s budget shortfall. Martinez announced the special session will begin Wednesday, May 24. GOP House leaders announced the plan publicly in a press release Tuesday, touting it as a solution to fix the state’s budget issues without raising taxes. “This plan covers New Mexico’s budget needs for the upcoming fiscal year and increases funding for cancer care as well as support for students working to obtain a college degree,” state Rep. Larry Larrañaga, R-Albuquerque, said in a statement. “I urge my colleagues in the Legislature to adopt these proposals so we can resolve this budget impasse fairly and for the benefit of all New Mexicans.”
But the ranking lawmaker in the House Appropriations and Finance Committee questioned whether the Legislature could legally transfer money already invested the retirement fund.