The final pieces of a 2018 fiscal year budget were falling into place Thursday with just enough money to balance spending and send lawmakers home without the need for a special session. Those measures were advancing even as other bills — such as an effort to increase the tobacco tax or raise money by closing tax loopholes — died in committees and looked to jeopardize any final agreement. One of the developments came as hospital executives met with Gov. Susana Martinez to discuss a section of House Bill 202, which increases taxes and fees in several areas. One of its provisions would equalize the gross receipts tax on all nonprofit and for-profit hospitals, with the money earmarked for Medicaid. The New Mexico Hospital Association helped craft a compromise with lawmakers to support the tax if some of the $80 million raised could be used to bridge a shortfall in Medicaid, which costs the state $916 million a year.
Santa Fe Public Schools will have a half-day today, similar to a “snow day” for students. The projected high today is 70 degrees, so it isn’t for snow. Instead, it’s for a day of action for teachers, parents and students to show opposition to further school budget cuts. Santa Fe Public Schools Superintendent Veronica García announced the decision Wednesday afternoon. Related: Unexplained vetoes rile lawmakers
The governor’s office wasn’t happy, and a spokesman called the plan “despicable,” according to the Santa Fe New Mexican.
The superintendent of a small school district in Southern New Mexico told state lawmakers in no uncertain terms Tuesday how a 5 percent or 6 percent cut in his operating budget would affect his district. “Our teachers work very hard to put hope in front of those kids,” Ricky Williams, superintendent of Hagerman Municipal Schools, told members of the Senate Finance Committee. “With budget cuts, you take that hope away.” Williams was one of several district leaders and college presidents who put a human face on the realities of education funding cuts during a three-hour hearing at the state Capitol, which attracted about 150 people — many of them educators. Garrey Carruthers, president of New Mexico State University in Las Cruces, told the committee that colleges and universities may have to hike tuition rates by up to 30 percent to offset budget reductions.
Senate Minority Leader Stuart Ingle was in office 15 years ago, the only time the Legislature overrode a governor’s veto of the entire state budget. That showdown pitted Republican Gov. Gary Johnson against a Legislature controlled by Democrats. Ingle, R-Portales, said he is confident the impasse this year over spending and tax increases between majority Democrats in the Legislature and Republican Gov. Susana Martinez will not be a repeat of what happened in 2002. He said all parties agree on the priorities. Namely, the state needs to boost revenue to pay for education and day-to-day services included in the proposed $6.1 billion operating budget and stash away more in savings to help its credit rating.
Lawmakers looking for every possible penny of new revenue to balance the state budget moved ahead with an omnibus tax package Wednesday over the objections of hospitals and medical providers that claimed paying more to the state would harm health care in New Mexico. House Bill 202 is part of an effort to bring in revenue from the fastest-growing part of the state’s economy — physicians, hospitals and clinics, most of which now pay little or no gross receipts tax. Rep. Carl Trujillo, D-Santa Fe, said his bill equalizes the tax among the entire health care sector at just over 3 percent — and that amount is paid on just 40 percent of patient revenue. “I don’t know how you can be more fair than everyone in this profession paying the same,” he said. The measure would raise $250 million for the general fund and restore cash reserves to about 4 percent, Trujillo said.
The state Senate’s leading budget hawk challenged Gov. Susana Martinez on Thursday to reverse course and support proposals for raising taxes and fees or watch essential services get slashed even more. Sen. John Arthur Smith said any vetoes Martinez makes at this stage will force legislators to cut the budgets of public schools and health care as they follow the law to pass a balanced budget. “We’re out of places to find additional dollars,” Smith, D-Deming, said during a brief speech on the floor of the Senate. He spoke hours after the House of Representatives approved a $6.08 billion budget and then moved it to the Senate for consideration. The budget crafted by the Democrat-controlled House would increase state revenue by some $250 million with tax and fee increases.
The New Mexico House of Representatives passed a spending plan late Wednesday that boosts funding for classrooms and the courts, while cutting money for colleges and universities and leaving most other agencies with no new money. A companion bill also headed to the Senate, House Bill 202, would raise more revenue for future years by boosting fees and taxes. The $250 million a year in new ongoing revenue is needed to avoid more spending cuts and to replenish cash reserves, said sponsor Carl Trujillo, D- Santa Fe. “We are bleeding, we need to stop that bleeding,” Trujillo said as he held up a graph showing the state’s diminished reserves. The House approved the revenue measure first, because the proposed budget needs some $157 million in additional money to meet the constitutional requirement for a balanced budget.
Like a town dance or charity dinner, Judge Jeff Shannon’s visits to Peñasco were announced in black movable letters on a marquee in front of the community center. Every other Friday, Shannon or the other magistrate judge in Taos County, Ernest Ortega, would drive through the mountains from their courthouse about 45 minutes to the north and hold court in Peñasco, an unincorporated community of nearly 600 people in the shadow of Jicarita Peak. While hardly ceremonious, the community center was practical. The judges could use the copy machine for free, and the building was a gathering place. Locals sometimes played pool while the judges held court equipped with little more than a box of files and rubber stamps, handling traffic citations and other minor offenses, saving at least a few residents of southern Taos County a 60-mile round-trip drive into town along wending forest roads.
With the state still running a deficit and reserves depleted, Democrats in the New Mexico House of Representatives have identified four tax or fee increases they say would prevent more cuts to education and put the state on better financial footing. The initiatives — taxing all internet sales, raising the permit fee on heavy trucks, closing a loophole that benefits nonprofit hospitals and increasing the tax on vehicle transfers — could raise more than $200 million in ongoing revenue. Some of it would go to avoid cuts in state agencies and some to beef up reserves. The move to bring together the House Democratic caucus came on the same day as state economists restated a revenue forecast from December that shows the economy has stabilized but reserves are far below the desired level of $300 million, or 5 percent of recurring revenue. The reserve account for the $5.6 billion budget at the end of the fiscal year on June 30 is projected at 1.6 percent.
State lawmakers say revenues are no longer deteriorating but remain flat, and they are moving forward on a 2018 budget with proposals to infuse new revenue — including tax increases — to balance spending and replenish reserves. A new consensus revenue estimate for fiscal year 2018 was expected to be released Wednesday but was pulled back for more study. Still, lawmakers said they do not expect a significant change from December, when economists were forecasting a $125 million deficit for the 2018 fiscal year, which begins July 1. “I don’t believe there’s going to be a material change,” Sen. John Arthur Smith, D-Deming, told the Senate Finance Committee. A forecast presented halfway through last year’s legislative session showed state revenues cratering from the collapse of crude oil prices.