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.
Gov. Susana Martinez announced Tuesday her proposal to balance the state budget, which involves moving $268.5 million from various state agencies. “This is a responsible budget that reduces the size of government while at the same time protects the progress we’ve made in diversifying our economy, reforming our education system, and keeps our communities safe,” Martinez said in a press release. The proposal includes taking $120 million from public education in funds that Martinez’s press release referred to as “slush funds.”
Sen. John Arthur Smith, D-Deming, told NM Political Report that the proposal is a “starting point for negotiation purposes,” but that real discussions will happen in committee meetings once the legislative session begins next week. Smith, a fiscal conservative, also criticized Martinez’s proposed sweep from public schools. “I’m not as harsh on education as she is,” Smith said.
The New Mexico Legislature will convene for a special session this Friday according to multiple reports. It’s still unclear how long lawmakers will meet. A special session is necessary to deal with a nearly $600 million budget deficit from this year and a recently-completed budget year. The state is required to balance its budget each year. Martinez will also add some high profile bills on crime to the call, according to multiple media reports.
RED RIVER — The state is facing a big hole when it comes to the state budget, lawmakers were told at the latest meeting of the interim Legislative Finance Committee. The projected $325 million deficit for the current year’s budget comes in part because state revenue projections from January were off by more than half a billion dollars. A larger-than-expected downturn in the oil and gas industry made a big part of the decline. This year, the state House of Representatives passed a budget based on the January projections, but the state Senate drastically slashed that budget before sending it back to the House. But even the big cuts in the final budget for this year leave a lot to be done.
Just a few things that we noticed at the session that didn’t quite make it into a full story. —At the end of the Senate floor session on, Sen. Gerald Ortiz y Pino, D-Albuquerque, spoke about priorities for this year’s legislative session. He says that if they did all of them “there would be no new money available for anything else” for several years if they were all passed. “I know that tapping the permanent fund in some way lessens the amount available in the future,” he says. He says Richardson cut the income tax “drastically” “and lost hundreds of millions of dollars of revenue” and that they cut corporate taxes under Martinez.
Gov. Susana Martinez’s regular list of legislative priorities was joined by a number of public safety initiatives that confirmed that this year would be a session with a lot of tough on crime rhetoric. Martinez, a former prosecutor, spoke about the need to curb crime and spoke about how increased sentencing is the way to do that. She laid out this and two other issues—education and jobs—as priorities at the top of her speech, which she read off Teleprompters on Tuesday afternoon. She spoke passionately about the deaths of two police officers while in the line of duty, officers Nigel Benner of Rio Rancho and Dan Webster of Albuquerque. She said “they were heroes to strangers.”
Their widows were in attendance, guests of Martinez.
The latest dire predictions for the budget came from the Greater Albuquerque Chamber of Commerce, just a day before legislators gather and Gov. Susana Martinez gives her State of the State Address. In an online newsletter previewing the session, the Chamber started the discussion of the budget by saying, “It’s not going to be a fun year.” The reason? Oil prices. The budget projections assumed nearly $50 per barrel of oil.
Stressing priorities and the state’s shaky energy revenue source, Gov. Susana Martinez proposed a budget with a $228 million increase in recurring state spending. That comes out to a 3.7 percent increase over the previous year’s budget. At a press conference in a downtown Albuquerque building that houses the state Corrections Department, Martinez said her proposed budget emphasizes “three things above all others”— education, public safety and jobs. “Keeping New Mexicans safe, reforming and improving public education, and creating jobs by diversifying our economy and helping small businesses grow,” she said. The proposal comes even as legislators warn about the effects of low oil prices that show no sign of increasing.
New Mexico Political Report recently wrote about New Mexico’s trouble with accurately predicting future state revenues. The problem, it turns out, is a common one among many states and the projections are only becoming more complex each year. In the past 25 years, states revenue projections have become less and less accurate, according to a report released in March by the Pew Charitable Trusts and the Nelson A. Rockefeller Institute of Government. This is largely because state revenue sources are becoming increasingly volatile. Chief among them is the corporate tax, a point that New Mexico Political Report highlighted last week.