ByAndrew Oxford and Steve Terrell, Santa Fe New Mexican |
There were no threats of a government shutdown this time. Instead, a sort of political peace reigned as the 30-day legislative session ended Thursday with a $6.3 billion budget headed to the governor’s desk along with a bipartisan slate of crime legislation and pay raises for teachers and state police. The bombast and sense of crisis that marked the 2017 session seemed to evaporate as Gov. Susana Martinez sought to strike a conciliatory tone on her way out of office. But gone, too, were any major initiatives or innovative policy changes. With Martinez nearing the end of her term and the state’s financial outlook brightening but not totally sunny, the session ended anticlimactically, with lawmakers eager to avoid another partisan showdown as they also wait to see what direction the state’s economy — and the governor’s yet-to-be-elected successor — might take.
The Legislature’s two chambers are at odds over a proposed $6.3 billion state budget. Unlike recent years when financial problems prompted rounds of cuts, partisan fights and depleted reserves, the disagreements that emerged Tuesday came down to comparatively minor questions about funding roads. The Senate overwhelmingly approved a spending plan on Tuesday that provides bigger pay raises for state police than a version of the budget passed by the House of Representatives. The Senate version of the budget, approved 40-2 by members of that chamber, also provides millions of dollars in additional funding for the district attorney in Albuquerque and returns some of the money cut from school districts last year. But the Senate also scaled back the amount of money the House had approved for roads.
New Mexico’s savings keeps dropping —and now the state has one of the smallest cushions of any state in the nation. Even now, those reserves are still well below pre-recession levels. If no new money were coming in and the state government could rely only on those reserves, there would only be enough cash to run the state for 8.4 days. That’s according to The Pew Charitable Trusts and its analysis of states’ fiscal health. In Fiscal Year 2016, the amount of money New Mexico held back and put into savings—to pay for unexpected expenses or shore up the budget when revenues dip—was at its lowest level since 2000, according to Pew.
Both the House and Senate recessed Thursday afternoon—without officially ending the special session. Now, the governor has three days to take action on four bills aimed at tax changes and reinstating funding to the Legislative branch and institutes of higher education. By recessing until Tuesday instead of adjourning, the House and Senate could still introduce new legislation to replace anything Gov. Susana Martinez might veto. Martinez, in an atypical statement, praised the Legislature for some of their work. “In a bipartisan manner, lawmakers passed my plan to put more funding toward cancer research and student financial aid, while at the same time forfeiting their pork projects and a small portion of their personal legislative retirement accounts to fill the budget hole — something I’ve urged them to do for months,” she said.
A House panel passed a bill to restore funding vetoed by Gov. Susana Martinez for next year for higher education, courts and the state Legislature Wednesday afternoon. Meanwhile, tax packages that would increase taxes on things like internet sales and gasoline also moved forward. The budget vote came mostly on party lines save for state Rep. Sarah Maestas Barnes, R-Albuquerque, who joined Democrats in supporting it. Maestas Barnes was also the lone Republican to vote for a failed override attempt of Martinez’s budget vetoes earlier in the day. In total, the bill appropriates roughly $765 million—$745 million for higher education and $19 million for legislative offices—for the next fiscal year, which begins July 1.
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.
In a late-night surprise Wednesday in the House of Representatives, Rep. Jim Trujillo, D-Santa Fe, who has missed most of the legislative session because of a heart operation, showed up to help pass a proposed constitutional amendment that would take an extra one percent of interest earnings from New Mexico’s $20 billion land grant permanent fund to help pay for early childhood education. The House voted 37-32, mostly along party lines, to pass House Joint Resolution 1, a vote which had been delayed for more than a week, partly because of the Santa Fe legislator’s absence. Trujillo, a long-time advocate of the proposal, received a standing ovation when he walked into the chamber immediately before the House ended a three-hour debate. Related: Education chiefs fail to appear at hearing
The measure now goes to the Senate, where the road is expected to be much rougher. The proposal is certain to meet resistance from the Senate Finance Committee, chaired by Sen. John Arthur Smith, D-Deming, a longtime opponent of taking extra money out of the land grant fund.
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.
New Mexico’s Road Fund was once considered a pot of money that would keep growing as more people in the state bought higher-priced cars and trucks, then drove extensively for business and recreation. Part of that has come to pass. With three interstate highways crossing New Mexico, increased trucking activity and record tourism, drivers are logging more miles. But they also are buying less gasoline, and the fund for road improvements and maintenance has stagnated. “We’ve seen an increase in traffic in New Mexico,” said state Rep. Larry Larrañaga, R-Albuquerque, a member of the House Transportation Committee.
While lawmakers say measures to patch an unconstitutional budget hole are the 2017 Legislature’s first priority, disagreements over a solvency package Tuesday kept most of the plan from moving forward to the governor. Four bills together would roll back some capital construction projects, sweep money from cash balances, including dollars earmarked for education reforms and economic development, and tap into reserve funds squirreled away by school districts and charter schools. “No one’s happy about having to cut the public schools in the middle of the year,” said Sen. Mimi Stewart, D-Albuquerque. The exact amount of money that lawmakers scrape together will depend on the final version, but the legislation would beef up state government’s $6 billion general operating fund by adding some $260 million. If signed by Gov. Susana Martinez, as expected, the solvency plan would close a $70 million deficit for the fiscal year that ends June 30.