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.
While state lawmakers are pulling out all the stops to find “now money” to plug an expected deficit in the next fiscal year, Rep. Jason Harper has introduced a bill he hopes can put the state on better financial footing for decades to come. Harper, R-Rio Rancho, admits that House Bill 412, the New Mexico Tax Reform Act, is not a quick fix and will not patch the budget in fiscal year 2018 or even 2019. But by restructuring the state gross receipts tax and simplifying income and other tax policies, New Mexico will position itself for more solid growth in the new economy, he said. “It doesn’t help us fix the current budget problem,” Harper said of his bill, “but this hopefully prevents another budget problem.” The measure comes halfway through the 2017 legislative session, when reserve funds have been depleted by efforts to balance budgets for the last fiscal year and the current year, which ends in June, and many lawmakers are focused on raising enough new money to get through the upcoming year.
Debbie Pace says she cries when she goes to the Smith’s grocery store because she “can’t afford anything.” Pace, 59, of Albuquerque, says she receives just over $730 a month in Supplemental Security Income from the federal program for the disabled and others with little income. She also receives $33 in monthly food stamps. The $33 in food stamps goes quick, she says. So, she goes to a local church for free food.
A framed newspaper clipping adorns the wall outside the office of New Mexico Senate Majority Leader Peter Wirth. The piece, dated May 25, 2002, serves as a reminder of the time when Republican Gov. Gary Johnson, who had vetoed 700 bills in six years, finally overplayed his hand. One of those vetoes was the $3.9 billion spending plan for the coming fiscal year, a 1.1 percent increase over the previous year. Johnson, a fiscal hawk, said the plan didn’t go far enough to control the growth of Medicaid. With just a few weeks left in the fiscal year, the Democratic Party-controlled House and Senate called themselves back to Santa Fe for a special session to override the veto and keep the government operating.
In a bipartisan decision Friday, a Senate committee voted 5-0 in favor of a bill that would outlaw the use of conversion therapy to treat homosexual, bisexual or transgender minors. The vote by the Senate Public Affairs Committee for Senate Bill 121 came after emotional testimony from audience members, some of whom had undergone conversion therapy. Kei Cypher, a student at the Santa Fe University of Art and Design, said she was raised in a religious family in Colorado Springs, Colo., that was confused when she came out at age 13. “They told me it was something I got from MTV or video games,” she told the committee. “They took me to a therapist who told me it was a perversion and that I should snap my wrist with a rubber band or hold ice in my hands every time I had such thoughts.”
State legislators split along party lines Monday in advancing a proposed constitutional amendment that would use some of the $15 billion Land Grant Permanent Fund to help pay for early childhood education and other public education programs.
The House Education Committee voted 7-6 for a plan to fund pre-K programs with an extra 1 percent from the endowment. Democrats supported the measure and Republicans opposed it. “Fifteen-billion-plus dollars — that’s almost richer than Donald Trump,” said Rep. Christine Trujillo, D-Albuquerque, in voicing her support for the measure. Groups such as New Mexico Voices for Children have urged lawmakers for years to use a larger share of the money that flows into the $15 billion investment account from oil, gas and mineral extraction on state lands. The proposal, if approved by lawmakers this year and then by voters in the 2018 general election, would supply $39 million for early childhood education and another $91 million for K-12 public schools in 2020.
State lawmakers on Wednesday passed the last pieces of a plan to balance New Mexico’s budget for the current fiscal year and rebuild the state’s drained cash reserves, coming to compromises on cuts to education funding and an economic development program. Unclear is whether Republican Gov. Susana Martinez will veto any pieces of the solvency package for fiscal year 2017. She has vowed to protect funding for classroom instruction and the state’s “closing fund” intended to draw prospective investors to the state, but a proposal she preferred would have taken far more money from school districts’ reserve funds than the plan approved by lawmakers. Martinez has three days to act on the bills, and a spokesman said the Governor’s Office will need to closely scrutinize parts of the proposal, echoing the criticisms of House Republicans. “For example, lawmakers chose to protect their personal legislative retirement accounts, while at the same time tried to squeeze money out of other areas of government,” Mike Lonergan said in an email late Wednesday.
New Mexico legislators start their 60-day session Tuesday with plenty of unfinished business, including closing a projected budget deficit of about $67 million. But any hope that the passing of a rancorous election year and the ongoing budget crisis would inspire bipartisan compromise already seems to have evaporated. Instead, Republican Gov. Susana Martinez and top lawmakers have staked out positions that almost guarantee a clash over taxes and spending. In addition, more budget cuts are likely, no matter the outcome. Martinez proposed easing the projected deficit by requiring public employees to pay for a bigger share toward their pensions.
During September’s special legislative session, lawmakers agreed on fixes that added about $23 million in revenue. That was a start, but not nearly enough to solve the state’s budget crisis. On Wednesday, state legislators received little good news about the state’s revenue stream during a committee meeting. Even with that help, New Mexico’s bean counters dropped their revenue projections for the current fiscal year from previous estimates by more than $130 million. The state’s current fiscal year began in July and ends next June.
The latest update on the state’s budget situation was filled with negative news, including a large reduction from previous budget projections released in August. The current year’s budget is projected to be $69 million in the hole. For the fiscal year starting July 1, 2017, state budget experts project $300 million less money to spend than the budget in the current fiscal year—which itself saw massive cuts during the special session, with 5.5 percent cuts to most agencies. The update, presented by experts from the Department of Finance and Administration and the Taxation and Revenue Department Monday morning to the Legislative Finance Council, comes a month and a half before legislators go back to work during a regular legislative session to deal with next year’s state budget. During a special session in September and October, the Legislature plugged a $600 million budget deficit that encompassed last year’s budget and the current budget through a combination of tapping into reserves and making cuts.