An effort that had broad support to bring in more money to New Mexico government by taxing all internet sales has mushroomed into a measure to raise additional money from hospitals, trucking companies, nonprofit organizations and car buyers. Democrats say the amendments to House Bill 202, originally an effort to raise $30 million by expanding the gross receipts tax to out-of-state internet transactions, are necessary to restore cash reserves and put the state on better financial footing to avoid further cuts to school districts and another credit downgrade. With the changes, the bill is now expected to bring in $265 million in ongoing revenue. Some $1 million a year would come from the legislative retirement fund. A sponsor of the tax bill, Rep. Carl Trujillo D-Santa Fe, said lawmakers have cut spending, both during the 2016 session and again in an October special session.
A state Senate committee Monday night approved $1.6 million in funding for the courts, enough to pay for jury trials through June 30, the end of the fiscal year. Still, it was unclear whether the legislation represented a temporary or a permanent step back from the brink of a breakdown for the judicial system. The committee action was another pull in a political tug-of-war between the Democratic-controlled Legislature and Republican Gov. Susana Martinez over funding for the courts. The game is being played out against a backdrop of a state budget crunch across all of government. In recent weeks, Martinez has twice vetoed money to avoid a halt to jury trials and potential dismissal of criminal charges against defendants.
The state House of Representatives rushed Monday evening to approve emergency funding so that New Mexico’s court system would have enough money to pay jurors and interpreters for at least the next two months. The 68-0 vote sends the funding bill to the Senate with the clock ticking on what Supreme Court Chief Justice Charles Daniels said could be a breakdown of New Mexico’s justice system. He said the state will be forced to end jury trials March 1 for lack of money. House members approved the bill just days after Republican Gov. Susana Martinez vetoed emergency court funding when Democrats added it to a different bill. Judges and court administrators aren’t the only ones feeling the pain of New Mexico’s cash shortage.
Gov. Susana Martinez signed three bills Tuesday to balance the state’s budget, taking about $46 million from the reserves of public schools. But she vetoed cuts to an economic development program and various accounts in New Mexico government. The bills could raise $190 million for the state’s general fund, closing a deficit that was projected to total about $80 million. The measures also will replenish government reserves, though not nearly to the extent of plans proposed in early January by legislative staff and the governor’s own administration. The package will leave the state’s cash reserves at 1.8 percent, rather than nearly 3 percent as previously proposed.
Three days after Republican Gov. Susana Martinez vetoed funding for the Legislature, lawmakers on Monday approved another measure to pay for the 60-day session and provide emergency cash to pay jurors in the state’s court system. Martinez’s veto demonstrated how even a routine bill that usually passes unanimously at the beginning of each legislative session could become mired in partisan politics this year. Unclear is whether Martinez will sign the latest bill. If she does, it would hearten employees at the Capitol who are expecting a paycheck at the end of this week. But the Senate stripped funding from the bill to pay for the Legislature’s year-round operations, meaning it also unclear whether cuts might still be in store for the offices responsible for analyzing bills, tracking state finances and serving as a watchdog on government.
When state Human Services Secretary Brent Earnest goes before lawmakers to speak about his budget for the Medicaid insurance program, many want to run for cover. One year, he needed as much as $100 million from the general fund to fully pay for all the new enrollees under the federal Affordable Care Act and provide the same level of service. Last fall, he said he needed another $80 million for the fiscal year that begins July 1. On Thursday, he told the House Appropriations and Finance Committee that request had dropped to $42 million. “This is a significantly better picture than you saw in the fall,” Earnest said.
Passage of a “feed bill” to cover the costs of the New Mexico Legislature typically is a slam dunk, unanimously adopted as the first order of business at each annual lawmaking session in Santa Fe. But in an environment where partisanship can flare up in myriad ways, even that piece of legislation has become a battleground. Gov. Susana Martinez on Friday night vetoed funding for the Legislature, taking on Democratic lawmakers less than two weeks into a 60-day session so far dominated by debate over the state’s budget crisis. In a veto message, Martinez denounced Democrats for rejecting a proposal from Republicans in the state House of Representatives to reduce spending by the legislative branch at a time when other limbs of state government are being forced to get by with less. “Despite repeatedly declaring that we’re in a ‘constitutional budget crisis,’ the Senate and House Democrats continue to find ways to protect themselves and their budget — even as they have squeezed money out of other areas of government,” wrote Martinez, a Republican.
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.
Very little legislating typically occurs during the first week of New Mexico’s 60-day legislative session. Instead, the first days are more commonly dedicated to speeches, organizational meetings of various committees and perhaps a few proclamations recognizing prominent New Mexicans or the successes of high school sports teams.
But with the state in a budget crisis, this year’s session has started with a sprint, especially in the Senate. “We’re moving rather rapidly,” Sen. John Arthur Smith, D-Deming, said after his body approved four bills on the session’s second day to balance New Mexico’s budget in the face of a projected $69 million deficit. Those measures have moved to the House of Representatives for further consideration. Not until legislators balance this year’s budget can they begin work in earnest on a budget for the next fiscal year, which starts July 1.
What Republicans called pork, Democrats called crucial funding for communities and public safety. What Democrats called an effort to modernize accounting practices, Republicans called a gimmick. Less than a week after Gov. Susana Martinez encouraged lawmakers to work together to solve the state’s projected $69 million budget deficit, the House of Representatives on Saturday waged a partisan fight on two bills to make New Mexico solvent. Democrats, who control the House 38-32, saw their bills approved in votes that went mostly along party lines. Similar legislation easily cleared the state Senate with bipartisan support.