The tax bill Congress is considering could blow up New Mexico’s budget—as early as next year. New Mexico Senate Finance Committee chair John Arthur Smith, D-Deming, and House Appropriations and Finance Committee chair Patricia Lundstrom, D-Gallup, sounded the alarm with a letter to members of the congressional delegation and Gov. Susana Martinez. The two wrote the state could lose nearly $600 million in federal funding in the coming year, including over $430 million in federal mineral leasing payments. This is money the federal government pays to states for oil and gas drilling and coal mining on federal lands within their borders. “Loss of FML revenues, which primarily fund public education in New Mexico, would have a devastating impact on the state’s budget and would wipe out the reserves our state has struggled to rebuild,” the two legislators wrote.
The House of Representatives passed three pieces of budget legislation Wednesday afternoon and evening with little debate. The first restored funding to higher education and the state Legislature. Earlier this year, Gov. Susana Martinez vetoed the entire budgets for both during the regular session, citing her opposition to tax increases. Two Republicans—state Reps. Jason Harper of Rio Rancho and Rod Montoya of Farmington—voiced concerns for the spending bill.
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.
The governor vetoed the entire higher education budget totaling almost $3 billion, along with the entire budget for the Legislature, to force lawmakers back to Santa Fe for a special legislative session to redo the state spending plan for the budget year that starts on July 1 and to overhaul the gross receipts tax system. She says she is against raising taxes on New Mexicans but willing to allow some new revenue to support the budget. We’ve seen “no tax” pledges coupled with deeps cuts to higher education in other states and how distressing the combination has been to students, families, and communities. Patricia Lundstrom is a Democratic state Representative from the 9th District. For years, a number of governors have pitted higher education against corporate and other tax cuts to spectacular and devastating results.
One of the biggest winners in the just concluded 60-day session of the New Mexico Legislature was a man who never set foot in the Roundhouse and, in fact, never came close to crossing the state border. His name is Donald J. Trump, the president of the United States. Republican Trump lost New Mexico in November by 8 percentage points, and Democrats control both the state Senate and House of Representatives. Even so, several pieces of legislation aimed at Trump failed to get traction in the Legislature. Senate Bill 118, sponsored by Sen. Jacob Candelaria, D-Albuquerque, would have required presidential candidates to disclose five years of personal income taxes to get on the general election ballot in New Mexico.
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.
Hopes of capping the amount that storefront lenders in New Mexico can charge in interest and fees waned Monday after a powerful lawmaker’s attempt to close a loophole in the bill met with cool resistance. House Bill 347 and a companion measure in the Senate represent the most significant movement in years by lawmakers to regulate an industry that consumer advocates say preys on poor people with annual rates that can climb as high as 9,000 percent on some loans. By capping most annual percentage rates at 175 percent, the bills have won backing from lobbyists for many storefront lenders and some consumer advocates who view it as a palatable compromise. But the proposal still prompted skepticism Monday in the House Judiciary Committee, which postponed a vote on the bill after House Speaker Brian Egolf asked the sponsors to eliminate an exception to the cap of 175 percent. This casts doubt on the proposal’s prospects as the legislative session enters its last 12 days.
luInterest rates for many small storefront loans in New Mexico would be capped at 175 percent and required to have a term of at least four months under a bill that got a unanimous recommendation from a House committee Friday. The House Business and Industry Committee gave a positive recommendation to House Bill 347, sponsored by state Rep. Patty Lundstrom, D-Gallup. Earlier this week the committee delayed action on the bill to allow members of the small-loan industry to negotiate a compromise with backers of a bill calling for capping interest rates at 36 percent. However, Dan Najjar, a lobbyist for Axcess Financial, a company specializing in small installment loans, said that while some changes were made to the original version of the bill, the two sides failed to reach a consensus. The committee action represents the latest round in a long-running legislative battle over an industry which is attacked for charging exorbitant interest rates on short-term loans that the lenders say many New Mexicans depend on.
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.
The highly touted New Mexico True advertising campaign that spotlights the state’s culture, people and natural resources will not expand to new markets due to state budget constraints. State tourism chief Rebecca Latham told lawmakers Thursday her agency spends more than ever to promote the state, but that has come by reducing employees and consolidating services. New Mexico True promotes the state on airport billboards, print and social media in Dallas, Houston, Phoenix, Denver, San Diego, Chicago and most recently Austin. The next logical market is San Francisco, but Latham said the state does not have to money to grow into that market in the coming year. “We still firmly believe San Francisco is the next great market,” she said.