October 24, 2016

Martinez signs bill slashing budget, but saves PED secretary priorities

Gov. Susana Martinez signed a bill passed during the recently-completed legislative special session that cut spending in most state agencies, but used her line-item veto authority to spare “below-the-line” funding for the Public Education Department.

The bill was part of the effort to solve a budget problem that is estimated to leave the state hundreds of millions of dollars in the hole.

This education funding, which restored the $22 million the version passed by the Legislature, goes towards projects of PED that are not part of the state equalization guarantee, the formula that seeks to provide equal funding per student across the state.

These funds go towards programs like the controversial merit pay program as well as popular programs like “breakfast after the bell” and after-school programs.

Democrats and Martinez’s administration have clashed over some of the funding since she was first sworn in.

Martinez slammed the Legislature for passing the bill with those education cuts intact (though the House version subtracted the cuts from $25 million to $22 million).

“For our legislature to go so far overboard shows a stunning lack of commitment to reforming education, improving our schools, and helping students in New Mexico succeed,” Martinez wrote in explaining her line-item vetoes.

She went on to say she asked PED to voluntarily cut $4.5 million in spending.

Martinez also vetoed language asking that higher educational entities should prioritize the five percent cuts to non-instructional areas of their budgets and language requiring PED to report to the Legislature on how much money was transferred from funds for instructional materials and school transportation to the state general fund.

She mentioned that “about one-third of New Mexico’s government revenues depend upon oil and gas production” in not just royalties, but personal and corporate income taxes and gross receipts taxes in oil-producing areas.

Martinez said the state’s reserves were “responsibly saved for a ‘rainy day’ like this” and “have helped to soften the blow” that came from plummeting revenue from the oil and gas industry.

The state used much of the reserves in the regular legislative session earlier this year to cover budget deficits. The state transferred virtually all of the remaining reserves to close the books on the previous fiscal year, which ended June 30, and move the current fiscal year toward solvency.

Legislators acknowledged during the special session that even with the deep cuts, over five percent to most state agencies, and the movement of reserves, there will still be more work to do during the next legislative session to balance the budget.