NM lawmakers move swiftly on solvency bills

For the third time in just over a year, New Mexico lawmakers have to find a way to balance the state’s checkbook and pay outstanding bills before moving ahead with new initiatives. The state Senate and House of Representatives got started on that effort Wednesday as legislators worked to balance the $6 billion general fund […]

NM lawmakers move swiftly on solvency bills

For the third time in just over a year, New Mexico lawmakers have to find a way to balance the state’s checkbook and pay outstanding bills before moving ahead with new initiatives.

The state Senate and House of Representatives got started on that effort Wednesday as legislators worked to balance the $6 billion general fund with transfers and cuts to finish out the current budget year, which ends June 30.

On a bipartisan vote, the Senate approved and sent to the House four separate measures that should erase a projected $70 million deficit and replenish depleted reserves, partly by targeting school district cash balances and postponing spending on various projects. The House, where a key committee cleared legislation on Wednesday, is likely to vote on the plan Thursday.

“There are no good choices. There are only bad choices,” Rep. Paul Bandy, R-Aztec, said during a meeting of the House Appropriations and Finance Committee.

The state constitution bars the governor and state treasurer from spending more money than New Mexico is collecting in taxes and fees. Lawmakers passed a solvency package in February, but that proved insufficient as revenues fell. They returned for a special session in October, trimming even more spending from state operations, including public schools and universities.

“We thought we were in compliance after the special session,” said David Abbey, director of the Legislative Finance Committee, which oversees agency appropriations. “It needs to be addressed swiftly.”

Democrats who control both the House and Senate said the state can only spend the money it has. If Republican lawmakers want to cut less, they ought to send that message to Republican Gov. Susana Martinez, who has refused to increase taxes or fees during her administration.

“We’re out of compliance with state statute,” said Rep. Patricia Lundstrom, D-Gallup, who chairs the House Appropriations and Finance Committee. “Nobody likes any of this.”

Her committee approved bills Wednesday that include:

* Tapping unspent money for some public works projects and using it for day-to-day operations, then reviving the projects by issuing bonds to investors.

* Sweeping money from dozens of state accounts, including money from capital building repairs, wildlife protection and the Local Economic Development Act. Some $11 million would come from special initiatives in the Public Education Department for teacher merit pay and a program to provide extra help to students.

* Moving some $49 million of unspent balances from charter schools and public school districts into the state general fund.

While the Senate Finance Committee approved most of the measures with a strong bipartisan vote, it was clear there would be more resistance in the House, where Democrats regained a majority after the November election.

One of the points of contention whether to take money earmarked for a state economic development program that is used as a closing fund to help new and expanding businesses in New Mexico. The grants are allocated to local communities to build the public structure required by businesses. These projects include roads, sewer and water lines, utility work and even airport hangars.

Economic development grants were expanded to $50 million in 2013 with broad support from both parties as a way to send a message that New Mexico can compete to provide the services needed for companies such as Facebook, which is building a data center in Los Lunas that will benefit from $10 million in infrastructure paid for by the state.

It has also been popular with smaller firms that don’t have the capital for the road and sewer work often required for manufacturers.

Gov. Martinez opposes any transfer from the economic development account. The $50 million fund was supposed to be permanent, with money staying at the state Economic Development Department, even if it is not all allocated, as an incentive for business recruitment.

According to legislative staff, $34 million of the fund is not designated for a project. The House version of the solvency bill would transfer $14 million of that to the general fund.

Rep. Larry Larrañaga, R-Republican, said the $50 million fund sends a strong message to businesses but cutting it tells them, “there is no money for expansion of economic development.”

Not included in the bills moving forward in the Legislature is a Martinez-backed proposal to decrease the state’s contribution to public employee pensions by 3.5 percent. Her administration argues the plan bolster reserves.

But Democratic leaders, including Senate Finance Chairman John Arthur Smith of Deming, said the so-called pension swap would not be considered. Smith said it amounted to a cut in take-home pay for public employees, who would have to divert more of their salaries into their retirement accounts.

In June 2015, general fund reserves stood at more than 11 percent, but finished 2016 at 2.3 percent or $145 million.

The level of state reserves has been controversial since Moody’s lowered the state credit outlook, which can increase the cost of borrowing money for state governments as well as school districts.

Approving the solvency measures this week is a priority for the new Democratic leadership in the House and Senate. They want to put the fiscal troubles of recent years behind so they can move ahead.

Resolving the current-year deficit will allow lawmakers to start crafting a spending blueprint for the fiscal year that starts on July 1, when new spending cuts for government agencies are proposed.

Contact Bruce Krasnow at 505-986-3034 or [email protected]

We're ad free

That means that we rely on support from readers like you. Help us keep reporting on the most important New Mexico Stories by donating today.

Related

Emily’s List endorses seven candidates for Legislature

Emily’s List endorses seven candidates for Legislature

Emily’s List, a nonprofit that supports women candidates and reproductive rights, endorsed seven incumbents facing general election opponents in New Mexico legislative elections. All…
Equality New Mexico endorses 15 legislative candidates

Equality New Mexico endorses 15 legislative candidates

A New Mexico-based LGBTQ rights organization endorsed 15 candidates for state House and Senate seats for the 2024 elections.  Marshall Martinez, executive director of…
Lujan Grisham pocket vetoes two bills

Lujan Grisham pocket vetoes two bills

Gov. Michelle Lujan Grisham pocket vetoed two bills the legislature passed this legislative session: one changing the Cybersecurity Act and the other concerning law…
BLM announces final methane waste rule

BLM announces final methane waste rule

The federal Bureau of Land Management announced its final methane waste rule on Wednesday. These new regulations clamp down on the practice of venting…
What consumers, farmers should know about the flu impacting dairy cows

What consumers, farmers should know about the flu impacting dairy cows

Migrating birds appear to have caused a virus in dairy cattle that is causing reduced milk production. So far, the disease, which initially started…
Republicans seek to limit national monument designations

Republicans seek to limit national monument designations

Republican-backed legislation in the U.S. Congress would make it harder for the government to designate new national monuments. The proposed Congressional Oversight of the…
Amid new graduation requirements, what do high schoolers want to learn?

Amid new graduation requirements, what do high schoolers want to learn?

By Margaret O’Hara, The Santa Fe New Mexican The main things that bring Brayan Chavez to school every day: Seeing, talking to and engaging with…
Special ed teachers hope lawmakers OK pay raises, admin changes

Special ed teachers hope lawmakers OK pay raises, admin changes

By Margaret O’Hara, The Santa Fe New Mexican Brittany Behenna Griffith has a laundry list of adjectives to describe the ideal special education teacher:…
Lawmakers must find consensus on competing education spending plans

Lawmakers must find consensus on competing education spending plans

By Margaret O’Hara, The Santa Fe New Mexican A challenging task awaits New Mexico lawmakers in the next 30 days: Reconciling three very different…
Health workers fear it’s profits before protection as CDC revisits airborne transmission

Health workers fear it’s profits before protection as CDC revisits airborne transmission

Amy Maxmen, KFF Health News Four years after hospitals in New York City overflowed with covid-19 patients, emergency physician Sonya Stokes remains shaken by…
Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Gov. Michelle Lujan Grisham announced Friday $10 million in funding from the federal American Rescue Plan Act was awarded to six tribal nations and…
Proposal to curb executive powers moves to House Judiciary

Proposal to curb executive powers moves to House Judiciary

The House Government, Elections and Indian Affairs Committee discussed a potential constitutional amendment that seeks to limit the governor’s executive powers. The committee approved…
U.S. Supreme Court hears case to restrict access to medication abortion

U.S. Supreme Court hears case to restrict access to medication abortion

The U.S. Supreme Court heard the case about the regulations around mifepristone, one of a two-step regime for abortion medication, on Tuesday. FDA v.…
At stake in mifepristone case: Abortion, FDA’s authority, and return to 1873 obscenity law

At stake in mifepristone case: Abortion, FDA’s authority, and return to 1873 obscenity law

Lawyers from the conservative Christian group that won the case to overturn Roe v. Wade are returning to the U.S. Supreme Court on Tuesday in pursuit…
Supreme Court to hear two abortion cases this spring

Supreme Court to hear two abortion cases this spring

Later this month, the U.S. Supreme Court will hear oral arguments on the case against the abortion medication mifepristone. It will hear a second…
New Mexico Medicaid to cover cost of over-the-counter oral contraception

New Mexico Medicaid to cover cost of over-the-counter oral contraception

New Mexico Medicaid announced on Wednesday that it will cover the cost of Opill, the first oral contraception approved for over-the-counter use. It is…
U.S. Supreme Court hears case to restrict access to medication abortion

U.S. Supreme Court hears case to restrict access to medication abortion

The U.S. Supreme Court heard the case about the regulations around mifepristone, one of a two-step regime for abortion medication, on Tuesday. FDA v.…
At stake in mifepristone case: Abortion, FDA’s authority, and return to 1873 obscenity law

At stake in mifepristone case: Abortion, FDA’s authority, and return to 1873 obscenity law

Lawyers from the conservative Christian group that won the case to overturn Roe v. Wade are returning to the U.S. Supreme Court on Tuesday in pursuit…
San Juan County, Navajo Nation settle redistricting case

San Juan County, Navajo Nation settle redistricting case

The Navajo Nation and San Juan County reached an agreement Monday about commission districts after the tribe alleged that its members were not adequately…
MIT ranks NM elections most well-run in the U.S.

MIT ranks NM elections most well-run in the U.S.

New Mexico’s 2022 election was ranked most well-run in the country by Massachusetts Institute of Technology’s Election Data and Science Lab’s Elections Performance Index.…
Emily’s List endorses seven candidates for Legislature

Emily’s List endorses seven candidates for Legislature

Emily’s List, a nonprofit that supports women candidates and reproductive rights, endorsed seven incumbents facing general election opponents in New Mexico legislative elections. All…
BLM announces final methane waste rule

BLM announces final methane waste rule

The federal Bureau of Land Management announced its final methane waste rule on Wednesday. These new regulations clamp down on the practice of venting…
U.S. Supreme Court hears case to restrict access to medication abortion

U.S. Supreme Court hears case to restrict access to medication abortion

The U.S. Supreme Court heard the case about the regulations around mifepristone, one of a two-step regime for abortion medication, on Tuesday. FDA v.…
What consumers, farmers should know about the flu impacting dairy cows

What consumers, farmers should know about the flu impacting dairy cows

Migrating birds appear to have caused a virus in dairy cattle that is causing reduced milk production. So far, the disease, which initially started…

GET INVOLVED

© 2023 New Mexico Political Report