January 22, 2017

Budget crisis pushes session to breakneck start

The New Mexico State Capitol, or Roundhouse Wikicommons.

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.

The crunch has led to a pace that staffers describe as resembling that of a special session. Instead of leaving the weightier issues until legislators have settled into their committee assignments, Democratic lawmakers are trying to get a few solvency bills onto the governor’s desk as soon as possible.

“We don’t have a choice,” said Rep. Bill McCamley, D-Mesilla Park. “It’s a fourth-degree felony for the state treasurer to spend money the state does not have.”

This is familiar territory for lawmakers.

In late September, Gov. Susana Martinez called legislators to the Capitol for a special session to address an even bigger budget deficit for the fiscal year that had ended in June and projected shortages in this year’s budget. But that fix was a bit easier. After a week mostly consumed by debate in the House over unrelated crime-and-punishment bills introduced by Republicans in what Democrats derided as a partisan, election-year ploy, legislators eventually agreed to cut spending for most facets of state government. They also drained $200 million from an investment account financed by a settlement with the country’s biggest tobacco companies because of the illnesses caused by cigarettes.

The solvency measures still left a gap in the budget, though, and lawmakers are back to grapple yet again with projected deficits, in part because revenue from oil and gas production has declined.

With state reserves almost empty, there are few, if any, simple options remaining.

And disagreements over what exactly to cut this time around could hold up what has so far been a swift-moving session.

The Senate approved with near unanimous support a slate of solvency bills on Wednesday, returned for a few hours on Thursday and then recessed until Monday. House members have splintered along party lines on nearly identical proposals for balancing the budget.

If the House cannot easily reconcile its proposals with the Senate’s, getting solvency measures onto the governor’s desk could take longer. The governor only has three days during a session to sign or veto a bill. And if she rejects the solvency proposals, the quick start could come in handy because it would leave legislators with time to respond.

Another factor is there are only five months left in the fiscal year. Waiting until the end of the session in mid-March to approve solvency bills would leave state agencies, school districts and other public entities in purgatory as they try to anticipate how much money they will have and how many cuts they need to make.

Taking up the solvency measures on Saturday morning, Democrats said the bills were urgent and depicted a state in financial crisis in part by the actions of Republican leadership in the House for the past two years.

But Republicans called for pause, arguing that legislators were acting too quickly in executing cuts that will be felt back home. They depicted Democrats as too quick to slash state funding for schools and fire departments.

“I will vote ‘no’ only because I want a little more time,” Minority Leader Nate Gentry, R-Albuquerque, said during a debate on a proposal that would alter how the state distributes money for fire departments and law enforcement agencies.

Democrats were quick to say it was a solvency plan approved by a Republican-controlled House last year and partly vetoed by the governor that ended up leaving New Mexico with the deficit it now faces.

“If we didn’t have those vetoes, we wouldn’t have been this deep with the cuts we have to make now,” said Majority Floor Leader Sheryl Williams Stapleton, D-Albuquerque.

Stapleton signaled that Democrats will push for new revenues in writing the budget for next year. But raising taxes or closing loopholes would not generate revenue in time to close the deficit in the next few months.

The Senate’s quick bipartisan passage of solvency bills came as no surprise.

“There’s a different decorum in the Senate,” said freshman Sen. Liz Stefanics, D-Cerrillos, who served one term in that body in the 1990s.

With less infighting, fewer members and longer terms, the Senate traditionally has had a reputation as the Legislature’s more deliberative body. Members of the House have a reputation for sticking to the party line, making it the more predictable chamber because almost no one breaks from the partisan ranks.

But the pace of moving through bills has changed in recent years, with the Senate cranking through key legislation, often with bipartisan support, as the House takes a slower tack and bogs down on bills with debate over amendments.

The speed of this year’s session is breakneck compared to recent times.

In 2014, lawmakers approved only one bill during the first two weeks of a 30-day session — a measure to pay their staff and legislators’ daily expenses. The scope of 30-day sessions every even-numbered year is typically limited to the budget, while 60-day sessions every odd-numbered year tend to have less clearly defined objectives.

The 60-day session and the lawmaking that goes with it will not really begin in earnest until the budget is balanced.

Moody’s Investors Service downgraded the state’s bond rating last year. An even lower bond rating, plus higher costs for borrowing money for brick-and-mortar projects, are possible unless the budget crisis is solved so the Legislature can move ahead to next year’s budget, said Rep. Antonio “Moe” Maestas, D-Albuquerque.

“We need cash,” he added.

Contact Andrew Oxford at 505-986-3093 or aoxford@sfnewmexican.com. Follow him on Twitter @andrewboxford.