January 23, 2017

House scales back cuts to school budgets

The seal of the state of New Mexico in the House

The state House of Representatives agreed Monday evening to soften the financial blow to New Mexico’s public schools.

With little discussion, House members voted to scale back cuts for districts and charter schools from a total of $50 million to about $38 million during the next five months. The cuts would be a big part of balancing the state’s budget.

Proposed by Rep. Patty Lundstrom, D-Gallup, the change ensures that each district or charter still has cash reserves of at least 4 percent of its budget. Those beneath 4 percent in reserves would not face cuts.

The reductions are one part of four bills designed to close a deficit estimated at $69 million for the budget year that ends in June. The House has approved all of those measures to bolster the state’s depleted financial reserves after a downgrade of New Mexico’s bond rating.

Though the school bill passed in a few minutes on a bipartisan vote of 45-22, the Senate still has to consider the change.

Veronica Garcia, superintendent of the Santa Fe Public Schools, welcomed the House amendment, describing it as a “reasonable and sound compromise.”

“The previous proposal would leave a quarter of districts in financial difficulty,” Garcia said.

Garcia said her district would see its funding cut by about $1.6 million instead of the $1.9 million approved by the Senate last week. Santa Fe’s school system had 5.6 percent of its budget in reserves.

To make up for the smaller cut to school funding, the House approved a change to a separate bill, moving two years’ worth of funding for water projects to the general fund for a savings of about $24 million.

But Republicans raised concerns about a provision in the bill taking funding from an economic development program that local governments can tap to build roads or undertake other projects to attract businesses. In all, the bill would drain more than $11 million from the Local Economic Development Act, leaving it with about $21 million.

Republicans said the state cannot afford to give up money for economic development as it struggles with the second-highest unemployment rate in the country. They pointed to a recommendation by the Legislative Jobs Council for funding the program at an even higher level.

To avoid the cut, Republicans proposed taking about $12.5 million from the Public Employees Retirement Association, which funds legislators’ pensions.

“The Legislature really does need to have some skin in the game,” said Rep. Jim Dines, R-Albuquerque.

But proposals to tap the retirement fund have raised concerns among public employees and the unions representing them. They fear it would set a precedent for raiding the retirement account and weaken it.

And Democrats argued that the move would be unlawful, citing a provision of the state constitution that prohibits using money from the retirement association for any purpose that does not benefit its members.

Rep. Matthew McQueen, D-Galisteo, depicted the proposal as a ploy.

“I think it’s politically motivated,” McQueen said. “It’s designed to make us look bad.”

The House shot down the amendment in a vote along party lines.

But Minority Leader Nate Gentry, R-Albuquerque, said he hopes Republican Gov. Susana Martinez will review that decision. She has veto power on decisions made by the Democrat-controlled House and Senate.

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