April 7, 2017

Martinez veto of tax package, large parts of budget pave way for special session

Andy Lyman

Gov. Susana Martinez delivering the 2017 State of the State Address.

The governor signed the Legislature’s state budget plan Friday morning—but with $800 million worth line-item vetoes, making a future special session a reality.

The vast majority of the money vetoed by Gov. Susana Martinez came from vetoing all funding for New Mexico colleges and universities. She cited the Senate’s lack of hearings for nominations of regents for “several higher education institutions,” calling it “a clear violation of its constitutional duty.”

In a separate statement, Martinez said she had to take out the “entire higher education budget” to balance the budget, but said this would be fixed in the special session.

Related: Banning guns for domestic abusers vetoed, conversion therapy ban signed among Martinez actions

Senate Majority Leader Peter Wirth denounced the veto of the higher education money.

“Governor Martinez has chosen to play extreme political games rather than act responsibly,” Wirth said. “Her attempt to use line-item vetoes to eliminate an entire branch of government and every higher education institution is outrageous.”

Wirth also said her veto actions on the budget sent “a clear signal to New Mexico families and national bond agencies that she is in denial about the serious financial problems facing our state.”

House Speaker Brian Egolf, D-Santa Fe, called the actions “beyond the pale,” specifically referencing the higher education veto.

“The Governor is clearly not serious about fixing our state’s budget problems or growing our economy,” Egolf said. “The people of New Mexico justifiably expected the Governor to act responsibly on the budget. By today’s actions, the Governor is turning her back on the bipartisan and responsible solution offered to her by the Legislature.”

Martinez said the Legislature “refused to bear their fair share of the burden” and reduce their funding at the same rate as the executive branch.

She also vetoed language that gave her authority for the executive branch’s Department of Finance and Administration to regularly consult with the Legislative Finance Committee, calling it “unnecessary.”

Martinez also vetoed a large tax package, a longshot for legislators since Martinez opposes  raising taxes. The tax bill would have helped balance the budget.

Related: Martinez signs, vetoes dozens of bills; the highlights

That bill, in addition to other changes, raised taxes on gasoline and diesel and made gross receipts taxes on nonprofit hospitals and other health care providers equal to that of for-profit hospitals. The bill also extended the state gross receipts tax to internet sales.

“From the beginning, I have said that I will not raise taxes, yet the Legislature continues to try to force tax increases on New Mexican families and small businesses,” Martinez wrote in her veto message. “I have also said I will consider truly comprehensive tax reform, reform that results in a simpler, more stable, and more predictable tax code. [This bill] does not do this.”

She says the tax package “would hit low-income and middle-class New Mexican families the hardest.”

“In the coming weeks, I will call the Legislature back to Santa Fe to finish the job they were supposed to do in the first place,” Martinez said in her statement.

Update: Added statement by Brian Egolf.