March 12, 2019

Key Senate panel adjusts state spending plan

A key Senate committee on Monday unveiled 123 different changes to a $7 billion state budget approved by the House of Representatives, tweaking proposed raises for school teachers, funding for a marquee economic development program and plans to bring back soccer at the University of New Mexico.

The budget would mark an 11 percent increase over the current year’s spending plan as New Mexico enjoys a windfall of tax revenue from an oil and gas boom and as the new Democratic governor, Michelle Lujan Grisham, sets out an agenda that includes big education funding increases as well as filling vacant positions across state government after years of budget cuts.

The House approved the budget mostly along party lines last month, sending it to the Senate, where the Senate Finance Committee on Monday added about $19 million in spending to the plan and rearranged other expenses.

The changes include more than trebling funding for an economic development program to $60 million from $14 million. The Local Economic Development Act allows the state to pay for brick-and-mortar upgrades such as roads and utility connections as well as other costs associated with setting up businesses to the state. The Senate committee’s change brings funding for the incentive program closer to what Lujan Grisham had recommended in the budget she proposed in January.

The Senate Finance Committee also added more money for Medicaid, the Corrections Department, services for people with developmental disabilities and higher education.

Ultimately, the spending blueprint includes about $448 million in new money for public education, a 16 percent increase over the current year, following a court order to drastically improve schooling for certain groups of at-risk students.

“We’re making a serious effort to go ahead and answer whatever lawsuits are out there,” said Sen. James White, a Republican from Albuquerque.

But others are wary of the bill’s size, particularly given the state’s reliance on revenue from a volatile oil and gas industry.

“Politicians who like spending money really enjoyed this session,” said Senate Finance Committee Chairman John Arthur Smith, a Democrat from Deming.

School employees would still get a raise. But instead of teachers, principals and assistant principals getting “at least” a 6 percent raise as approved by the House, school districts would have to increase pay by “an average” of 6 percent.

School districts could potentially decide to apportion bigger raises to some employees and smaller raises to others, a change which raised concerns among teachers unions.

“This new version creates greater uncertainty among school employees, and that is the opposite of what we need to keep good teachers working in the classroom,” said Charles Goodmacher of the National Education Association New Mexico.

The Senate Finance Committee struck words in the House-approved budget that would have made funding for the University of New Mexico’s athletic department contingent on the school reinstating sports its regents decided last year to eliminate as part of a belt-tightening move. House lawmakers, including the chairwoman of the House Appropriations and Finance Committee, want the university to bring back the women’s ski team, women’s beach volleyball team, men’s ski team and men’s soccer team. But UNM lobbied heavily against the move.

There are other political signals in the Senate’s version of the budget, too.

The Senate version would provide $200,000 less for the governor’s office than was included in the House budget. Lujan Grisham initially proposed a 38 percent increase, which has now been pared back to about 20 percent.

The budget goes next to a vote on the Senate floor.

The version approved by the House would have left about 22 percent of the general fund in reserves. The Senate Finance Committee’s version would leave reserves around 20 percent, but still far higher than in recent years.

The reserves figure is based on an assumption that the state would spend $195 million to pay off most of a backlog of tax credits owed to the film industry, with that money presumably coming from reserves.