February 17, 2020

Budget push comes down to the final hours

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If you started the clock at midnight Monday and counted down to the end of this year’s legislative session at noon Thursday, you’d come up with 84 hours.

That’s how long legislators in the state Senate have to make adjustments to the state budget.

“Putting out fires. That’s what it looks like,” said Senate Finance Committee Chairman Sen. John Arthur Smith of what promises to be a frenetic three and a half days.

Entering the final moments of the 30-day legislative session, the state budget encompassed in House Bill 2 remains in limbo. And as the proceedings droned on Sunday afternoon, Smith, a noted budget hawk, likened the House version to a horse that’s been released from a corral. He has said about $150 million needs to go from the budget bill the House sent to the Senate.

The House passed a $7.6 billion budget for the 2021 fiscal year, a 7.5 percent increase over this year’s budget. That figure came within reach of Gov. Michelle Lujan Grisham’s proposed $7.68 billion, an 8.4 percent increase that included a 25 percent reserve fund. 

But Smith said he expects the Senate Finance Committee to propose amendments to House Bill 2 during a critical Monday afternoon committee hearing, with hopes the final budget will make its way to Lujan Grisham’s desk sometime Wednesday.

“Or Thursday morning,” Smith said with a smile.

Legislators filed more than 900 bills in this year’s session. Many were never heard. Some have quietly died behind the scenes. A few have been approved by both the House of Representatives and the Senate, and a few more are within easy reach of doing the same.

Others are still holding on to some hope of making it to the finish line. 

In the meantime, the focus will almost certainly return to the budget — and still unanswered questions. 

Will teachers receive a 5 percent pay raise as some hoped? Smith and Sen. George Muñoz, D-Gallup and a member of the Senate Finance Committee, said it’s more likely all state employees will get an across-the-board pay raise, and it likely won’t be as high as 5 percent.

What about Lujan Grisham’s Opportunity Scholarship program, which would, in tandem with other state financial-aid packages, cover the cost of tuition for New Mexico college students?

The Governor’s Office says it will cost about $45 million a year based on Higher Education Department analysis. A Legislative Finance Committee fiscal impact report said that figure could jump up to more than $60 million.

Since House legislators did not set aside an appropriation for the program in House Bill 2, Smith said Sunday the committee will have to find a way “to resurrect it” so it doesn’t die. 

Other issues at play include channeling money into the state’s Public Employees Retirement Association to keep it solvent, shoring up other retirement plans and ensuring the state meets its obligation to provide enough resources for at-risk students as part of a District Court mandate. 

Both Smith and Muñoz said it’s too late in the session to engage in any horse trading.

“There’s no horses to trade,” Muñoz said.

Smith said the committee’s main focus is to ensure the state maintains a cash reserve of at least 25 percent.

In a step toward doing that, late last week the Democrat-controlled House Taxation and Revenue Committee approved House Bill 341, which would transfer money from the state’s huge Tax Stabilization Reserve fund into its operating reserve if the latter drops to less than 1 percent of total appropriations.

Smith said he “hates that we went that way” with the bill, but said it could help legislators avoid a special session. 

Last week Lujan Grisham said during a news conference that she did not intend to call a special session unless “something dramatic” comes up. 

In the meantime, Smith said his toughest job at this point is to stop any additional bills seeking funding from coming to his committee. On Sunday, Senate Finance approved a few bills — including one offering an income tax credit for electric car owners – in a rapid manner over the course of one hour. 

As other committee hearings thin out over the next few says, Smith said the committee will meet again Monday and Tuesday to shape the budget. 

Senate Majority Leader Peter Wirth, D-Santa Fe, said that’s how it should be in the session’s final days.

“It’s the home stretch in a budget session,” Wirth said. “We have to focus on what we are here to do — the budget.”

Sen. Gay Kernan, R-Hobbs and a member of the finance committee, said while she could not predict what will happen in the next few days, lawmakers can’t get the job done “without doing some cutting.”