February 14, 2022

Key legislative committee endorses revised $8.4 billion spending plan

The Senate Finance Committee put its stamp of approval Sunday on an amended $8.4 billion spending plan for the state of New Mexico that includes additional funding for criminal justice initiatives, road projects and a school of public health.

The overall budget proposal, which the committee advanced to the full Senate in a unanimous vote, increases spending by nearly 14 percent, or roughly $1 billion, over the current fiscal year ending in June.

The proposed level of spending represents an all-time high for the state. 

“Everybody in New Mexico seems to have gotten something,” Sen. George Muñoz, D-Gallup, who chairs the committee, said Saturday after a series of amendments were presented to the committee.

“We put a lot of money in economic development, and it had better be fruitful as we move forward or New Mexico is going to be looking at cuts again,” he said. “We ride the rollercoaster of oil and gas, and as long you want to continue that, we better plan carefully.”

Proposed amendments increase the proposed budget by nearly $142 million in nonrecurring expenses and $11.1 million in ongoing expenses compared with the spending plan approved by the House a week ago. The additions include more money for law enforcement retention and recruitment stipends and other efforts to fight crime in New Mexico.

State police officers would receive raises of almost 16 percent under the proposed budget, which also includes “targeted pay increases for other positions key to addressing and reducing violent crime,” according to the Legislative Finance Committee.

Spending at the Department of Public Safety would increase 11.2 percent and also includes $50 million for recruitment and retention.

“The governor said she wants 1,000 new officers — we don’t see that as [feasible] — but the money is there in case it does happen,” Muñoz said. 

The spending plan leaves about $400 million for tax-related initiatives. Lawmakers are considering a tax package that includes exempting the income tax on Social Security benefits and a quarter-percent reduction in the gross receipts tax.

The revised proposal also includes an additional $27 million for maintenance and repair of roads.

“I think all New Mexicans should be thrilled [a total of] $247 million being put into these crumbling roads all over the state [that] is going to be remarkable,” said Sen. Michael Padilla, D-Albuquerque. “It’s going to help us with economic development, with safety, so I’m really excited about that.”

But Padilla expressed concern and questioned how the state would sustain the increased level of spending over the next three to five years.

“It’s remarkable what we’re doing, but I want to make sure that we don’t have to come back to Mr. and Mrs. New Mexican in three to five years and just cut off our nose and our arm or something,” he said.

Muñoz said sustainability is always a question in New Mexico.

“We do targeted stress tests,” he said, though he noted record revenue projections and the windfall from oil and gas, as well as federal pandemic aid, won’t be around forever.

“Our revenue growth for the next year is showing about a 6 to 7 percent increase,” he said.

General fund reserves would end at an estimated $2.4 billion, or 28.5 percent of recurring appropriations, under the proposed budget.

The spending plan includes $3.8 billion for public schools, a $425 million increase over the current year. It includes funding to increase the starting pay of teachers to $50,000 annually, as well as $10,000 increases in the two other levels of the state’s three-tier licensure system, to $60,000 and $70,000.

“It includes a 7 percent salary increase for all public school personnel, and it also includes a 10 percent average salary increase for all personnel in schools that participate in K-5 Plus or extended learning time programs,” Dawn Iglesias, principal fiscal analyst for the Senate Finance Committee, told lawmakers. “The funding in this bill is sufficient to pay all school employees $15 an hour, and it does target pay for hard-to-staff positions.”