By Daniel J. Chacón, The Santa Fe New Mexican
At the halfway point of the 60-day legislative session, New Mexico’s proposed budget is halfway to the governor’s desk.
The $9.43 billion spending plan, which includes average 5% pay raises for state government employees and leaves room for rebates for taxpayers, is headed to the Senate Finance Committee after passing the House 52-17 Thursday.
Seven Republicans joined all 45 Democrats in the House in voting to advance House Bill 2.
During a three-hour discussion and debate on the spending plan — the highest in state history — Republicans who voted against it raised concerns about the budget’s proposed 12.4% increase in spending, given the state’s financial peaks and valleys.
Minority Leader Ryan Lane of Aztec said what gave him the most “heartburn” was the proposed spending increase comes on the heels of a 14% jump the year before.
“We live in a place that is wholly dependent upon the extractive industries to fund this budget,” he said, referring to oil and gas, which generate about 40% of general fund revenues. “But too often I feel we do what we can to try to, at the same time, make life very difficult on that industry, and I just don’t think that model of relying on oil and gas with one hand and the other hand having a sword towards the same industry is sustainable long term.”
Rep. Jason Harper, R-Rio Rancho, urged more fiscal restraint.
“If we were a little more disciplined during the good times, we wouldn’t have to feel so much pain during the bad times,” he said.
“Just looking back [when] I started here 11 years ago, our budget in 2012 was about $5.5 billion, and now we’re looking at [nearly] $9.5 billion. It’s almost doubled in 11 years,” Harper said. “So I just want to say I’m a little concerned that we’ll be coming back here — maybe not next year, I don’t know when — but the piper will eventually have to be paid.”
The proposed budget makes significant investments across the board, from public education, where spending would increase 8.6%, to Medicaid, where spending would go up by $218 million, or 18%.
“There are urgent needs now, and we simply cannot ignore those urgent needs now,” Rep. Nathan Small, D-Las Cruces and the new chair of the House Appropriations and Finance Committee, said during a budget briefing earlier in the day.
The spending plan leaves general fund reserves at 30%, or just over $2.8 billion.
Asked about the bill Thursday afternoon, Gov. Michelle Lujan Grisham said she applauded the House for getting it passed with a majority vote.
But she signaled it doesn’t have her full support.
While HB 2 spends about the same amount of money as the governor’s budget proposal, there are some significant differences between the two documents. HB 2, for example, would spend less on child care and on the Opportunity Scholarship Fund that helps many New Mexicans pay for college, a signature initiative of the governor’s.
Lujan Grisham praised funding for housing and taxpayer-funded college tuition but said it’s “insufficient.”
“I’m going to keep fighting until I get a budget that comes upstairs that reflects our priorities and the priorities of the state,” she said.
Still, the governor expressed confidence the two branches of government could reach agreement.
“Even if it’s at 1 a.m. at the end of the session,” she said.
“It’s in better shape in terms of executive priorities … than it has been, but it still misses the marks that are critical to us,” the governor added.
The spending plan would transfer $850 million to the Severance Tax Permanent Fund and $100 million to both the Water Trust Fund and a new conservation trust fund as part of a long-term strategy to convert what officials call “now money” into “future money.” In other words, the budget would invest more than $1 billion into funds that would grow and spin off revenues in the future.
“Our budget leverages historic revenues to make responsible investments that reflect our values, help working families across our state today, and plant seeds for generational change,” Rep. Meredith Dixon, an Albuquerque Democrat and vice chair of the House Appropriations committee, said in a statement.
Rep. Andrea Reeb, R-Clovis, a former district attorney who has been tapped to serve as a special prosecutor in the criminal case tied to the 2021 fatal shooting on the set of the movie Rust, recused herself from the vote.
“There’s been concerns about potential conflicts of interest raised and so I felt it best to excuse myself, but I do appreciate all the hard work that everybody worked on the budget,” she said.
The Senate Finance Committee is scheduled to discuss the proposed budget Monday.
Staff writer Robert Nott contributed to this report.
Follow Daniel J. Chacón on Twitter @danieljchacon.