The state House of Representatives voted Wednesday to send a $9.57 billion budget bill to the governor for her approval. On a voice vote, the chamber concurred with the Senate’s amendments to House Bill 2, the last procedural step to send the bill to Gov. Michelle Lujan Grisham’s desk. The Senate amendments include, among other changes, an additional $130 million in recurring spending for initiatives to address hunger and new investments in the New Mexico Opportunity Scholarship college tuition fund. But concerns were raised on the House floor about the way the Senate Finance Committee made some extra budget adjustments just a day after the committee had already approved the bill. That action, which took place Sunday morning, annoyed Republican senators on the committee and raised questions about behind-the-scenes deals and political pressure for changes that may have come from the Governor’s Office.
The Senate Finance Committee endorsed a revised $9.57 billion spending plan Saturday that would increase the state’s spending in the upcoming fiscal year by nearly 14%. The full Senate is expected to consider the proposed budget on the floor Sunday afternoon. Tax rebates for New Mexicans are still on the table but what the final figure will be is still up in the air amid ongoing discussions at the Roundhouse on an omnibus tax policy bill. Charles Sallee, deputy director for budget for the Legislative Finance Committee, said the Senate’s proposed budget assumes rebates of $500 for single filers and $1,000 for joint filers — less than proposed by Gov. Michelle Lujan Grisham. Regardless of what the amount turns out to be, Sen. George Muñoz, a Gallup Democrat who chairs the Senate Finance Committee, said the spending plan includes something for everybody.
Sen. Martin Heinrich announced Thursday plans to introduce legislation that would help areas that depend on revenue from fossil fuels maintain balanced government and education budgets as the country moves toward a clean energy economy. Known as the Schools and State Budgets Certainty Act, the bill would provide funding to offset the loss of revenue if money from fossil fuel extraction drops. The bill would create a baseline minimal revenue for governments based on the historical average revenue the governments received from federal minerals. If the revenue drops below the baseline, the governments would receive an energy transition payment to offset that loss. These payments will be made to eligible states, counties and tribes and would provide some budget certainty during the transition away from fossil fuels.
Analysts told lawmakers projections show New Mexico will have $1.1 billion in “new money” to spend compared to last year. But they also urged caution on how to spend that money, given the state’s reliance on volatile oil and gas revenues and the need to replace the money legislators used money from various state programs in recent years. Members of the Legislative Finance Committee, which hears regular budget updates throughout the year, were briefed on the numbers from their chief economist and members of outgoing Gov. Susana Martinez’s cabinet. The sky-high budget numbers were slightly lower than the August forecast, but still much higher than the state has seen since 2005, before the Great Recession of the late 2000s. The budget boom doesn’t necessarily mean that legislators will fund new recurring programs.
Committee chairwoman, and House Appropriations and Finance Committee chairwoman, Patty Lundstrom, outlined in the most-recent LFC newsletter where the money would likely go.
An oil and gas bonanza in Southwestern states may be helping to drive the continuing national economic boom. The nation’s 4.2 percent growth in GDP, estimated last month by the Bureau of Economic Analysis, is the highest quarterly growth since 2014. State estimates aren’t due until mid-November, but many experts see oil and natural gas drilling, driven by higher prices, as a leading reason. “The states that contribute most might be the ones with strong increases in energy production,” including Texas, New Mexico and Colorado, said Mark Perry, an economist at the University of Michigan and an economic analyst for the conservative-leaning American Enterprise Institute. GDP measures gross domestic product, or the value of all goods and services produced in a given period of time.
TAOS — The interim Legislative Finance Committee heard the latest rosy budget projections, which show revenues from booming oil and gas activity leading to $1.17 billion in new money for the next fiscal year, bringing total revenue to $7.3 billion. But analysts cautioned the surplus is the result of increasing reliance on oil and gas revenues—which are notably volatile. Because of this, they recommended setting aside at least 20 percent of the revenue in reserves in case of another crash in the oil and gas market or a recession. Legislators will decide during next year’s legislative session what to do with the revenues. In the past, when oil and gas prices fell, previous reserves weren’t enough to make up for the losses and legislators had to cut the state budget.
It took moving a few million dollars here and putting a few million dollars there, but New Mexico had a budget by the end of Wednesday. A $6.3 billion spending plan is on its way to Gov. Susana Martinez after the Senate and House of Representatives brokered a compromise on slightly different budgets approved by both chambers. The compromise won bipartisan support in the House and Senate, a marked departure from recent years when financial shortfalls led to spending cuts and intensely political clashes over state spending. Meanwhile, a spokeswoman for Gov. Susana Martinez signaled that she would be receptive to the budget. That is different from last year, when she vetoed much of the annual spending plan, at one point threatened a government shutdown and ultimately forced a special session.
A Senate committee bent Saturday to calls by Gov. Susana Martinez for more funding for state police pay and the District Attorney’s Office in Albuquerque, as well as calls from some fellow lawmakers to restore at least some of the funding cut from school districts last year. In announcing its version of the budget passed by the state House of Representatives late last month, the Senate Finance Committee seemed intent on maintaining the tenuous peace that has set in at the Roundhouse in the wake of the partisan clashes of the last few years. The budget would amount to about $6.3 billion and, according to the Senate Finance Committee, leave reserves around 10 percent. It would amount to about a 4 percent increase in spending over the current fiscal year. The House passed its version of the spending plan by a vote of 65-3 on Jan.
Gov. Susana Martinez signaled Tuesday she is not going quietly into her last year in office, opening a 30-day session of the Legislature with a State of the State address that touted issues she has pushed throughout her administration and steeling herself for one last showdown with Democratic lawmakers. The two-term Republican governor called for comprehensive tax reform but did not offer any specifics on what that might involve, urged tougher criminal sentences and raised many of the same education and economic policies she has regularly mentioned in her annual address. With the state’s finances improving, offering a reprieve from another round of budget cuts, many Democrats and Republicans alike had come to expect this monthlong session would not be marked by any particularly ambitious initiatives or changes in policy as Martinez prepares to leave office. Instead, many seemed ready to approve a balanced budget and take steps to try to stem the state’s rising crime rates. Indeed, the governor did not offer any big new ideas.
If state Sen. Bill Soules had his way, New Mexico would invest an extra $375 million in public schools right now. Where the cash-strapped state would find that money is another matter altogether. Soules, a Las Cruces Democrat, has once again introduced legislation calling for the state to follow the recommendation of a decadeold study and funnel hundreds of millions of dollars more into its public education system — one that generally ranks at or near the bottom in most national reports. But Soules’ bill doesn’t have a chance in the upcoming legislative session. And he knows it.
Gov. Susana Martinez joined 20 Republican governors in support of federal tax cuts. The letter to Senate Majority Leader Mitch McConnell, R-Kentucky, and Speaker of the House Paul Ryan, R-Wisconsin, didn’t advocate for either plan passed by the House or Senate, but instead called for general principles in a tax overhaul. The House and Senate each passed different plans, necessitating a conference committee for the two to reconcile language. The narrow Republican majority complicates the measure, as does the House Freedom Caucus, a bloc of hardline conservative Republicans in the House, including New Mexico’s Rep. Steve Pearce. They touted tax cuts made since 2011, and the economic growth they say the cuts caused.