New Mexico’s environmental and oil and gas regulators are facing budget cuts for the next fiscal year, as nine months of the COVID-19 pandemic and a significant downturn in the oil market has depleted the state’s budget.
The budget reductions come after years of attrition in regulatory budgets under the Susana Martinez administration. The New Mexico Environment Department’s budget was cut by 32 percent between fiscal years (FY) 2012 and 2019, which was the last fiscal year budget passed by the legislature in 2018 before Martinez left office, according to a report released by the New Mexico Wilderness Alliance. The Energy, Minerals and Natural Resources Department (EMNRD) saw its budget drop roughly 24 percent under the Martinez administration between fiscal years 2012 and 2019.
In Gov. Michelle Lujan Grisham’s first budget proposal for FY2020, NMED’s general fund increased 6 percent compared to FY2019, while EMNRD saw a 9 percent increase in fiscal year 2020 over 2019. The departments saw similar increases in the FY2021 budget. But some of that progress will be reversed as the state grapples with the fiscal ramifications of a nearly year-long public health emergency and an oil boom bust.
NMED to cut back on some services
NMED submitted a $89.2 million budget request for fiscal year 2022.
Earlier today, we reported about New Mexico’s dipping reserves. In Fiscal Year 2016, the reserve fund was at $146 million, and in Fiscal Year 2017, New Mexico was $67 million in the red. Now, the Legislative Finance Committee has released its revenue forecast for the state. Among the report’s highlights:
Preliminary FY 2017 ending reserve balances are $329 million. Projected FY 2018 ending reserve balances are $206 million.
The House of Representatives passed three pieces of budget legislation Wednesday afternoon and evening with little debate. The first restored funding to higher education and the state Legislature. Earlier this year, Gov. Susana Martinez vetoed the entire budgets for both during the regular session, citing her opposition to tax increases. Two Republicans—state Reps. Jason Harper of Rio Rancho and Rod Montoya of Farmington—voiced concerns for the spending bill.
Albuquerque Mayor Richard Berry’s administration is voicing confidence that $50 million in federal funding will come their way to help finance the Albuquerque Rapid Transit (ART) project. That’s at least what the city’s Chief Operations Officer Michael Riordan said Monday evening at a city council meeting. He mentioned that former President Obama’s fiscal year 2017 budget recommendations include “a $50 million earmark” for the bus rapid transit project and that even though Congress hasn’t approved a budget, the money is still “currently on the legislative docket to be passed.”
ART, now well into construction with torn roads and narrow lanes that hold back traffic in the heart of Central Avenue, is projected to be 10 miles of dedicated lanes in the street for a rapid bus system with 20 stations. The project is slated to be up and running this fall, but it’s drawn controversy among some residents and business owners along the route, who have blamed slow sales on the project’s construction. More controversy came last week when President Donald Trump released his budget recommendations for fiscal year 2018, which freezes all funding for a Federal Transit Administration grant program for local public transportation projects—including ART.
The state Senate’s leading budget hawk challenged Gov. Susana Martinez on Thursday to reverse course and support proposals for raising taxes and fees or watch essential services get slashed even more. Sen. John Arthur Smith said any vetoes Martinez makes at this stage will force legislators to cut the budgets of public schools and health care as they follow the law to pass a balanced budget. “We’re out of places to find additional dollars,” Smith, D-Deming, said during a brief speech on the floor of the Senate. He spoke hours after the House of Representatives approved a $6.08 billion budget and then moved it to the Senate for consideration. The budget crafted by the Democrat-controlled House would increase state revenue by some $250 million with tax and fee increases.
Gov. Susana Martinez announced Tuesday her proposal to balance the state budget, which involves moving $268.5 million from various state agencies. “This is a responsible budget that reduces the size of government while at the same time protects the progress we’ve made in diversifying our economy, reforming our education system, and keeps our communities safe,” Martinez said in a press release. The proposal includes taking $120 million from public education in funds that Martinez’s press release referred to as “slush funds.”
Sen. John Arthur Smith, D-Deming, told NM Political Report that the proposal is a “starting point for negotiation purposes,” but that real discussions will happen in committee meetings once the legislative session begins next week. Smith, a fiscal conservative, also criticized Martinez’s proposed sweep from public schools. “I’m not as harsh on education as she is,” Smith said.
The New Mexico Legislature will convene for a special session this Friday according to multiple reports. It’s still unclear how long lawmakers will meet. A special session is necessary to deal with a nearly $600 million budget deficit from this year and a recently-completed budget year. The state is required to balance its budget each year. Martinez will also add some high profile bills on crime to the call, according to multiple media reports.
RED RIVER — The state is facing a big hole when it comes to the state budget, lawmakers were told at the latest meeting of the interim Legislative Finance Committee. The projected $325 million deficit for the current year’s budget comes in part because state revenue projections from January were off by more than half a billion dollars. A larger-than-expected downturn in the oil and gas industry made a big part of the decline. This year, the state House of Representatives passed a budget based on the January projections, but the state Senate drastically slashed that budget before sending it back to the House. But even the big cuts in the final budget for this year leave a lot to be done.
Just a few things that we noticed at the session that didn’t quite make it into a full story. —At the end of the Senate floor session on, Sen. Gerald Ortiz y Pino, D-Albuquerque, spoke about priorities for this year’s legislative session. He says that if they did all of them “there would be no new money available for anything else” for several years if they were all passed. “I know that tapping the permanent fund in some way lessens the amount available in the future,” he says. He says Richardson cut the income tax “drastically” “and lost hundreds of millions of dollars of revenue” and that they cut corporate taxes under Martinez.
Gov. Susana Martinez’s regular list of legislative priorities was joined by a number of public safety initiatives that confirmed that this year would be a session with a lot of tough on crime rhetoric. Martinez, a former prosecutor, spoke about the need to curb crime and spoke about how increased sentencing is the way to do that. She laid out this and two other issues—education and jobs—as priorities at the top of her speech, which she read off Teleprompters on Tuesday afternoon. She spoke passionately about the deaths of two police officers while in the line of duty, officers Nigel Benner of Rio Rancho and Dan Webster of Albuquerque. She said “they were heroes to strangers.”
Their widows were in attendance, guests of Martinez.