Inside the ‘boiler room’ of legislative analysts during the session

It was late Tuesday morning, a House committee was set to hear the high-profile “red flag” gun bill in just a couple hours, and a key report — one that was needed for the hearing to begin — wasn’t ready yet. One building over from the Roundhouse, the pressure was on as Cathy Fernandez and her analysts waited for input from a state agency in order to complete the report for Senate Bill 5 and send it over to the House. To make matters even more difficult, it was a snow day and the rest of state government was closed. Now, multiply that experience to the nth degree. That’s about what it’s like to be a Legislative Finance Committee contract analyst tasked with writing the “fiscal impact reports” required for every piece of legislation filed during the session.

Bills to exempt Social Security from tax tabled

The House Taxation and Revenue Committee tabled two bills Friday that proposed to eliminate or reduce the state’s tax on Social Security income. Key legislators had previously voiced support for House Bills 29 and 77, and the majority of public attendees who spoke favored it at Friday’s committee hearing. Yet Democratic and Republican legislators alike said they were worried about altering the tax without having a plan to replace lost revenue. 

“You can’t have it both ways. Somewhere you have to pay the piper,” said Rep. Jim Trujillo, a Santa Fe Democrat and co-chair of the committee. “Let’s find a way to pay for it so we don’t create a hole in the general fund.”

New Mexico House passes $7.6 billion spending plan

The state House approved a $7.6 billion budget bill Wednesday, after Republicans criticized it and proposed an alternate plan during a floor debate. The House passed House Bill 2, the General Appropriations Act of 2020, by a vote of 46-24 along party lines after a three-hour debate. The spending plan represents a 7.5 percent increase from the current fiscal year, boosting spending in areas such as early childhood education. “Given all the important demands and the new demands, we made great progress,” House Speaker Brian Egolf said in an interview after the vote. “I think this is a budget that shows that we take very seriously the commitment to deliver on education, health care and public safety.”

Republicans caution against overspending as reserves hit all-time high

Rarely has the phrase “financially prudent” been so hard to define at the Roundhouse. 

Amid the backdrop of a flush revenue stream and looming legislative races in November, Republicans are hammering away at Democrats and Gov. Michelle Lujan Grisham in the early days of the 2020 session — contending they are overspending in a state inextricably reliant on the unpredictable oil and gas industry. Yet Democrats say their spending plan is fiscally responsible, and key components of their argument are backed by the influential Legislative Finance Committee. 

An estimated 45 percent of general fund revenues are now dependent on oil and gas, and GOP members argue that when that contribution declines, the state will be hard-pressed to find funding for new budget increases in early childhood and higher education the governor has proposed this session. Lujan Grisham is proposing a $7.68 billion budget for fiscal year 2021, including a $74 million increase to the Early Childhood Education and Care Department, $200.3 million more on K-12 education, a 4 percent pay raise for teachers and $35 million for the Opportunity Scholarship program. For Minority Leader Jim Townsend, R-Artesia, Minority Whip Rod Montoya, R-Farmington, and other Republicans in the Legislature, the governor’s proposed 8.5 percent spending increase from last year is “irresponsible.”

“When we say it’s irresponsible, those words are not hyperbole. It is a fact — it’s irresponsible.

Pueblo eyes film production facility to meet what state says is rising demand

Tesuque Pueblo is actively pursuing plans to turn its old Camel Rock Casino into a film production facility after the space was used last year for the movie production of News of the World, starring Tom Hanks. 

The Pueblo of Tesuque Development Corp. is in talks with scouts for film and television companies about using the location for future productions, said Timothy Brown, the entity’s president and CEO. The former casino, located off U.S. 84/285, could be used on a short- or long-term basis or rented to a major production company, he said. 

“We feel it’s a great use of that facility,” Brown said Wednesday. “It’s a great space because of the numerous rooms and the size of the rooms for production facilities, wardrobe, building sets and for storage.” The pueblo’s pivot to film comes as the administration of Gov. Michelle Lujan Grisham says demand for production facilities in the state is on the rise.

Sine die: Legislature adjourns from busy session

The 60-day legislative session ended Saturday with a down-to-the-wire agreement on a sweeping tax bill that will raise rates on e-cigarettes and new vehicles while nearly doubling an income tax credit for some families. The scaled-back version of House Bill 6 approved by the Senate in the last 20 minutes before the final bang of the gavel was a fitting end to a session dominated for better or worse by the state’s financial outlook. Driving the session was a whopping budget surplus and the substantial increases in funding for education that it has financed. An oil boom generated the windfall, but there was fear among several lawmakers about what might befall New Mexico if fickle energy markets take a turn. For Republicans and even some skeptical lawmakers on the other side of the aisle, the tax bill represented a sort of “only in Santa Fe” paradox, with newly elected Gov. Michelle Lujan Grisham looking to raise revenues at the same time that the state had a surplus of $1 billion this year.

House approves sweeping tax reform

The New Mexico House of Representatives approved a sweeping tax-reform bill late Friday night that would generate at least $320 million more each year for the state’s general fund. Republican lawmakers critical of the move called it one of the biggest tax increases in New Mexico history. The bill, approved on a vote of 40-25 after nearly three hours of debate, also would bring in $37 million per year in additional funding for state and local roadways. Not surprisingly, the vote fell mostly along party lines, with two conservative Democrats joining Republicans to oppose the bill — which, some lawmakers said, will financially hurt the average New Mexican. Among other measures, House Bill 6 would implement a tax on all online sales, increase the tax on cigarette sales by 10 cents per cigarette, repeal a state law that allows New Mexicans to deduct half of their capital gains income on their personal income tax forms and increase the motor vehicle excise tax to 4.2 percent from 3 percent.

House Republicans, pushed further into the minority, feel frustration at lack of input

After a midterm election in which Democrats wrested back control of the Governor’s Office and expanded their majority in the state House of Representatives, Kelly Fajardo feels almost invisible at the Roundhouse this year. Fajardo, you see, is a Republican representative in a Democrat-dominated House, where members of the GOP are now outnumbered by the largest margin in two decades. “It just feels like we don’t matter,” said Fajardo, R-Los Lunas. “Our job is to create good policy, and when you’re going, ‘I don’t need you. I don’t need to listen to you,’ that creates a problem,” she said.

Legislative committee recommends $7 billion budget for N.M.

Top lawmakers on Monday rolled out a proposed $7 billion state budget that would include a whopping $600 million for public works projects around New Mexico as the government’s coffers swell with a windfall of revenue from an oil and gas boom. The Legislative Finance Committee’s proposed budget would mark almost an 11 percent increase in spending by the state. That is less than what Gov. Michelle Lujan Grisham has proposed in her own version of the state budget, which would raise spending by about 13 percent. But as lawmakers prepared to convene Tuesday for a 60-day legislative session, leaders indicated they are not far off from an agreement with the new governor when it comes to some spending on the issue that is sure to dominate the agenda: education. Faced not only with a judge’s order to come up with ways of improving education for many of the state’s most vulnerable students but also with a bright financial outlook in the short-term, legislators echoed Lujan Grisham’s own call to greatly increase funding for New Mexico schools.

Legislature sends governor bill imposing tax on nonprofit lab contractor

Gov. Susana Martinez will have to decide whether to sign a bill designed to prevent the state government, as well as local governments in Northern New Mexico, from losing tax revenue if a nonprofit university takes over management of Los Alamos National Laboratory later this year. That possibility is real, as two Texas universities have submitted bids for the contract. “We stand to lose about $30 million in gross receipts revenue to the state should a nonprofit contractor receive the [operations contract] at the national laboratory in Los Alamos,” Rep. Stephanie Garcia Richard, D-Los Alamos, told the House of Representatives late Tuesday night before it voted 48-19 in favor of the measure, Senate Bill 17. Garcia Richard’s number is consistent with a fiscal impact report by the Legislative Finance Committee, which estimates the state’s gross receipts tax losses at $25 million to $30 million if a nonprofit is chosen to run the lab. Both the University of Texas System Board of Regents and Texas A&M submitted formal bids on the lab management contract in December.