A “perfect storm” is hitting oil and gas prices, impacting New Mexico and its reliance on the volatile industry’s tax money, according to the Senate Finance Committee chair. The collapse in the price of oil comes just weeks after the state Legislature passed a budget and days before the governor makes her final decisions on line-item vetoes and other decisions in the budget. As of now, the governor’s office says the budget will preclude the need for a special session to adjust spending. Oil prices dropped nearly 25 percent on Monday, the worst day since 1991. Senate Finance Committee chairman John Arthur Smith, D-Deming, said it was because of a “perfect storm” with a dispute between Saudi Arabia and Russia leading the Middle Eastern nation to slash prices and announce an increase in production.
The state Senate passed the main budget bill Wednesday by a wide margin after a lengthy debate in which Republicans warned of the dangers of New Mexico’s dependence on oil and gas, while a couple of progressive Democrats argued for spending more. The chamber approved its amended version of House Bill 2 by a vote of 35-7 after a two-hour debate, calling for a $7.6 billion budget for fiscal year 2021 that would represent a 7.6 percent increase over the current year and leave reserves at 25 percent. The House now needs to agree with the Senate’s changes before the General Appropriations Act can move to the governor’s desk. A House vote on the amended bill was expected Wednesday night. NM Political Report update: The House concurred with the Senate changes early Thursday morning and the budget will be sent to Gov. Michelle Lujan Grisham’s desk.
New Mexico legislators are giving a handout to insurance companies, say backers of a bill designed to create a fund for the uninsured.
The bill passed the House floor 41 to 25 earlier this week but failed to make it to the Senate Finance Committee agenda by Wednesday evening. It has to go through that committee before reaching the Senate floor. The legislative session ends at noon on Thursday. Adriann Barboa, spokesperson for a coalition of nonprofits serving the vulnerable called New Mexico Together for Health Care, called HB 278 a “one-time opportunity” for New Mexicans to get nearly everyone in the state insured. The federal government made a change to give a tax rebate to insurance companies this year.
A cut here, a whack there — and a budget takes form. But not without some acrimony. The Senate Finance Committee released considerable changes to the state’s main budget bill Tuesday, trimming the House’s spending plan in high-visibility areas such as roads and teacher pay raises, and scaling down one of Gov. Michelle Lujan Grisham’s most prized pieces of legislation, the Opportunity Scholarship. The committee unanimously approved its amendments to House Bill 2, which calls for a $7.6 billion budget for the 2021 fiscal year, and moves the legislation to the Senate floor. That would represent a 7.6 percent increase over the current year and would target reserves at 25 percent.
Marisol Baird said her young children, 17-month-old Norah and 4-year-old Liam, don’t yet understand the significance of a bill the governor signed into law during a news conference the family attended Tuesday at the state Capitol. “Someday they will see the results pay off,” Baird said of House Bill 83, which establishes an endowment to help fund early childhood programs throughout New Mexico. “And hopefully for their children, it will be even better.” Surrounded by Cabinet secretaries, lawmakers, parents and kids as she put her signature on the new Early Childhood Trust Fund, Gov. Michelle Lujan Grisham said, “This is a victory for families and children.” The fund will kick off with an appropriation of $320 million in fiscal year 2021 and will be sustained in future years by oil and gas-related revenue sources.
On Monday morning, there was a sign on a key Senate panel’s door with underlined writing in all caps. “House Bill 2 will not be heard today,” it read. The General Appropriations Act, also known as the main budget bill for New Mexico state government, had been on the Senate Finance Committee’s agenda for Monday but would now have to continue awaiting action, as it has for nearly since two weeks since the House passed it. “We don’t have the amendments ready,” committee chair Sen. John Arthur Smith told The New Mexican. “It’s not an easy process when you have this many amendments.”
Indeed, the committee does have to sort through some 600 proposed amendments while it also figures out how to cut around $150 million from a House bill Smith says overshoots spending targets.
If you started the clock at midnight Monday and counted down to the end of this year’s legislative session at noon Thursday, you’d come up with 84 hours. That’s how long legislators in the state Senate have to make adjustments to the state budget. “Putting out fires. That’s what it looks like,” said Senate Finance Committee Chairman Sen. John Arthur Smith of what promises to be a frenetic three and a half days. Entering the final moments of the 30-day legislative session, the state budget encompassed in House Bill 2 remains in limbo.
For years, it was one of the most talked-about proposals in the Roundhouse.
There was repeated excitement, momentum, controversy and resistance — all over legislation calling for a constitutional amendment to tap more of the state’s nearly $20 billion Land Grant Permanent Fund to pay for early childhood education. But this year, the atmosphere is more one of muted neglect. That’s likely because there’s a new kid on the block, a proposal to create an early childhood trust fund with other revenue streams. The idea has traveled further in its first year than the land grant proposal ever has — it reached the governor’s desk after being passed by the full Senate on Friday. A big setback for the land grant proposal came on Saturday in the Senate Rules Committee, where most members walked out before the legislation, known this year as House Joint Resolution 1, was heard. Many legislators had been in the room for other matters earlier that morning, yet only four were left when HJR1 was taken up, depriving its supporters of a quorum needed for a vote.
If legislation had taglines, this one’s might be: “How a highly technical bill became the latest partisan punching bag.”
On Friday, the Democrat-controlled House Taxation and Revenue Committee approved House Bill 341, which proposes to transfer money from the state’s enormous Tax Stabilization Reserve fund into its operating reserve if the latter drops to less than 1 percent of total appropriations. The legislation’s proponents say the measure would fix a structural issue created when the rainy-day fund was set up, and would even help the state avoid calling a special session when it’s not necessary. But it became a flashpoint for discord Friday, with Republicans critics contending the bill is a cover for Democrats spending too much during the session. “If we refuse to address the technical problem that has arisen, we’re not doing our job,” House Speaker Brian Egolf said Friday at the committee hearing before voting in favor of the bill. At issue is the balance in the state’s operating reserve, a sort of holding account for the general fund that provides a buffer in case there’s a revenue shortfall.
The New Mexico House of Representatives may have passed the main budget bill, but the spending plan is unlikely to get to the governor’s desk without a slashing. The chairman of the Senate Finance Committee is more than irked at the version of the budget the other chamber sent over. Sen. John Arthur Smith is promising to “get real aggressive” in finding areas to cut and free up needed revenue. “I will admit that I’ve been more annoyed with this budget cycle and what was sent over to us,” said Smith, D-Deming, referring to House Bill 2. “Because of the reserve targets — they knew darn well what they were.”
When the House passed its $7.6 billion budget bill last week, it said the legislation called for stashing away 26 percent in reserves, which would be in line with Gov. Michelle Lujan Grisham’s spending plan at a time when the state is projecting sizable new revenues from oil and gas production.