Gov. Susana Martinez signed three bills Tuesday to balance the state’s budget, taking about $46 million from the reserves of public schools. But she vetoed cuts to an economic development program and various accounts in New Mexico government. The bills could raise $190 million for the state’s general fund, closing a deficit that was projected to total about $80 million. The measures also will replenish government reserves, though not nearly to the extent of plans proposed in early January by legislative staff and the governor’s own administration. The package will leave the state’s cash reserves at 1.8 percent, rather than nearly 3 percent as previously proposed.
Democrats in the state Legislature on Thursday outlined a six-point jobs plan, including a raise in the minimum wage and spending on public works projects, that they said would be their focus for the remaining 50 days of the legislative session. But Democrats were unable to project how many jobs would be created by the plan or provide details on how some parts of the plan would work. Still, they promised to deliver for a state still trying to find its economic footing more than seven years after the end of the Great Recession. “Today, families and young people in our state are confronted with poor prospects for getting a job,” Sen. Clemente Sanchez, D-Grants, said at a news conference on the Senate floor. “Far too many residents are living in real economic distress, and anxious about the future for themselves and their children.
State lawmakers on Wednesday passed the last pieces of a plan to balance New Mexico’s budget for the current fiscal year and rebuild the state’s drained cash reserves, coming to compromises on cuts to education funding and an economic development program. Unclear is whether Republican Gov. Susana Martinez will veto any pieces of the solvency package for fiscal year 2017. She has vowed to protect funding for classroom instruction and the state’s “closing fund” intended to draw prospective investors to the state, but a proposal she preferred would have taken far more money from school districts’ reserve funds than the plan approved by lawmakers. Martinez has three days to act on the bills, and a spokesman said the Governor’s Office will need to closely scrutinize parts of the proposal, echoing the criticisms of House Republicans. “For example, lawmakers chose to protect their personal legislative retirement accounts, while at the same time tried to squeeze money out of other areas of government,” Mike Lonergan said in an email late Wednesday.
While lawmakers say measures to patch an unconstitutional budget hole are the 2017 Legislature’s first priority, disagreements over a solvency package Tuesday kept most of the plan from moving forward to the governor. Four bills together would roll back some capital construction projects, sweep money from cash balances, including dollars earmarked for education reforms and economic development, and tap into reserve funds squirreled away by school districts and charter schools. “No one’s happy about having to cut the public schools in the middle of the year,” said Sen. Mimi Stewart, D-Albuquerque. The exact amount of money that lawmakers scrape together will depend on the final version, but the legislation would beef up state government’s $6 billion general operating fund by adding some $260 million. If signed by Gov. Susana Martinez, as expected, the solvency plan would close a $70 million deficit for the fiscal year that ends June 30.
The state House of Representatives agreed Monday evening to soften the financial blow to New Mexico’s public schools. With little discussion, House members voted to scale back cuts for districts and charter schools from a total of $50 million to about $38 million during the next five months. The cuts would be a big part of balancing the state’s budget. Proposed by Rep. Patty Lundstrom, D-Gallup, the change ensures that each district or charter still has cash reserves of at least 4 percent of its budget. Those beneath 4 percent in reserves would not face cuts.
One week after accusing lawmakers of failing to make tough decisions as New Mexico slid into financial crisis, Republican Gov. Susana Martinez struck a conciliatory tone in her annual State of the State address Tuesday, calling on legislators to work together as the state faces a projected deficit that will top the agenda for the 60-day legislative session ahead. Rattling off issues on which Republican and Democratic lawmakers had reached agreement in the recent past, Martinez urged bipartisan compromise during the session’s opening day. But with the governor also calling on lawmakers to reinstate the death penalty for some crimes and reiterating her opposition to raising taxes, her pleas for cooperation with Democratic majorities in both the state Senate and House of Representatives will be quickly tested. Related: Dem response: ‘The state of our state is unacceptable’
This year’s session may be the last big opportunity for Martinez to advance some of her big-ticket legislative proposals. Only a 30-day session, which are typically dedicated to the budget, will remain before the two-term governor leaves office at the end of 2018.
Stressing priorities and the state’s shaky energy revenue source, Gov. Susana Martinez proposed a budget with a $228 million increase in recurring state spending. That comes out to a 3.7 percent increase over the previous year’s budget. At a press conference in a downtown Albuquerque building that houses the state Corrections Department, Martinez said her proposed budget emphasizes “three things above all others”— education, public safety and jobs. “Keeping New Mexicans safe, reforming and improving public education, and creating jobs by diversifying our economy and helping small businesses grow,” she said. The proposal comes even as legislators warn about the effects of low oil prices that show no sign of increasing.