A bill that would make it easier for the Legislature to tap into rainy day funds cleared the Senate on Thursday over the objections of Republicans who accused Democrats of being fiscally irresponsible. Senate Bill 135, which passed 24-15 after an hourlong debate, changes transfers between the more restrictive Tax Stabilization Reserve and the less restrictive operating reserve. Under current law, when operating reserves exceed 8 percent of the prior year’s appropriations, the excess is transferred to the Tax Stabilization Reserve, said Sen. Siah Correa Hemphill, D-Silver City, who sponsored the measure. The bill would “keep that provision in place but it provides for the transfer to occur only if the balance of the Tax Stabilization Reserve is less than 20 percent of appropriations,” she said. “When the balance … exceeds 20 percent, no transfer will occur and the funds will stay in the less restrictive operating reserve.”
Correa Hemphill said the existing relationship between the two rainy day funds limits the Legislature’s ability to have the “flexibility” to deal with important needs when they arise.