The Senate Finance Committee endorsed a revised $9.57 billion spending plan Saturday that would increase the state’s spending in the upcoming fiscal year by nearly 14%. The full Senate is expected to consider the proposed budget on the floor Sunday afternoon. Tax rebates for New Mexicans are still on the table but what the final figure will be is still up in the air amid ongoing discussions at the Roundhouse on an omnibus tax policy bill. Charles Sallee, deputy director for budget for the Legislative Finance Committee, said the Senate’s proposed budget assumes rebates of $500 for single filers and $1,000 for joint filers — less than proposed by Gov. Michelle Lujan Grisham. Regardless of what the amount turns out to be, Sen. George Muñoz, a Gallup Democrat who chairs the Senate Finance Committee, said the spending plan includes something for everybody.
A showdown is brewing between the executive and legislative branches of government over two of Gov. Michelle Lujan Grisham’s legislative priorities: free meals for students and paying for teachers’ health insurance premiums.
While the governor’s executive budget recommendation includes funding for both initiatives, the spending plan put forth by the Legislative Finance Committee doesn’t have funding for either. The chairman of the powerful Senate Finance Committee called the $100 million proposal to cover the cost of health insurance premiums for all school personnel unsustainable. “It’s not well vetted,” Sen. George Muñoz, D-Gallup, said after the committee examined the differences between the two spending plans. “The governor is going to have to convince us that it’s sustainable and won’t create inequities within agencies that don’t get their health care paid for,” he said. A spokeswoman for the governor did not return a message seeking comment late Monday.
A boom in the oil and gas industry helped deliver a record-breaking $8.5 billion budget to New Mexico this year. Despite the windfall, lawmakers declined to give needed funds to the agencies responsible for regulating the increased pollution that such booms create. The state’s two primary environmental agencies, the New Mexico Environment Department and the Energy, Minerals and Natural Resources Department, will both receive modest bumps to their budgets from the state’s general fund, but these will still fall about $9 million short of the amounts the agencies and the governor requested in the Executive Budget Recommendation. Both environment agencies are responsible for a growing amount of oversight, from enforcing pollution restrictions and food safety to mitigating wildfires and curbing impacts from climate change. Despite the increasing duties, the proposed spending plan for fiscal year 2023 calls for NMED’s budget to be nearly 5 percent lower when adjusted for inflation than it was in 2008; EMNRD’s budget is almost 13 percent lower.
As the clock on the legislative session continued winding down to the noon Thursday deadline, a battle over New Mexico’s proposed $8.48 billion budget blew up. The House of Representatives on Tuesday voted against a motion to concur with amendments adopted by the Senate. “I urge the body to vote no” on concurrence, said Rep. Patty Lundstrom, chairwoman of the House Appropriations and Finance Committee, before the House voted overwhelmingly against the Senate’s changes to House Bill 2. The spending plan, the highest on record, is poised to go to a conference committee made up of three members from each chamber with a goal of working out differences before the end of the session. It was unclear late Tuesday when the committee would meet.
The Senate Finance Committee put its stamp of approval Sunday on an amended $8.4 billion spending plan for the state of New Mexico that includes additional funding for criminal justice initiatives, road projects and a school of public health. The overall budget proposal, which the committee advanced to the full Senate in a unanimous vote, increases spending by nearly 14 percent, or roughly $1 billion, over the current fiscal year ending in June. The proposed level of spending represents an all-time high for the state.
“Everybody in New Mexico seems to have gotten something,” Sen. George Muñoz, D-Gallup, who chairs the committee, said Saturday after a series of amendments were presented to the committee. “We put a lot of money in economic development, and it had better be fruitful as we move forward or New Mexico is going to be looking at cuts again,” he said. “We ride the rollercoaster of oil and gas, and as long you want to continue that, we better plan carefully.”
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.
A record-high $8.47 billion budget that would boost state government spending in New Mexico by nearly 14 percent in the upcoming fiscal year passed the House on a 56-13 vote Thursday after a three-hour debate that largely focused on whether the unprecedented level of spending is sustainable. The proposed budget, which includes funding to give teachers, judges and other state workers raises, as well as what one lawmaker called “transformative investments” statewide, now heads to the Senate for consideration. Though the spending plan received bipartisan support, the 13 lawmakers who voted against the budget bill are all Republicans. Members of the GOP raised concerns about the spending increase of about $1 billion and introduced a substitute proposal that would have increased spending by about half of what’s proposed in the budget bill, or 7 percent. The Democrat-controlled chamber rejected the substitute.
Lawmakers have described the budget-making process in state government as a nightmare when times are lean. But with projections of record revenues, due in part to expected growth in taxes, rebounding oil and gas markets and federal pandemic relief, one legislator likened New Mexico’s proposed spending plan for fiscal year 2023 as a dream come true. On Tuesday, a key legislative panel put its stamp of approval on that plan — a record high $8.47 billion budget that would increase state spending by 13.8 percent, or roughly $1 billion, over the current fiscal year.
The House Appropriations and Finance Committee voted 15-3 to advance a substitute of House Bill 2, which includes average 7 percent salary increases for teachers and state employees and $25 million for evidence-based criminal justice reform initiatives, including stipends to hire new police officers. The proposal also leaves about $400 million for tax-related initiatives. “For the 10 years that I’ve been on this committee, my level of frustration goes up and down based on the amount of revenue … we have to distribute,” said Rep. Christine Trujillo, D-Albuquerque.
As New Mexico looks at an inevitable end to oil and gas extraction, some environmental advocates say no new leases should be issued and the United States should work to phase out fossil fuels. This would not have a huge immediate impact on the state, but could result in less revenue and fewer jobs in the future, experts say. President Joe Biden and Secretary of the Interior Deb Haaland, a former congresswoman from New Mexico, issued orders in January pausing both leasing and permitting to enable a robust review of the federal processes. The pause in permitting ended after 60 days, but the leasing pause continued until a federal judge issued a temporary injunction earlier this month. The vast majority of federal land available for leasing in New Mexico is already leased for oil and gas production, which limited the impact that the leasing moratorium had on the state.
“It’s not as if the bottom is going to fall out because of the moratorium,” Kayley Shoup of Citizens Caring for the Future said in a Zoom call hosted by the Sierra Club’s Rio Grande Chapter this week.
A $7.4 billion budget that would increase state government spending by 4.8 percent in the upcoming fiscal year cleared the New Mexico Senate along a mostly party-line vote Wednesday after an hourslong debate riddled with political potshots and last-minute amendments. “Not everybody’s going to like what’s in the budget,” said Sen. George Muñoz, a Gallup Democrat who is the Senate Finance Committee chairman. “Not everybody can get everything they want, but we can try.” The proposed budget calls for $3.35 billion in public education spending, a 5.8 percent increase; $300 million for road projects around the state; $200 million in pandemic recovery grants for businesses; and $34 million to help shore up the pension fund for the state’s educators. The proposal also includes about $64 million for a 1.5 percent cost-of-living adjustment for all state government, public school and higher education employees.