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Glimmer of Light in the Roundhouse

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SANTA FE – Like a prizefighter just off the ropes, recession-battered New Mexico is back on its feet budget-wise as lawmakers head into the annual session that begins Tuesday.

But there’s still enough wobbliness to cause concern.

The short session – 30 days long in even-numbered years – is by law meant to focus on budget and tax matters and whatever else the governor chooses.

This year, it will play out against the backdrop of elections: All 42 Senate seats and all 70 House seats are on the ballot, and lawmakers will go from the Capitol to the campaign trail when the session ends.

That could mean even more politics-as-usual than usual.

After three miserable years of budget-whacking that reduced state spending by about $800 million, there’s a glimmer of light. About $250 million more is expected to be collected in the fiscal year that begins July 1 than was budgeted for the current year.

“Hopefully, tensions won’t be quite as high because the battle over where to cut won’t be there,” said House Republican Whip Donald Bratton of Hobbs.

In budget proposals from both the Democratic-dominated Legislature and Republican Gov. Susana Martinez, much of that “new” money would go to education and to Medicaid, the state-federal program that provides health care for one of four New Mexicans.

But Martinez, while cautioning that the economy is still fragile and the state must carefully watch its spending, also wants to use $55 million for tax breaks for businesses and military veterans.

Gross receipts taxes would be eliminated for about 40,000 small businesses that account for about 1 percent of GRT receipts, under her plan. Tax “pyramiding” – double or triple taxation of goods and services – would be lessened for the construction and manufacturing industries.

Martinez says jobs would be created as a result, and New Mexico would become more competitive.

Also in her package: Tax credits for high-tech, research-and-development firms; tax credits for companies that hire returning veterans; and an exemption from state income tax for 25 percent of veterans’ pensions.

“That’s going to be heavily debated – what is good tax policy and what is not good tax policy,” said Senate Finance Chairman John Arthur Smith, a conservative Democrat from Deming who is influential on budget matters.

Smith doesn’t rule out tax cuts as a possibility, but he questions the wisdom of narrowing the base of the gross receipts tax, a linchpin of New Mexico’s revenue collections.

“We don’t have any margin of error, because oil and gas isn’t going to bail us out,” he said.

There aren’t any tax cuts in the Legislature’s $5.7 billion budget proposal; instead, it shores up programs and services.

It also proposes the first pay increase for state workers in three years: one-half percent.

“We’re trying to send a message … that things are turning around, they’re getting a little bit better,” Smith said.

Martinez objects to spending money on pay raises, saying education reform and job creation – the tax breaks – should be the priorities.

The governor’s “social promotion” ban that failed to clear the Legislature last year – it had strong bipartisan House support but died in the Senate – promises to be hotly contested again this session.

Martinez wants to mandate that third-graders who can’t read proficiently be held back – a requirement she says would mean kids with reading problems would be identified and helped early. Her budget allocates $17 million for related reading programs.

Some Democrats decry it as a “mandatory flunking” measure and along with teachers’ unions are pushing an alternative: remediation programs – run by school districts and involving parents – for students in kindergarten through eighth grade who aren’t proficient in reading and math. But no mandatory retention.

The governor is also reviving another contentious issue: repealing the 2003 law that allows illegal immigrants to get driver’s licenses.

A year ago, the House voted for a Martinez-backed bill that would no longer allow illegal immigrants to be licensed, although foreign nationals here legally could be licensed for their stay.

The Senate countered by approving a substitute that would have allowed the continued licensing of illegal immigrants, but for shorter periods and with stricter residency and identification requirements – including fingerprinting – and penalties.

No bill agreed on by both chambers ever passed, and lawmakers rejected Martinez’s request to take it up again in September during the special session on redistricting.

There will be a range of other items that could come before lawmakers, among them:

•  Authorization for the state and local governments to ban fireworks when fire danger is high.

•  A requirement that parents be notified when minors seek abortions.

•  A revamp of the structure of the scandal-scarred Public Regulation Commission, or the imposition of qualifications to serve on it.

•  A requirement that voters show photo identification at the polls.

•  A constitutional change allowing the governor to remain in charge when she leaves the state, instead of turning over the reins to the lieutenant governor.

•  Albuquerque’s request that the state pitch in $46.5 million to help rebuild the congested interchange of Interstate 25 and Paseo del Norte.

•  Martinez’s suggestion to make it easier for National Guard and Reserve unit members to qualify under law as veterans, making them eligible for state and federal benefits.

— This article appeared on page A1 of the Albuquerque Journal

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