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House panel OKs 10% bump in state spending

Rep. Patricia Lundstrom, D-Gallup, chairwoman of the House appropriations committee, discusses the Democratic budget proposal with other members of the committee Monday. (Eddie Moore/Albuquerque Journal)

Copyright © 2019 Albuquerque Journal

SANTA FE – Buoyed by an oil drilling boom, New Mexico spending levels would hit an all-time high under a $7 billion budget plan approved Monday by a key House committee.

The spending plan passed the House Appropriations and Finance Committee on a party-line 12-6 vote, with majority Democrats voting in favor and Republicans in opposition.

The budget bill, which will most likely be voted on by the full House later this week, would ramp up overall state spending by $684 million – or 10.8 percent – over current levels, with the state’s public school system receiving most of the increase.

Education spending would rise by $449 million – or 16 percent – over current levels, which would allow for teacher pay raises, expanded prekindergarten programs and more money for school districts with a high number of Native American students and English-language learners.

Rep. Patricia Lundstrom, D-Gallup, the appropriations committee’s chairwoman, said after Monday’s vote that she’s confident the spending infusion would bring the state into compliance with a landmark court ruling that the state is falling short of its constitutional mandate to provide an adequate education to all students.

“They’re going to have to gear up – and that means hiring more teachers and finding more classroom space,” Lundstrom told reporters, referring to school districts statewide.

A state judge has given lawmakers an April deadline to come up with a compliance plan, and some advocates involved in the case have said the current budget plan doesn’t go far enough.

But teachers unions have praised the proposal, especially the proposed 6 percent pay raises for teachers and school administrators.

Charles Goodmacher, the government and media relations director for the National Education Association-New Mexico union, said the pay hikes would “persuade many teachers from leaving the profession and encourage possible new teachers and other school professionals to enter into service in our public schools.”

Meanwhile, Lundstrom said she was disappointed by the GOP opposition to the budget plan, pointing out that the state would set aside nearly $1.6 billion in cash reserves – or more than 22 percent of spending – in case projected revenue levels do not materialize.

But Republicans said that even with the large cash reserves, the budget proposal would increase state spending too quickly and by too much.

“I’m not sure that all that money can be efficiently spent,” said Rep. Paul Bandy, R-Aztec. “I’m afraid of what’s going to happen three or four years down the road.”

Lawmakers from both political parties have expressed caution about the state’s unprecedented revenue growth, which is primarily being driven by taxes and royalties associated with surging oil production levels in southeastern New Mexico.

Currently, about 45 cents out of every state dollar spent is now attributable to the state’s energy industry, according to key lawmakers.

Roads, film credits

While public school programs would get the biggest boost, the spending plan unveiled Monday would also authorize hefty one-time spending.

That includes roughly $300 million for statewide road construction and repairs, $14 million for a state “closing fund” intended to help lure out-of-state companies to New Mexico and $27 million for new school textbooks and other instructional materials.

In addition, the budget plan would allow for $150 million to be spent to pay down a backlog of film tax credits under a high-profile incentive program.

Gov. Michelle Lujan Grisham has previously called for the entire backlog – estimated to be in excess of $300 million – to be paid off.

Lujan Grisham spokesman Tripp Stelnicki said Monday that was still her preference, while adding that the Democratic governor intends to speak with lawmakers in the coming weeks about the issue and other budget details.

“This is a fluid situation, and the governor’s priorities haven’t changed,” Stelnicki said.

Ups and downs

Over the past several years, New Mexico has ridden a budgetary roller coaster.

The state’s current cash-flush situation comes less than two years after lawmakers were forced to cut spending and take money from various state funds in response to a steep revenue downturn.

Given that backdrop, Lujan Grisham has urged lawmakers to provide funding to expand early childhood programs, improve health care access and hire more state workers in hard-to-fill positions, including social workers for child well-being cases.

Some Democratic lawmakers said Monday that the budget proposal would do just that, while still being fiscally responsible.

“I think this provides a balance and invests resources at a very critical time,” said Rep. Nathan Small, D-Las Cruces Democrat.

But Republicans, who said they plan to unveil their own budget plan, said it goes overboard.

They also cited several measures pending at the Roundhouse that would enact new restrictions or requirements on the oil and natural gas industry.

“I don’t know why they would continue to do business in New Mexico if they’re not welcome here,” said Rep. Cathrynn Brown, R-Carlsbad.

If approved by the full House, the budget bill will advance to the Senate.

Both chambers must sign off on the same version of the bill before the 60-day session ends March 16 for it to land on the governor’s desk.

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