$7 billion spending bill heads to Senate

Copyright © 2019 Albuquerque Journal

SANTA FE – New Mexico spending would hit an all-time high – with most of the increased spending going toward public school programs and teachers – under a budget plan that passed the House late Thursday.

The $7 billion spending bill, which now goes to the Senate, was approved 46-23, with majority Democrats in favor and all but one Republican in opposition.

During the three-hour debate, House GOP members tried to amend the bill, claiming its proposed spending levels were dangerously high, because the state’s unprecedented revenue growth is due primarily to an oil drilling boom in southeastern New Mexico.

But top Democrats defended the spending plan as fiscally prudent, pointing out that nearly $1.6 billion – or 22 percent of state spending – would be set aside in cash reserves.

They also argued that many state programs were starved of cash during the administration of former Gov. Susana Martinez, a Republican who left office at the end of last year.

“The best thing for economic growth in New Mexico is a functional, adequately funded state government,” said Rep. Antonio “Moe” Maestas, D-Albuquerque.

In all, the budget approved Thursday would ramp up overall state spending by $684 million – or 10.8 percent – over current levels.

The spending infusion would allow for state worker pay raises – including 6 percent hikes for all teachers and school administrators. It would also provide money to add up to 10 additional school days annually, expand prekindergarten programs and direct more money to school districts with high numbers of Native American students and English-language learners.

House Speaker Brian Egolf, D-Santa Fe, said the Democratic-backed spending plan would address many of the concerns raised in a landmark court ruling that New Mexico was failing to meet its constitutional requirement to provide an adequate education to all students.

Although he said full compliance with the court ruling may take several years, he said he felt comfortable the judge would have a favorable view of the state’s efforts at an April court hearing.

“That’s never happened in the history of New Mexico,” he said, referring to a proposed $449 million – or 16 percent – increase in public school spending.

But Republicans argued it would be difficult for the state’s 89 school districts to absorb the spike in funding. They also warned the state could see history repeat itself if oil production levels plummet.

“I want to make sure we’re not putting ourselves in the position in the future where we’re having to cut, take back or raise taxes,” said Rep. Jason Harper, R-Rio Rancho.

He proposed an alternative spending plan that would have featured more modest spending increase – and $200 rebates for all New Mexicans – but was rejected by majority Democrats.

Public schools

Public school programs would get the biggest boost, but the spending plan approved Thursday would also authorize hefty one-time spending.

That includes more than $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.

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

In addition, House Bill 2, the budget plan now heading to the Senate, would bolster recurring state spending in several other areas:

• An additional $45 million – or 4.8 percent increase – for Medicaid. Total state Medicaid spending would rise to $979 million.

• A $45 million increase for the state Corrections Department. The money would be used to hire more corrections officers and pay for transitional living programs for parolees.

• A similar $45 million increase for colleges and universities statewide. That would represent a 5.5 percent bump over current levels. At least some of the money would go toward collegiate sports programs, though the University of New Mexico’s athletics budget would go up only if it brought back four sports that were recently eliminated.

Revenue surge

New Mexico’s recent revenue surge – the state is expected to take in more than $7.4 billion in the coming budget year – has come after several dismal budget years at the Roundhouse.

Just two years ago, lawmakers were forced to cut spending and take money from various state funds in response to a steep revenue downturn.

Although Republicans said the proposed spending growth would be too aggressive, Democrats said they were balancing needed investments with fiscal prudence.

“I think for the next few years we feel very comfortable with these spending levels, and we think they’re necessary,” said Rep. Patricia Lundstrom, D-Gallup, chairwoman of the House Appropriations and Finance Committee. “There’s nothing in this budget that’s fluff.”

Rep. Jane Powdrell-Culbert, R-Corrales, was the lone House Republican to vote in favor of the bill.

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