SANTA FE – For the second consecutive year, New Mexico lawmakers have a “good” challenge on their hands – how to divvy up an oil-fueled budgetary windfall that could allow state spending levels to once again hit an all-time high.
So far, Gov. Michelle Lujan Grisham and leading lawmakers are expecting to find plenty of common ground as they work to craft a new state budget – the priority in this year’s 30-day session.
The governor and Legislative Finance Committee each released spending plans this month that call for establishing a new early childhood trust fund, raising teacher pay and boosting state funding for school districts that serve a disproportionate share of low-income students and English language learners.
Both proposals also call for maintaining state reserves equal to about 25% of state spending.
But the executive and legislative branches are starting with much different approaches on college scholarships and some early childhood programs.
Lujan Grisham has proposed $35 million for a new scholarship program aimed at providing tuition-free college to state residents. The initial legislative proposal doesn’t provide funding for that program but instead proposes $35 million to bolster traditional financial aid, including for low-income students.
The governor is also seeking an extra $26 million to expand eligibility for a child care assistance program that helps parents who work or attend school. Legislators have proposed just $1 million in new state funding for child care subsidies.
Nonetheless, Lujan Grisham and legislators say they are starting with plenty of agreement.
Altogether, the governor is proposing abut $7.7 billion in sustained spending, an 8.4% increase over this year. The Legislative Finance Committee has proposed $7.5 billion, a 6.5% increase.
“Our difference with the executive is not that far apart,” said Rep. Patricia Lundstrom, a Gallup Democrat and vice chairwoman of the Legislative Finance Committee. “I feel like this is a very responsible budget.”
Finance and Administration Secretary Olivia Padilla-Jackson, the governor’s top budget official, said New Mexico is harnessing its revenue boom responsibly, striking a balance between addressing critical current needs and making investments for future years.
“This is probably the largest investment in education as a whole that we’ve made in the state,” Padilla-Jackson told reporters.
Neither budget proposal calls for spending all of the new revenue expected to be available.
Overall, New Mexico’s recent spending growth comes after several cash-lean years and is being driven by the record-breaking oil production in the state’s southeastern corner. The oil boom has helped to generate an estimated $797 million in “new” money for the coming budget year.
While some lawmakers have urged spending restraint, there’s also expected to be ample pressure to increase spending with the state’s coffers bulging.
That’s likely to be the case in education, as some advocates have argued the state has not gone far enough to address a landmark July 2018 ruling that New Mexico was not meeting its constitutional requirement to provide an adequate education to all students.
Some of the increased education spending is likely to go to teacher raises.
The governor has proposed 4% teacher raises, and the LFC has suggested 3%, with some targeted hikes on top of that for bilingual and special education teachers.
Teachers received 6% raises this year, in addition to an increased pay scale for beginning teachers.