Copyright © 2020 Albuquerque Journal
SANTA FE – With New Mexico’s budgetary bonanza showing some signs of slowing, state lawmakers will return to the Roundhouse this week for a 30-day session that will be equal parts troubleshooting and trailblazing – topped by a hefty dash of political intrigue.
Pension changes, marijuana legalization, college scholarships, gun-related legislation and expanded early childhood programs will all be in the legislative session mix, after being added to the agenda by Gov. Michelle Lujan Grisham.
“If we’re risk averse, that means we’re taking away from New Mexico’s potential and we have to stop doing that,” the first-term Democratic governor said during a speech to Albuquerque business leaders last week.
There’s also the annual mandate to pass a new state budget for the fiscal year that starts in July, a task that two legislative committees got a jump-start on last week.
Skyrocketing oil production levels in southeast New Mexico have pushed state revenue collections to an all-time high in recent years, but lawmakers will have to decide how much of that money to spend on roads, public schools and health care programs – and how much to set aside for future years.
Senate Majority Leader Peter Wirth, D-Santa Fe, said he’s encouraged that Lujan Grisham is limiting the session agenda to a relatively small number of high-profile initiatives that have already been publicly announced.
“It means we really can focus on those, think them through and get them right if we’re going to do them,” Wirth said in a recent interview.
However, winning approval of proposals like a red-flag gun law and an expanded college scholarship program during a 30-day session – New Mexico holds longer, 60-day sessions in odd-numbered years – could test lawmakers’ appetite and the Governor’s Office’s negotiating skills.
“There are some big lifts,” Wirth said.
And the governor’s agenda is not being embraced by all lawmakers.
House Republicans, in particular, have criticized Lujan Grisham’s proposed $7.7 billion budget proposal for the coming fiscal year – it would be an 8.4% increase over current spending levels – as irresponsible and not sustainable.
“It really is a California agenda,” House Minority Whip Rod Montoya, R-Farmington, said during a recent discussion with Journal editors and reporters.
“It would be a lot easier to compromise with Santa Fe if those in leadership positions were listening to those who don’t live in Santa Fe,” he added.
However, with Democrats holding comfortable majorities in both the House and Senate, Republicans will likely be playing defense for much of this year’s session.
The Senate, in particular, is expected to be a key battleground for some high-profile bills, as business-friendly Senate Democrats have in recent years occasionally joined with Republicans to stymie or scale back legislation dealing with taxation and wages.
But Lujan Grisham has signalled support for some GOP-backed measures, such as a proposal by Rep. William “Bill” Rehm, R-Albuquerque, to increase the criminal sentences of those convicted of using a gun while committing a violent crime.
“We’re certainly not operating as a monolith or freezing out Republicans who want to help on the governor’s priorities,” Lujan Grisham spokesman Tripp Stelnicki said.
Fears of a spending spree
As usual in New Mexico legislative sessions, money will dominate Roundhouse debates.
After several cash-lean years, the state’s recent revenue growth has already allowed for spending increases on public schools, film incentives and highway construction. It’s also been used to restore New Mexico’s all-but-depleted cash reserves.
But New Mexico’s reliance on the historically volatile oil industry to pay for state government programs – about 40% of direct state revenue now comes from taxes and royalties associated with oil and natural gas – has prompted lawmakers and state budget officials alike to call for a prudent spending approach.
For that reason, Sen. Gay Kernan, R-Hobbs, said much of the state’s budgetary windfall should be spent on one-time expenses – including road repairs in southeast New Mexico and the creation of a new early childhood endowment fund.
While Kernan said she supports additional pay raises for New Mexico teachers after they got a 6% pay hike last year, she also said lawmakers will have to be prudent when it comes to public school spending.
“We have to make sure we don’t overspend the recurring money, and I think the quickest way we could (overspend) is on education,” Kernan said.
In an attempt to capitalize on the state’s current budget surplus, the Lujan Grisham administration is proposing to put roughly $320 million into a new early childhood endowment fund that would be used to expand pre-Kindergarten and other programs across New Mexico.
That plan has drawn support from some top-ranking lawmakers, including Senate Finance Committee Chairman John Arthur Smith, D-Deming.
But backers of a separate plan to earmark more money from the state’s $19 billion Land Grant Permanent Fund for early childhood programs are not giving up, even though that proposal has repeatedly stalled in the Senate.
Rep. Antonio “Moe” Maestas, D-Albuquerque, said supporters will continue pushing for the proposed constitutional amendment, which would generate an estimated $150 million annually if approved by statewide voters.
“The only thing standing in our way is those members with tremendous power who are simply reactionary when it comes to this policy,” Maestas told the Journal.
Meanwhile, even with the recent oil boom, the state’s inflation-adjusted revenue growth since a 2008 recession still lags behind the national average, according to a recent report by Pew Charitable Trusts.
Seats at stake
This year is also an election year in which all 112 legislative seats will be on the ballot, a dynamic that legislative leaders acknowledge could play a role in the session.
“There’s no question that people are thinking about that when they’re figuring out how to vote on these issues,” Wirth said.
Specifically, several moderate Senate Democrats – including Senate President Pro Tem Mary Kay Papen of Las Cruces and Senate Corporations and Industry Committee Chairman Clemente Sanchez of Grants – are facing primary election challenges from more progressive opponents.
Republicans could also face election-year pressures, as they try to make a case for policies backed by President Donald Trump, who is hoping to win New Mexico this year after being defeated here in 2016.
House Minority Leader James Townsend, R-Artesia, said his caucus will be willing to seek compromise on certain issues, but only to a point.
“I’m not going to cross the (party) line to the detriment of my constituents,” he said.
One proposal that could face political headwinds is a plan to overhaul New Mexico’s chronically underfunded pension system for public employees, the Public Employees Retirement Association.
Lujan Grisham established a task force last year that ultimately endorsed legislation that would increase taxpayer-funded contributions, while also making changes to the annual inflation-related benefit adjustments that retirees get.
But passing the bill during this year’s session could prove tricky, even though pension liabilities played a big role in the state’s bond rating being downgraded in 2018, the group that represents retired public workers has vocally opposed the proposal.
“Clearly our pension system needs proactive action so we don’t end up in a crisis,” Wirth said. “It’s kind of a scary bill heading into an election season, but it’s so important that we get this right so we don’t have a catastrophe if the market crashes again.”
This year’s session will officially begin at noon on Tuesday, and Lujan Grisham will deliver her State of the State Address shortly thereafter.
After winning approval of several high-profile measures last year, including a statewide minimum wage hike and a landmark renewable energy law, the governor has sounded an upbeat tone in the run-up to her second legislative session.
She said last week she’s willing to work with lawmakers to find common ground and said she expects the Legislature to be skeptical of her proposals.
“I don’t get intimidated by that,” Lujan Grisham said during her speech at a luncheon hosted by the Greater Albuquerque Chamber of Commerce. “We want folks to test these ideas and proposals.”
But unlike last year, when legislative leaders fast-tracked a “rocket docket” of bills that had been previously vetoed by former Gov. Susana Martinez after easily passing both chambers, legislation could move at a more normal pace during this year’s session.
While top-ranking lawmakers say some priority bills could move quickly to Lujan Grisham’s desk, the fate of most bills is not likely to be decided until the final days of the session, which ends Feb. 20.
That could include legislation to make New Mexico the 12th state to legalize recreational marijuana use and tax its sales, along with a controversial red-flag gun law that would allow for firearms to be temporarily seized from individuals deemed to pose a threat.
It also means a high likelihood of frantic days and late nights at the Roundhouse, where lawmakers, lobbyists and advocates seek to get their preferred bills over the finish line before adjournment arrives.