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SANTA FE – Pay raises for New Mexico teachers would be pared back to match the raises for most state workers, road repair money would be reduced and more dollars would be deposited in a new early childhood trust fund under changes to a $7.6 billion budget plan unveiled Tuesday by a key Senate panel.
After weeks of closed-door discussions, the Senate Finance Committee also voted to add money for Gov. Michelle Lujan Grisham’s tuition-free college plan, but a lower amount than the first-term Democratic governor proposed.
Under the retooled budget, $17 million would be appropriated to pay for Opportunity Scholarships, which would provide need-based tuition aid for full-time students who already qualify for a separate, lottery-funded scholarship program.
Those restrictions would probably mean that far fewer than 55,000 students would qualify for the new scholarship program. That figure was initially touted by Lujan Grisham, who said Tuesday that her staff was scrutinizing whether the reduced funding would be sufficient.
“I feel very confident about our ability to make a good case,” the Democratic governor said after signing an early childhood funding bill in the Governor’s Office.
Meanwhile, with a 30-day legislative session scheduled to end at noon Thursday, the changes put the House and Senate on a possible collision course.
Sen. John Arthur Smith, D-Deming, the Senate Finance Committee’s influential chairman, said the panel tried to accommodate the governor’s wishes, but he expressed unease about the state’s spending trajectory.
“I don’t think any of us can walk away from here and say the spending was controlled,” Smith said. “We’re skating on very thin ice from a spending standpoint.”
However, House Speaker Brian Egolf, D-Santa Fe, said Tuesday that Smith repeatedly refused to meet with House members to talk about a budget compromise in recent days. Time is running out, he said, because of the amount of time the Senate took to unveil its changes.
“The complete and total secrecy in which they have done this puts the House and the people of New Mexico in a really difficult spot,” Egolf told reporters.
But Smith indicated he’s willing to play hardball with House members, whom he has accused of overspending in recent days.
“I’m willing to stay for as long as they want to stay off the campaign trail,” Smith told reporters, referring to the coming election season, in which all 112 legislative seats will be on the ballot.
Overall, the revised budget plan would increase state spending by $536 million – or 7.6% – over current levels for the fiscal year that starts in July.
If approved, it would mark the state’s second consecutive year of big spending growth after several years of budgetary belt-tightening. Skyrocketing oil production in southeastern New Mexico recently raised revenue to a record high, paving the way for the budget growth.
Under the current version of the bill, teachers and state employees alike would get 4% raises. Even larger raises would be given to State Police officers, judges, corrections officers and other types of state workers.
But teachers would get 5% raises under the House-approved budget plan, and some teachers union leaders criticized the revised bill.
“I feel like education got stiffed,” said Charles Goodmacher of the National Education Association-New Mexico, a prominent teachers union.
He also said other spending provisions in the reworked bill would not go far enough to satisfy a 2018 landmark court ruling that said New Mexico was failing to meet its constitutional obligation to provide an adequate education to all students.
But backers of the revised budget bill said it was only fair for teachers to get the same salary increase as most other state workers.
Several senators also expressed concern about the state’s reliance on the oil industry, as taxes and royalties from the extractive energy industry now make up more than 40% of the state’s total revenue base.
“I want our teachers to understand: We would love to give them everything, but oil is very volatile, and we don’t know what’s going to happen in the future,” said Sen. Gay Kernan, R-Hobbs.
The Senate Finance Committee reduced a proposal for one-time spending by roughly $142 million from a House-approved budget plan.
Those reductions included scaled-back infusions in several key areas – including lowering funding for statewide road repairs from $255 million to $180 million.
That was done to keep higher cash reserves in case projected spending levels do not materialize. The current plan calls for about $1.9 billion in reserves – or about 25% of state spending – although not all of that money is easily accessible to lawmakers.
But the Senate committee, which voted 12-0 to approve the revised budget plan, also increased spending levels in some cases.
That includes funneling $320 million – an increase of $20 million – from the state’s budget surplus into the early childhood endowment fund that Lujan Grisham signed into law Tuesday.
The revised budget bill was awaiting action on the Senate floor late Tuesday. If approved there, it will go back to the House for consideration.
If the House were to reject the Senate’s budget changes, that would set up a conference committee, in which appointees from both chambers would attempt to reach a last-minute compromise.
Journal Capitol Bureau reporter Dan McKay contributed to this report.