Copyright © 2021 Albuquerque Journal
SANTA FE – New Mexico state employees and teachers would get salary increases averaging 1.5% under a nearly $7.4 billion budget plan released Tuesday by a key legislative panel.
The proposed pay raises, which would cost about $60 million, are among the biggest differences between the Legislative Finance Committee’s spending plan and a separate proposal issued earlier this week by Gov. Michelle Lujan Grisham.
While the governor did not include broad pay raises in her $7.3 billion budget plan, several Democratic lawmakers said Tuesday that the salary increases are necessary to recruit and retain state workers and educators.
“It’s really a cost-of-living adjustment,” LFC Director David Abbey said during a news briefing Tuesday, adding that state workers have received pay increases in only five of the past 12 years.
Other differences between the two budget plans include $250 million for statewide roadwork and $300 million to backfill the state’s unemployment fund, which has been shored up with federal funds after being depleted due to the COVID-19 pandemic.
Neither of those proposals was included in Lujan Grisham’s plan, although the governor did propose making up to $475 million available for additional pandemic relief – money that could be used in various ways to assist hard-hit businesses and workers.
A Department of Finance and Administration spokesman said Tuesday that the unemployment fund will be addressed in the coming budget year, adding that the governor’s administration hopes President-elect Joe Biden will forgive loans and sign off on a new federal stimulus package.
But Sen. Steven Neville, R-Aztec, said the one-time spending to bolster the jobless fund would help avoid higher unemployment taxes for struggling New Mexico businesses.
“It’s going to be very helpful in trying to get our state back in line,” Neville said Tuesday.
Despite the differences, lawmakers said they’re optimistic agreement can be reached during a 60-day legislative session that starts next week.
And several legislators noted that both budget plans avert spending cuts, which appeared all but inevitable last year due to the pandemic and falling oil prices.
The Lujan Grisham administration directed state agencies in September to prepare for 5% spending reductions but later changed course after better-than-expected revenue estimates were released in December.
New Mexico is now expected to take in roughly $7.4 billion during the fiscal year that starts July 1 – or about $169 million more than current state spending levels.
“The New Mexico economy is struggling, but the state is not in as bad a shape as we anticipated nine months ago,” said Sen. Roberto “Bobby” Gonzales, D-Ranchos de Taos, the LFC’s chairman.
Both Lujan Grisham’s budget plan and the Legislature’s proposal rely heavily on cash reserves to fund one-time expenditures, while keeping recurring spending levels largely flat.
But both plans would authorize some targeted spending increases, specifically for public schools and health care programs.
Specifically, the LFC spending proposal would provide $185 million in one-time education funds, along with money for extended learning time and summer school programs intended to help make up for classroom time lost due to pandemic-related school closures.
Like Lujan Grisham’s plan, it would also authorize a $20 million transfer from a new early education trust fund to add additional prekindergarten slots and expand home visiting programs to more families.
In addition, the LFC budget recommendation calls for a 4.5% funding increase for the Children, Youth and Families Department, primarily to address youth behavioral health.
New Mexico has one of the highest suicide rates in the country, and some lawmakers have expressed concern about the problem being exacerbated by the COVID-19 pandemic.
“Mental health and behavioral health issues have been front and center” on lawmakers’ minds during the pandemic, said Rep. Patricia Lundstrom, D-Gallup, the LFC’s vice chairwoman.
With the 60-day session scheduled to start Jan. 19, a Lujan Grisham spokeswoman said Tuesday that the Governor’s Office was hopeful a swift agreement could be reached on the budget.
As for the proposed salary increases for state workers and teachers, the Governor’s Office said it’s vital not to “over-promise,” given the state’s financial situation.
“While pay increases for state employees is certainly something we would like to be able to support, and something the administration has advocated for strongly in the last two fiscal years, the executive recommendation for (the coming fiscal year) is focused on preserving and enhancing key investments in programs that make a difference for New Mexicans,” Lujan Grisham spokeswoman Nora Meyers Sackett said.
The average salary for rank-and-file state employees was $50,502 per year, according to a recent compensation report by the State Personnel Office.
That put New Mexico in the middle of the pack among its neighboring states, with Colorado offering higher average salaries and Arizona and Oklahoma providing slightly less pay to their state workers.