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LFC, Gov. Disagree On State Raises

SANTA FE — A proposal to give New Mexico teachers and state workers a 1 percent salary increase — their first since 2008 — got a cool reception Wednesday from Gov. Susana Martinez and could become a battleground issue during the coming legislative session.

The raises, which would cost roughly $32 million during the coming year, were included in a proposed $5.9 billion spending plan unveiled Wednesday by the Legislative Finance Committee.

Overall, the legislative plan would increase state spending by $233 million — or slightly more than 4 percent — from this year’s levels.

Martinez, who will roll out her own spending plan today, told the Journal on Wednesday that pay raises for state employees will not be included in the executive branch budget recommendation.

The Legislature convenes for a 60-day session on Tuesday, and its central task will be to put together a state budget from the legislative and executive proposals.

The first-term Republican governor said the timing is not right for pay increases, citing possible federal budget cuts and the need to diversify the state’s economy.

“I’m concerned about that proposal because there hasn’t been a pay increase for small businesses throughout the state,” Martinez told the Journal.

“I know that state employees have done an excellent job of doing more with less, but so has the rest of the state,” she added. “What’s more important right now is to secure the economy across the board.”

Some Democratic lawmakers have complained about high job vacancy rates in state government and low employee morale under the Martinez administration. They have said pay raises would help address the perceived morale issue.

“We want to make sure we treat public employees as fair as we can,” said Rep. Luciano “Lucky” Varela, D-Santa Fe, the LFC’s vice chairman, during Wednesday’s news conference in the Capitol annex.

The average salary for the more than 18,000 rank-and-file state workers is $41,912, not including benefits, according to the State Personnel Office.

Under the legislative budget recommendation, workers earning that average salary would see their salaries increase by about $419 per year, before taxes. Teachers would receive more than half of the total increase in spending for salaries.

State Police officers and Motor Transportation Police officials would get an extra 3 percent salary increase on top of the 1 percent. That boost would help with recruitment and retention in those fields, LFC staff said.

Last year, the Legislative Finance Committee recommended salary increases for state workers, but not teachers. However, such pay raises were not included in the $5.6 billion budget signed into law by Martinez.

Reversing the trend

The budget proposed Wednesday calls for state spending to rise for the second straight year, after three consecutive years of budget cuts.

Specifically, the LFC’s spending recommendation calls for state public school spending to be increased to nearly $2.5 billion. That’s an increase of $91 million, or about 3.7 percent, over this year’s levels. It also includes about $19 million in additional funding for early childhood programs.

Higher education funding would also go up, from $757.7 million this year to $785.5 million in the coming year.

Overall, education spending would make up more than 55 percent of the state budget.

Another key spending area, health care, would also see a hefty increase in spending under the legislative budget recommendation. For instance, state spending on Medicaid would rise by $34.8 million, or roughly 3.9 percent, to $940 million in the next fiscal year.

The legislative budget recommendation was unanimously approved by the LFC’s members, but Rep. Larry Larrañaga, R-Albuquerque, said that the proposals were just a starting point and that Martinez’s spending plan will also be carefully considered.

“We’ve agreed on the priorities,” Larrañaga said. “But will there be adjustments to this and a lot of discussion? You bet there will be.”

Other key features of the recommendation unveiled Wednesday include:

♦ A 17 percent increase in funding for the state Tourism Department, from $8.3 million in this year’s budget to nearly $9.8 million in the coming year.

♦ A one-time injection of $25 million for the state’s cash-strapped road fund.

♦ Keeping about $693 million in cash reserves. That represents nearly 12 percent of state spending.

The budget recommendation would also leave about $25 million available for tax cuts, though it did not specifically endorse any tax measures.

Martinez has proposed an economic development package that includes trimming the state’s corporate income tax rate, appropriating more money for job training tax incentives and giving small businesses a tax break for hiring and retaining new employees.

The total cost for that package is estimated to be about $40 million.
— This article appeared on page A1 of the Albuquerque Journal