Gov. Susana Martinez called Thursday for New Mexico’s spending on public schools and Medicaid to increase as part of her $5.9 billion state budget proposal, but her opposition to salary increases for state workers prompted an outcry from one of the state’s largest labor unions.
The first-term Republican governor said her budget plan for the coming fiscal year would apply spending increases — totaling $232 million — to pressing state needs.
“This budget seeks to make New Mexico more competitive by reforming education and leveling the playing field to help small businesses create new jobs, all while protecting the safety net for those who are most vulnerable,” Martinez said.
However, her decision not to recommend a base salary increase for all state workers — who have not seen their base pay increased since 2008 — was criticized by the American, Federation of State, County and Municipal Employees Council 18.
Carter Bundy, the union’s political director in New Mexico, said state workers and teachers have seen their take-home pay decrease in recent years due to an increase in how much money they have to contribute to their retirement accounts.
While Martinez’s budget plan would restore the employee contributions to previous levels, Bundy said that action is not enough.
“All her budget does is end the pay cuts, which is already in law,” Bundy told the Journal. Taxpayers also contribute to the retirement plans through appropriations by the Legislature.
While it does not call for an across-the-board salary hike, the executive branch’s spending plan would provide $11 million in merit-based pay raises for teachers who score highly in newly implemented state evaluations. Those merit-based raises could reach 10 percent, Martinez said.
In other key spending areas, such as education and health care, Martinez’s budget plan for the upcoming fiscal year bears similarities to the recommendation unveiled earlier this week by the Legislative Finance Committee.
Overall, the legislative plan would increase state spending by $233 million for the coming year, while Martinez’s plan would increase spending by about $232 million — slightly less.
The executive and legislative budget proposals will be debated by lawmakers during the upcoming 60-day legislative session, which begins Tuesday. Once a budget is passed, it will be sent to Martinez for final approval.
A conservative-leaning Democratic lawmaker said Thursday he saw no immediate problems with the Martinez budget recommendations, although he did note the difference on employee salary increases.
“I don’t see any major barriers at this point in time,” said Senate Finance Committee Chairman John Arthur Smith, D-Deming.
The governor’s budget would increase state spending on public schools by more than $101 million by hiring more reading coaches for elementary schools and expanding access to Advanced Placement classes, among other things.
Medicaid spending would also increase, including about $3 million to hire more than 100 employees to help implement the expansion of the joint-federal health care program that Martinez announced earlier this week she would implement. Federal government will pay for the rest of the Medicaid expansion, at least for the next three years.
However, the Governor’s Office said the state would see a net savings of $16 million in the coming year due to additional tax revenue stemming from the expansion of Medicaid benefits to an additional 170,000 New Mexicans.
Meanwhile, Martinez’s budget proposal would leave nearly $50 million available for tax breaks designed to make the state more economically competitive with its neighbors.
That includes a proposal to lower the state’s corporate income tax rate from 7.4 percent to 4.9 percent. That tax cut would likely be phased in over several years, Finance and Administration Secretary Tom Clifford said Thursday.
The Legislature’s budget recommendation would leave only about $25 million available for tax cuts, or other similar measures.
In addition to the initiatives included in her budget plan, Martinez said she is willing to work with the Democratic-controlled Legislature to make additional changes to the state’s tax structure. She said she is confident she can work well with Democratic legislative leaders, even after a bruising 2012 election season.
“No governor ever expects to get everything they ask for,” Martinez said at a news conference at a Santa Fe elementary school. “As a Republican governor with a Democrat-led Legislature I don’t expect to (get everything I want approved), but I do expect to continue to have meetings and negotiations with them and advocate for my positions, just like they will for theirs.”
However, the salary increase proposal is shaping up as an early sticking point for the session.
While the LFC plan calls for $32.2 million to be spent in order for all state employees and teachers to received a 1 percent salary increase, Martinez said she does not believe the time is right for such a measure.
“I don’t think when we are losing government jobs, 400 alone in the month of November, is a time for us to start giving pay increases,” Martinez said.
Budget recommendations unveiled this week by Gov. Susana Martinez and the Legislative Finance Committee are similar in many areas, but there are differences. Here’s a breakdown: