In all, the budget proposal for the fiscal year starting July 1 would increase state spending by more than $253 million, or roughly 4.3 percent, over this year’s level.
It also would mean overall state spending would rise for the third straight year. The spending level would be slightly larger than it was in 2008, before a steep economic downturn led to several years of budget cuts.
“This is the first time we’ve really been able to move forward (since the recession),” said Sen. John Arthur Smith, D-Deming, vice chairman of the Legislative Finance Committee, which puts together the Legislature’s initial budget proposal.
Public schools and universities would receive the lion’s share of the increased spending under the legislative budget plan, with roughly $183 million of the $253 million in new spending in those two areas.
Higher pay for new teachers and more money for existing early childhood programs are among the LFC’s specific education targets.
However, the legislative budget plan does not include an explicit “merit pay” provision tying higher educator pay to a teacher evaluation system, as sought by Gov. Susana Martinez’s administration.
Instead, the legislative recommendation would allow school districts to decide whether to dole out merit-based pay hikes in excess of the 1.5 percent salary boost or come up with other types of compensation increases.
A spokesman for Martinez, who will unveil her own budget proposal next week, criticized parts of the legislative budget plan.
“The targeted reforms in the executive (governor’s) recommendation will provide the accountability, reform, and innovation that the legislative budget proposal lacks,” Martinez spokesman Enrique Knell said.
“Furthermore, the full (legislative) budget proposal doles out millions of dollars’ worth of untargeted, across-the-board government employee pay raises, while dramatically under-funding economic development efforts.”
Specifically, the Republican governor is concerned the legislative plan does not provide enough funding for initiatives such as an early warning system designed to prevent teens from dropping out of school and an online portal for parents to monitor their children’s progress, Knell added.
Although several Republican lawmakers also voiced concern about the approach to education spending, the leader of a local teachers union applauded it.
“Basically, we think this budget takes the right approach,” said Charles Bowyer, executive director of the National Education Association-New Mexico. “It protects New Mexico’s tradition of local control.”
“We’re not opposed to performance-based pay – we’re opposed to merit pay based on student test scores,” he added.
The salary increases would mark the second consecutive year state employees would receive pay raises, after four years without one.
Most state workers got a 1 percent salary hike this year, though many employees have said the increase was largely wiped out by higher health insurance premiums and other costs.
Under the terms of the LFC budget plan, all state workers and teachers would receive a 1.5 percent pay increase in the coming fiscal year, which begins July 1. The cost of that pay raise would total about $50 million in state spending.
An additional $40 million would be distributed to state agencies and school districts so they could come up with their own plans for additional compensation. Those plans could bring individual salary increases up to 3 percent or higher, according to LFC staff.
Rep. Luciano “Lucky” Varela, D-Santa Fe, the LFC’s chairman, has criticized the Martinez administration for not filling vacant state government jobs quickly enough. He said the additional funding could help boost employee morale.
“We thought an incentive aimed at recruitment and retention would be a good idea to present to the Legislature, and hopefully the governor would sign off on that,” Varela told the Journal.
Meanwhile, Rep. Jimmie Hall, R-Albuquerque, highlighted a proposed increase in pay for teachers’ assistants as an important part of the spending plan.
“Those are the unsung and unrecognized heroes of public education,” Hall said.
After the Legislature approved a massive tax package on the final day of the 2013 legislative session, lawmakers said they don’t expect to make sweeping changes to the state’s tax code during this year’s session.
“The big package was passed a year ago, and we’re waiting to see how it evolves,” said Sen. Carlos Cisneros, D-Questa.
The compromise tax bill passed during the 2013 session included a decrease in the state’s corporate tax rate, larger rebates for television series filmed in New Mexico and a gradual phaseout of the subsidies large cities and counties receive in exchange for not levying a tax on grocery items.
Although big-dollar tax proposals might face long odds during this year’s 30-day legislative session, some lawmakers said more must be done to improve the state’s business climate.
“We need to make sure we’re looking at everything we can to improve business in New Mexico,” said Senate Minority Leader Stuart Ingle, a Portales Republican.
Ingle pointed out the state is heavily reliant on federal government spending and oil and natural gas production, which has historically been a volatile revenue source.
Other highlights in the budget proposal unveiled Friday include:
- A funding increase of roughly 24 percent for the state Tourism Department, which has ramped up out-of-state marketing efforts.
- A larger pay increase for State Police officers that, combined with the base salary hike, could amount to an 8 percent bump in pay.
- A one-time transfer of $10 million to bolster the state’s water trust fund.
- Decreased funding for Medicaid, due to program savings and additional federal funding available to expand the joint federal-state health care program.
The legislative and executive branch budget proposals are both typically released before the start of the state’s legislative session. The spending proposals will be blueprints for lawmakers during the coming session, which begins Jan. 21.