SANTA FE – A $6.2 billion budget plan for the coming year that calls for state spending to be trimmed for the first time in five years was approved 39-1 Monday by the Senate.
Although the budget bill would provide additional funding for Medicaid and state prisons, funding for colleges and universities would be slashed by $19.6 million, and other agencies would also face cuts.
Plummeting oil and natural gas prices have forced the state’s revenue projections for the budget year starting in July to be pared back by $326 million over the past three weeks. Several lawmakers said the state’s reliance on the energy industry needs to be remedied.
“New Mexico has to learn its lesson, and we have to diversify quickly,” said Sen. George Muñoz, D-Gallup.
Senate Finance Committee Chairman John Arthur Smith, D-Deming, described the budget as the best lawmakers could do, given the worsening revenue picture.
Although the budget bill would cut state spending by roughly $96 million, most of that would be offset by taking money from various government accounts – through a separate bill yet to be voted on in the Senate.
“We’ve tried to sweep every corner we can where money might be found,” Smith said during Monday’s debate on the Senate floor.
He also said lawmakers could have to return to Santa Fe for a special legislative session if revenue continues to fall.
In response to the worsening budget situation, Gov. Susana Martinez’s administration has said it is limiting nonessential spending, in part by cutting back on state employee travel across all agencies.
A Martinez spokesman said that the Governor’s Office is still reviewing the Senate changes to the budget bill, but that it appears to prioritize spending recommended by the governor.
“Even in a difficult revenue environment, investing in public safety, continuing education reforms and improving our economic development efforts must always be key priorities,” Martinez spokesman Chris Sanchez said.
The two-term Republican governor has not changed her opposition to tax increases, a stance she’s held since taking office in 2011, frustrating some Democratic lawmakers.
Although bills have been filed during this year’s 30-day legislative session calling for an increase in the state’s gas tax rate, a reimposition of the food tax on grocery items and a delay in an already-approved corporate income tax rate decrease, none of those bills appear likely to gain approval.
Sen. Cisco McSorley, D-Albuquerque, cast the lone “no” vote in the Senate against the budget bill after voicing concern that the spending plan didn’t provide more funding for Medicaid and solar energy programs.
“I think we were left with a witches’ brew from the House and the executive (branch),” McSorley said.
But Sen. Ron Griggs, R-Alamogordo, said lawmakers are partly to blame for the state’s budget situation because they passed dozens of gross receipts tax exemptions in recent years.
He also cautioned that the state’s budget could remain on shaky ground for the foreseeable future, saying, “We may not see oil and gas (prices) come back for years.”
Under the Senate budget plan, pay raises would be provided for State Police officers, corrections officers in state-run prisons and some veteran teachers. However, most rank-and-file state employees would not receive raises.
With less than three full days before the Legislature adjourns, the pared-back budget, House Bill 2, now goes back to the House for final approval because the Senate trimmed about $88 million off the original bill.