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House finishes work on budget bills, recesses

SANTA FE – The House this morning finished voting on the last of its budget-balancing plans and recessed until later today, when the Senate is scheduled to return to the Capitol and the Legislature is expected to wrap up the special session that started last week.

The House approved on a 43-22 vote Senate Bill 2, a $316 million package to help the state become solvent.

It includes the authorization to use $131 million from a tobacco settlement fund to plug the budget deficit for the just-ended fiscal year, provides another $88.4 million from the same fund to bolster reserves for the current year, and sweeps about $96.6 million from various state government funds into the general fund.

And it approved Senate Bill 12, the so-called feed bill, appropriating about $264,000 for the expenses of the special session.

Partisan debate over a $172 million budget-cutting plan bogged down the House for much of Wednesday.

Both Republican and Democratic members of the House spent much of the day in closed-door caucus meetings, after Democratic lawmakers voiced strong objections to proposed 5.5 percent spending cuts for the University of New Mexico and other higher-education institutions.

Majority Republicans eventually relented late Wednesday, lowering the higher-education cuts to 5 percent – the same level called for in a budget-cutting plan that passed the Senate last week.

“We worked it out, and the Senate is in agreement on what we’re doing,” said House Majority Leader Nate Gentry, R-Albuquerque, who described the budget-cutting debate as the “least fun I’ve ever had in Santa Fe.”

After a lengthy debate, the House eventually voted 36-32 to approve the budget cuts, sending the plan back to the Senate for final review.

Earlier during Wednesday’s debate, Rep. Bill McCamley, D-Mesilla Park, said the spending reductions would do serious harm to higher-education institutions, many of which underwent funding cuts earlier this year.

“This has gone past belt-tightening and entered the amputation stage,” McCamley said.

But backers of the plan said it’s reasonable for higher-education spending to be cut more steeply than K-12 public schools, which would face a 1.5 percent base spending cut, citing statistics indicating the state currently spends more per student on higher education than public schools.

“We’re in a situation where we have to cut somewhere,” said Rep. Paul Bandy, R-Aztec.

Under the House changes to the Senate-passed budget-cutting bill, spending reductions would be set at 5.5 percent for most state agencies. Medicaid, the judicial branch and law enforcement would be among the agencies faced with lesser or, in some cases, no cuts.

Higher education would be cut by a total of $41.4 million, which would include a $15.5 million cut for the University of New Mexico. UNM had faced the prospect of an even deeper cut than other universities – of 8 percent – under a previous House proposal.

Meanwhile, the Senate, which adjourned five days ago after passing its own package of solvency measures, is expected to return to the Roundhouse to review the changes the House made in the budget-balancing bills.

The Senate also would have on its plate three crime bills passed by the House, although it’s not expected to act on them.

Those proposals reinstate the death penalty in New Mexico for certain violent felonies, expand the state’s “three-strikes” law to include more criminal offenses and broaden the age range of a child abuse law.

Republicans have criticized the Democratic-controlled Senate for not taking up the Martinez-backed crime bills, but Democrats have fired back by accusing the Republican-controlled House of wasting taxpayer dollars – the special session costs an estimated $50,000 per day – by not moving quickly to address the state’s budget crunch.

New Mexico is facing a $131 million budget deficit for the fiscal year that ended in June and an estimated $458 million shortfall for the current year, as a sharp drop in oil and natural gas prices has led to the state’s taking in far less revenue than expected over the last two years.

The state’s precarious budget situation has led to the possibility of the state having its credit rating downgraded, and could leave some state agencies with tough choices about how to absorb the spending cuts, if they’re enacted.

“We’re getting dangerously close to layoffs,” Senate Finance Committee Chairman John Arthur Smith, D-Deming, said earlier this week.

The solvency package being debated at the Capitol would rely on the spending cuts and various one-time fixes to plug much – if not all – of the state’s projected shortfall for the current and just-ended fiscal years.

The rest of the budget gap would then have to be addressed in the 60-day regular legislative session that begins in January, and lawmakers would have minimal cash reserves to help with the job.