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House Approves Budget, Cuts if Economy Falters

SANTA FE – With one week remaining until New Mexico legislators wrap up their work, a $5.6 billion spending plan is on its way to the state Senate.

The House of Representatives voted 70-0 Wednesday in favor of the budget measure, which calls for next year’s state spending to be increased by $215 million – or about 4 percent – from this year’s levels. Most of the new spending would go toward public schools and Medicaid.

After three straight years of recession-related budget cuts, as well as one round of tax hikes, lawmakers suggested the state’s financial outlook is improving.

At a glance
The House voted 70-0 Wednesday in favor of a bill authorizing $5.6 billion in state spending during the fiscal year that begins July 1. Here are some highlights of HB 2:
⋄  $89.3 million more for public education – 3.8 percent increase
⋄  $39.6 million more for higher education – 5.5 percent increase
⋄  $37.8 million more for Medicaid – 4.4 percent increase
⋄  $8.7 million more for corrections – 3.4 percent increase

“We’re hoping we can start to fill a few holes up in the next few years,” said Rep. Rick Miera, D-Albuquerque. “It’s going to take a while, but I believe we’re moving in the right direction.”

The unanimous 70-0 vote on the budget came after Democrats and Republicans on a key House budget panel were able to reach a deal on budget-adjusting language.

The bipartisan vote on the budget bucked recent trends – the House vote on the budget last year was 35-34.

“We were 99.9 percent in agreement on everything (this year),” said Rep. Jimmie Hall, R-Albuquerque, who sits on the House Appropriations and Finance Committee.

The budget measure could still be amended in the Senate, though Senate Finance Committee Chairman John Arthur Smith, D-Deming, said Wednesday that he did not foresee the need to make any major changes.

The approved budget plan allows for as much as $42 million to be spent on shoring up the state’s two public retirement plans or tax breaks proposed by Gov. Susana Martinez. The Republican governor has proposed a $55 million tax cut package.

Smith, who indicated a final Senate vote on the budget could happen by early next week, said there is a “strong possibility” tax breaks will not be approved by the Legislature before the 30-day regular session ends Feb. 16.

Because of concern over sagging energy prices and other economic factors, the budget plan also calls for automatic spending reductions for most state agencies to be implemented if economic data from later this year show that the state is not on track to take in as much money as currently projected.

A Martinez spokesman has said the first-term governor would prefer to have the authority to decide where spending cuts should be made in such a situation.

“As the budget proposal continues to move through the Legislature, she will continue to work across party lines to help ensure that our budget is fiscally responsible, invests in ensuring that our kids can read and succeed and seeks to make New Mexico more competitive so that we can create jobs,” Martinez spokesman Scott Darnell said Wednesday.

The budget measure, HB 2, calls for nearly $50 million to be used to boost the state’s contribution to the retirement plan of public workers, including teachers. However, unlike a previous legislative budget recommendation, it does not include a salary increase for state employees.

New Mexico lawmakers are required to approve a balanced budget every year, though budgets can be tweaked after being passed.
— This article appeared on page A4 of the Albuquerque Journal