SANTA FE – The fate of a $250 million-plus solvency package aimed at bridging a New Mexico budget deficit remained in limbo late Tuesday, after the Senate declined to sign off on several House changes to key solvency bills.
The vote not to concur set the stage for an open conference committee meeting to be held. Both the House and Senate appointed members to serve on the committee, which would attempt to reach a compromise on the bills in question.
House Speaker Brian Egolf, D-Santa Fe, told the Journal he thought there may be appetite for a deal, which would allow the measures to be sent on to Gov. Susana Martinez’s desk for final consideration.
“If they’re close to where we are, we might be able to wrap it up (soon),” Egolf said Tuesday afternoon.
And Senate Finance Committee Chairman John Arthur Smith, D-Deming, who was one of three Senate conference committee appointees announced Tuesday, also sounded an optimistic tone.
“You assume there’s going to be reasonable people and you can hopefully meet at the 50-yard line,” Smith told reporters.
However, a plan to hold the conference committee meeting late Tuesday was scratched, apparently due to discord in the House, and tentatively rescheduled for today.
Conference committees used to meet in secret, but are now required to be open to the public under a 2009 law signed by former Gov. Bill Richardson.
One key hang-up between the House and Senate appears to be how to implement funding reductions for New Mexico school districts.
The Senate voted in favor of a plan to reduce funding for nearly all districts by 2 percent, while the House has supported a modified plan that would exempt districts with minimal cash balances – those with less than 4 percent in reserves.
“I don’t think as a Legislature we should be picking winners or losers,” said Sen. Jacob Candelaria, D-Albuquerque, during Tuesday debate. “We’re in a crisis, and we don’t have the luxury of taking that approach.”
The Senate plan would generate slightly more in savings – nearly $50 million – but the House version would offset that by temporarily suspending funding for certain water infrastructure projects. The Senate has opposed that idea.
In all, there are four primary solvency bills that have been hotly debated by lawmakers in the opening week of the 60-day legislative session.
One of the four bills, House Bill 4, has been approved by both legislative chambers and sent to the governor’s desk for final consideration. It would generate roughly $88 million, primarily by changing how the state distributes money to fire departments.
The three other solvency measures were all headed to the conference committee process after the House and Senate could not sign off on matching versions of the bills.
New Mexico is facing a projected $69 million budget deficit for the current fiscal year, and more difficult financial challenges in the budget year that begins in July.
And that’s after belt-tightening efforts were enacted last year, when lawmakers approved sweeping spending cuts and other one-time budget fixes.
The state’s budget woes have already caused its top bond rating to be downgraded, and some lawmakers have expressed concern about a second downgrade.
In addition, some courts have implemented partial closures, and the Supreme Court’s chief justice has warned that payments to jurors may have to be halted starting in March.
A financial analysis released Tuesday by S&P Global Ratings described New Mexico as one of six energy-producing states that have slipped into recession, due primarily to a sharp decline in oil and gas prices and production.
Alaska, Louisiana, Oklahoma, North Dakota and Wyoming are the five other states.