Battle of the branches: NM judiciary files lawsuit accusing state of improperly blocking leave payouts

SANTA FE — A dispute between New Mexico’s judicial and executive branches is getting gnarly.

The state Administrative Office of the Courts on Monday filed a lawsuit accusing the top budget official in Gov. Michelle Lujan Grisham’s administration of overstepping his authority by blocking paid time off payments for judicial employees.

In a petition filed with the Supreme Court, the judicial branch agency claimed Department of Finance and Administration Secretary Wayne Propst is violating the state Constitution’s separation of powers by interfering in the court system’s ability to make its own budgetary decisions.

“We attempted to work with DFA to resolve this issue amicably, but unfortunately these attempts failed,” Administrative Office of the Courts Director Karl Reifsteck said. “This left no choice but to file a lawsuit to preserve the judiciary’s authority as a co-equal branch of state government.”

The lawsuit specifically claims the DFA began to balk at processing the judicial leave payouts in late June after previously approving them for more than a year.

However, a DFA spokesman said Monday the agency has the legal duty to oversee all spending approved by lawmakers in order to ensure accountability for taxpayers.

The judicial branch’s leave program pays employees about 180% more than standard state payouts, DFA spokesman Henry Valdez added.

“The lawsuit’s outcome could have severe consequences because it challenges and distorts New Mexico’s constitutional checks and balances, especially the Legislature’s role in approving spending and DFA’s fiscal oversight of that spending,” Valdez said.

He also cited a June legal opinion from Chief Deputy Attorney General James Grayson that concluded the judiciary’s leave policy conflicts with specific restrictions imposed by the Legislature on payouts to state employees for unused sick leave.

The Department of Finance and Administration requested the nonbinding opinion and stopped approving the payouts after it was issued.

The judicial branch’s paid time off policy was adopted in May 2023 and applies to roughly 2,000 employees, who can use accrued time off for vacation, medical care or other approved purposes. It does not apply to judges.

Since Propst began refusing to process leave payments in June, about 250 judicial employees have retired or left their jobs, according to the lawsuit.

Those employees have thus been unable to get lump sum payments for the leave they were owed.

Reifsteck, who recently succeeded Artie Pepin as the director of the judicial branch’s administrative arm, said the courts’ leave policy helps to recruit and retain employees.

Judicial branch officials also say the leave policy actually saves money compared to the traditional state government leave policy, as it incentivizes employees to work until their retirement date instead of stopping work weeks before their scheduled retirement date in order to collect unused sick leave.

Meanwhile, it’s rare but not unprecedented for New Mexico’s judicial branch to ask the Supreme Court to intervene in disputes with the executive branch.

In 2014, the Supreme Court ruled state judges were entitled to 5% salary increases after finding then-Gov. Susana Martinez’s veto of raises approved by the Legislature was incomplete.

In that case, four retired judges were appointed to hear the case along with one Supreme Court justice, after the court’s four other justices recused themselves.