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          Front Page

Special Session Will Start Next Week

By Deborah Baker
Journal Staff Writer
          SANTA FE — The 30-day legislative session sputtered to a stop with no agreement on a budget or tax hikes, ensuring a special session that Gov. Bill Richardson said will begin Wednesday.
        Some weary lawmakers questioned the wisdom of returning that soon.
        Democratic leaders in the Senate suggested waiting until April, when updated revenue estimates would be available. That was echoed by Senate Republicans, who said waiting would allow lawmakers to craft a budget using later revenue information.
        The governor said there was potential for a budget compromise and he wanted to take advantage of the momentum by calling lawmakers back soon.
        He also said he didn't want a special session to interfere with the pre-primary election period for House members — they can't solicit campaign contributions while in session, for one thing — and that he didn't "want to send a signal to the financial markets that our budget is not concluded."
        Lawmakers struggled to come up with a $5 billion-plus budget for the fiscal year that begins July 1, foundering on how to plug a projected revenue gap of up to $600 million.
        The Senate and House butted heads over tax increases and spending cuts, never coming to terms before the session ended by law at noon Thursday.
        "I was very disappointed. ... They were very close," Richardson said.
        He gave the Legislature an "A-minus" grade for nonbudget issues, praising the passage of the Hispanic Education Act, whistle-blower protections, State Investment Council restructuring, a tribal infrastructure measure and more.
        Senate Majority Leader Michael Sanchez, D-Belen, acknowledged there had been movement toward a budget agreement in the past couple of days, but said Wednesday is "too early" for a special session.
        House Speaker Ben Lujan, D-Santa Fe, summed up the just-concluded session in football terms.
        "We were at the 1-yard line and just couldn't throw the final pass to make that touchdown" he said. "We are hoping that if we do come into a special session that we won't be here for very long."
        The special session would be devoted almost exclusively to budget matters, with perhaps "another item or two" on the agenda, according to the governor.
        "Nobody wants to increase taxes, but, starting with me, we may have to look at some options," Richardson told a news conference.
        Lawmakers failed to send him legislation creating an ethics commission, and he said he may put that on the agenda for a special session. The bill ran into opposition from various good-government groups that complained it was too secretive and had more potential penalties for people who filed complaints than for officials who violated ethics standards.
        The governor said he would not put domestic partnerships — blocked in the Senate — on the to-do list for a special session.
        Lawmakers did send the governor one piece of the budget puzzle: a bill to shore up the state's cash reserves. It frees up nearly $150 million by canceling dormant capital projects from around the state.
        However, not enough lawmakers voted in favor of the solvency measure to make it effective immediately and Richardson suggested it might have to be revisited in a special session.
        Finance and Administration Secretary Katherine Miller said the state expected no cash-flow problems, even if the law didn't take effect for another few months.
        House Republican Whip Keith Gardner of Roswell said lawmakers should have completed the budget.
        "That was our job," Gardner said. "The Constitution said we were supposed to pass a balanced budget. We chose not to do that."
        Senate vs. House
        The House approved more than $300 million in tax hikes, including a temporary half-cent increase in the gross receipts tax rate and a 1.5 percent personal income surtax, starting with married people filing separately with taxable incomes of at least $100,000 a year.
        The Senate countered with more spending cuts and $180 million in tax increases, including a bump in the cigarette tax and a reimposition of sales tax on certain "non-nutritional" food items, quickly dubbed the tortilla tax.
        "The big problem was here in the Senate, because we wouldn't agree to any new revenues without cutting spending almost dollar for dollar," said Sen. Gerald Ortiz y Pino, D-Albuquerque, who disagreed with that leadership strategy.
        The Senate's budget proposal included cuts of about 3 percent to public schools, state agencies and government services. The House version would have reduced spending by about 1 percent.
        The two chambers agreed on one tax bill, to ratchet up tax compliance on out-of-state residents. It's projected to funnel nearly $16 million into state coffers.
        Lawmakers disappointed the governor by rejecting his proposals for a ban on cell phone use while driving, tougher penalties for gang activities, and mandatory jail time for first-time drunken drivers.
        Nor did they heed his request for legislation to solve the problem of tax lightning, a phenomenon in which people see significant increases in their property tax bills the year after buying a home.
        Richardson wanted an end to double dipping, and lawmakers delivered in the session's final hours. The bill ends the practice of government workers getting both pensions and salaries, although it doesn't apply to current double-dippers.
        The Legislature also approved the carrying of concealed weapons in restaurants that serve beer and wine. Richardson was noncommittal about whether he would sign it.
        Bills that never made it out of the Legislature included same-day voter registration and a cap on medical malpractice awards for doctors' practices.
        Senate Republicans blasted the governor for loading up the 30-day agenda with nonbudget items.
        "If the governor were so concerned about a balanced budget during this financial crisis, why did he send down messages on over 200 issues?" asked Sen. William Sharer, R-Farmington.
        The Republicans also faulted the governor for not proposing his own detailed budget proposal.
        Journal staff writers Dan Boyd, Sean Olson and Martin Salazar contributed to this report.

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