Martinez, LFC present budgets
Gov. Susana Martinez and the Legislative Finance Committee each presented budgets this week to serve as starting points for the upcoming 30-day Legislative session, beginning Jan. 17.
The $5.7 billion LFC budget was unveiled Wednesday, while Martinez introduced a $5.6 billion budget on Thursday.
“I think we’re pretty close on a lot of things,” said Rep. Don Tripp (R-Socorro), who serves on the LFC. “The governor was a little higher on a couple of things, but there aren’t a lot of philosophical differences.”
Tripp said the committee worked closely with the governor’s office, so knew what to expect. After three years of budget cuts, both proposals call for increased spending. The governor’s plan asks for $194 million more to be spent, while the LFC is proposing $250 million.
While Martinez said the state needs to be careful not to live beyond its means, Tripp said the committee felt it could afford to stretch the budget further.
“Some revenues are up, so it’s looking a lot better for the state,” Tripp said, adding that oil and gas accounts for a large part of the increase. “Also some of the tax collections from the current tax codes are up, and personal income tax is up too.”
A key difference between the budgets is that Martinez is calling to revise the tax code. She wants the Legislature to approve $55 million in tax breaks that would benefit small businesses, the construction and manufacturing industries and businesses that hire veterans. The breaks would come in the form of tax deductions of exemptions aimed at boosting the state’s economy.
“We have to become more competitive in the state of New Mexico, and we can only do that through job growth,” she said.
Tripp said the governor’s budget will have a gross receipts reduction for small business and other incentives aimed at stimulating business. At least for him, that’s not a major issue.
“I don’t have any trouble supporting her on those types of issues,” he said.
The budgets aren’t too far apart on increases to education. More than half — about $110 million — of increased spending in the governor’s plan goes to public and higher education. There’s a $97.2 million increase, about 4 percent, for public education, while the LFC budget calls for a $89.2 million increase there.
In the LFC proposal, $23 million would go toward early childhood education.
“There would be more to early childhood education and intervention and an increase to home visitation for pre-K,” Tripp said. “The more we can address these at a young age, the better off we’ll be. I was glad to see the committee looking into that.”
Teachers and state employees would also benefit by seeing a small increase in take-home pay, with a $50 million boost from state contributions to retirement plans.
The LFC budget is more generous to higher education. Martinez is allocating $13.4 million more for higher education — an increase of 1.9 percent — while the LFC is seeking a $39 million boost — a 5.4 percent increase.
Under the LFC plan, New Mexico Tech would get a 4.8 percent increase from the general fund, which amounts to only about $35,000, but Tripp said Tech would benefit from a new funding formula in the long run.
“The idea with the new formula is to reward the outcome,” he said, adding that the new emphasis is on graduation over enrollment. “If you look at the employability of New Mexico Tech graduates, the rate is 95 percent. So for a great place like New Mexico Tech, the funding should be a boom in the future.”
Both budgets put an emphasis on increasing Medicaid, the state and federally funded program providing health care for more than one quarter of New Mexicans.
The governor’s plan asks for a $45.2 million increase to the program, while the LFC proposes 33.9 million.
Under the LFC plan, the Corrections Department would also see an $8.5 million increase to address potential increases in Medicaid and other health-related costs for inmates in state prisons.
The LFC recommends a $140.9 million increase, about 4 percent, from the general fund for judiciary. About $800,000 of that would come from liquor excise tax revenues for statewide drug-court programs.
The Seventh Judicial Court in Socorro would see a 3.4 percent increase, while the District Attorney’s office would get a 1.9 percent bump.
While an increase in spending is a positive sign for economic recovery, Tripp said there still wouldn’t be a lot of money for new capital projects.
“We’re trying to fund the projects we have,” he said.
Some state agencies, including the Environmental Department and the Indian Affairs Department, would receive cuts, under the LFC plan.
“The cuts are primarily to different agencies, redesigning the flow,” Tripp said.
LFC staff said some savings within those departments would be realized by eliminating some positions not currently filled. The governor’s plan calls for the elimination of 411 state government jobs that are vacant.
Martinez said she was optimistic that common ground could be found during the legislative session.
“I think working together in a bipartisan way is a No. 1 priority. This isn’t something we do on our own — this is something we do as a government,” she said.
Deborah Baker of the Albuquerque Journal contributed to this story.
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