Back to business
The New Mexico Legislature opened its 2012 session on Tuesday, with Gov. Susana Martinez delivering her State of the State address, setting the to-do list for the 30-day session.
In even-numbered years, the Legislature addresses tax and budgetary matters and issues put on call by the governor. As expected, Martinez — a Republican who will have bills sent to her by a Legislature with a Democrat majority — raised issues she has brought to the table before, including repealing the law that allows driver’s licenses to be issued to illegal aliens, social promotion in public schools and restructuring government. Bills addressing those and other matters will be introduced by legislators but this session is largely about building the budget, which figures to be in the range of $5.7 billion.
The good news is that the 2012 Legislature isn’t faced with having to try to make up a budget deficient, as it has the last couple years. The bleeding has apparently stopped, and state agencies and programs that experienced cuts in the past will generally see modest increases.
Martinez and the Legislative Finance Committee each released proposed budgets two weeks ago, and both of them call for increased spending. They each allocate more money to public and higher education, Medicaid and boost pay to public employees. A difference is that Martinez’s $5.6 billion plan offers tax breaks to the business sector.
Rep. Don Tripp (R-Socorro) is a member of the LFC — as well as the Appropriations and Finance Committee — and spent most of last week in Santa Fe preparing for the session. He said much of what happens this session will involve divvying up the budgetary pie.
“There’s $250 million to add to the budget and that will be allocated to different agencies,” he said. “Out of that $250 million, public schools will get about $90 million and higher ed will get $25 million. There’s also increases to the Medicaid budget, and there’s $8 million recommended by the governor to help nursing homes.”
Federal Medicare cuts have put a number of nursing homes in New Mexico at risk of closing, and Tripp said the governor’s recommendation would benefit facilities like Good Sam’s in Socorro.
In addition, there’s about $45 million that would go to Medicare, a program that provides health-care coverage to more than 500,000 New Mexicans.
While state agencies and programs may have a little more money to work with, Tripp said the increases would be modest.
While increased spending may be a good sign, Tripp said there still isn’t a lot of money to put toward capital projects.
“The last two or three years, it’s all been statewide projects or big-area projects,” he said. “We will have some projects come up with G.O. (General Obligation) bonds. They get paid off every two years, so we’ll issue new projects and vote on them. There’s $180 million this year. The total capacity is $350 million, but we’ll only go for 180 because it won’t raise taxes.”
A key difference between the Martinez budget proposal and LFC plan is that the governor calls for tax breaks to businesses, while the LFC’s does not.
Under Martinez’s plan, small businesses would be exempt from having to pay gross receipts taxes. It also addresses “tax pyramiding” — when the same service or item is taxed multiple times — by relieving gross receipts taxation from costs for subcontractors.
“We (the LFC) did not build that into the budget,” Tripp said of the gross receipts exemption. “If it does come to pass, we’ll have to figure out how that’ll be handled.”
That and other issues will be addressed by the Legislature over the next 29 days as lawmakers set the course for New Mexico’s future.
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