SANTA FE – The New Mexico state Senate approved an annual budget plan for state government that increases general fund spending by nearly 5% to shore up educational funding, bolster environmental oversight and provide an array of economic relief to low-income workers and businesses.
Recent amendments to the spending plan for the fiscal year starting July 1 would tap newly approved federal pandemic aid to pay down the state’s unemployment insurance debts – limiting future payroll tax hikes – and funnel more dollars toward health care for the poor under Medicaid. Overall general fund spending would increase by $373 million to $7.45 billion.
The 29-13 Senate vote, with most Republicans in opposition, sent recent budget amendments to the House for consideration. The Legislature has until noon Saturday to send a state spending plan to Democratic Gov. Michelle Lujan Grisham, who can veto any and all budget appropriations.
The Senate proposal includes a 1.5% salary boost for public employees in state government and public schools.
The plan “invests in our teachers, in our economy, our educational system and our environment,” Senate finance committee chairman George Muñoz said. Financial reserves are expected to swell to $1.8 billion as a buffer against economic instability.
Republican Sen. William Burt said the proposed increases in spending go too far.
“This budget does a lot of good for a lot of people,” he said. “I think it’s unsustainable.”
Other Republicans used budget deliberations to highlight the the governor’s spending on alcohol and gourmet food during the pandemic out of a discretionary fund for social obligations and diplomacy. An amendment to shrink the fund was voted down.
The budget bill takes into consideration $400 million in economic relief measures that provide a four-month tax holiday to restaurants, grants to business that lost income during the pandemic, and a $600 tax credit to low-income families.
Democratic state Sen. Antoinette Sedillo Lopez of Albuquerque urged Senate colleagues to provide a larger salary increase of 3% to public employees and ensure a “living wage” of $15 – in excess of city and statewide minimums.
“I think it is very disturbing, that we set a really poor example,” Sedillo Lopez said of low-end public wages.
The suggestions were rebuffed by Democratic legislators including Sen. Jacob Candelaria, who said low-income residents of New Mexico in the public and private sectors are set to receive a windfall of state and federal pandemic aid payments.
He accused Sedillo Lopez of morally shaming Democrats on the Senate floor in her bid for Congress in a June special election to succeed Deb Haaland, the newly confirmed U.S. Secretary of the Interior.
State spending on public education would increase by 5.8% to $3.35 billion, with increased taxpayer spending toward public school pension plans.
An additional $979 million in federal pandemic relief is expected to be distributed directly to public schools within the next three years.
Higher education funding to state colleges and universities increases 2.8% under the budget plan, from $841 million to $867 million. That includes $1 million to cover revenue shortfalls in university athletics programs due to the pandemic.
The state is using $1 billion in reserves to prop up general fund spending during the current fiscal year. But state income forecasts have rebounded on surging oil production and market prices for petroleum.
New Mexico state government expects to receive $1.63 billion directly from the landmark $1.9 trillion COVID-19 relief bill approved by congressional Democrats and President Joe Biden. The budget proposal would put $600 million into the state unemployment trust to stave off future payroll tax increases on businesses.
Proposed Senate budget amendments would boost student financial aid programs, including the governor’s signature tuition-free college program for in-state students, by $21.5 million.
Authorized spending at the state Environment Department would increase by $2.3 million to $15.4 million.
