New Mexico budget standoff has no quick fix
Posted 6:56 p.m. Monday
SANTA FE, N.M. — A political standoff over how to fund New Mexico state government and public schools during the coming fiscal year showed no sign of quick resolution on Monday.
As the Legislature adjourned over the weekend, Republican Gov. Susana Martinez promised to veto tax increases approved by the Democrat-led Legislature and call lawmakers back to Santa Fe to renegotiate a balanced budget, without saying exactly when. Bills that would authorize $6.1 billion in state spending and companion revenue increases from new taxes and fees had not yet reached the governor's desk Monday because of clerical requirements.
The Legislature's budget package earned broad support among Republican and Democrats in the Senate to shore up spending on public schools and state agencies by collecting new taxes and fees on nonprofit hospitals, vehicle and gasoline sales, trucking permits and online retail purchases.
Republicans in the House minority voted in unison against the taxation and revenue bill, and are urging approval alongside the governor of a comprehensive tax reform package that would eliminate hundreds of tax loopholes including traditional exemptions for schools, hospitals and most nonprofit institutions.
"We're not opposed to having a tax increase if it comes with an overhaul that prevents us from being in this situation two more years or three more years from now," said minority house whip Rep. Rod Montoya, R-Farmington, on Monday. "We have a short term problem, we have a long-term problem. Let's do it all at once."
Lawmakers including Senate Finance Committee Chairman John Arthur Smith, D-Deming, have urged the governor to come forward with more detailed priorities if she is going to call a special session. Negotiations have broken down on a host of economic initiatives, including two bills to increase the statewide minimum wage that Martinez says are slightly too generous for New Mexico's business environment.
Lawmakers are struggling to stabilize spending on public schools and state agencies amid a downturn in revenues linked to a sluggish economy and low oil and natural gas prices that typically support one-third of the budget.
The spending bill differs only slightly from the governor's rough plan, after some compromises on economic development subsidies and performance-based educational programs. But combined with tax provisions, the budget was labeled as reckless by Martinez.
The governor, whose final term ends next year, says she put forward a solvency plan for the coming fiscal year that would raise $300 million to shore up state finances without outright tax increases.
More than $100 million would come from reductions in government contributions to pension for teachers and state workers that are opposed by fellow Republicans, along with sweeps from retirement funds that pension managers say are unconstitutional.