New Mexico panel recommends more cuts to balance budget
Posted January 11
SANTA FE, N.M. — A legislative panel that drafts the New Mexico state budget recommended new cuts Wednesday to avoid a shortfall in the coming fiscal year.
The Legislative Finance Committee called for a $26 million reduction in the $6 billion spending plan for the year beginning July 1.
The state is facing a $123 million gap that must be closed by new tax revenues, additional reductions in agency spending — or both.
"The committee struggled to protect vulnerable New Mexicans, public schools, public safety, and health care services without completely shutting down some state agencies," state Sen. John Arthur Smith, D-Deming, the committee chairman, said in a statement.
Under the proposal, funding for public schools would decrease by $22.5 million, or less than 1 percent. An increase in per-pupil funding to school districts was recommended, along with cuts to performance-based initiatives backed by Republican Gov. Susana Martinez.
A decrease also was recommended for spending on Medicaid health care for the poor and disabled. The programs account for about $1 billion in general fund spending and provide insurance to more than one-third of state residents.
The size of those cuts would depend on proposals for a new tax on health services. Medicaid spending cuts could be amplified by the possible loss of federal matching funds.
Facing a sustained downturn in the oil sector that has undermined state tax revenues, New Mexico slashed general fund spending by about 2.4 percent in October, with many agency budgets shrinking by 5.5 percent.
Martinez opposes tax increases. Her budget plan, announced Monday, would reduce take-home pay to state workers through pension provisions, cut funding to the Legislature, state universities and colleges, and sweep school district reserves into state coffers — among other solvency measures.
A spokesman for the governor criticized the panel's proposed cuts to classroom initiatives, along with limits on economic development incentives for job training and a closing fund designed to attract new businesses.
The recommendations by the legislative committee would increase spending through the Children, Youth and Families Department for home visits and a pre-kindergarten program.
The panel also warned that lawmakers still need to plug a deficit of as much as $85 million for the current budget year.