$6 billion state budget approved by Legislature

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By Barry Massey and Susan Montoya Bryan
The Associated Press

SANTA FE — The Legislature crossed the finish line Thursday of a 30-day session that was filled with disputes between Democrats and Republican Gov. Susana Martinez.

The House and Senate adjourned at noon Thursday.

Lawmakers have completed work on what many consider their most important assignment — a state budget to finance public education and government services. That’s heading to the governor, who can cut spending in the $6.2 billion package using her line-item veto powers.

Approval of the budget came after lawmakers agreed to increase spending on the governor’s school improvement initiatives, including possible merit pay for educators in some school districts.

Enrique Knell, a spokesman for Martinez, said the governor “appreciates the willingness of legislators to find middle ground and believes this budget represents a good compromise.”

Lawmakers passed a flurry of bills in the closing hours of the session, including proposals to finance capital improvement and water projects, regulate third-party managers of prescription drug insurance plans and establish alternative breakfast programs to serve students after their school day starts.

Also approved by the House and Senate minutes before the Legislature adjourned on Thursday was a proposal that shore up the lottery scholarship program temporarily with liquor tax money.

Cutbacks in scholarships have been looming because the program is running short of cash. Lottery proceeds aren’t keeping pace with college tuition increases.

Among the other bills winning final approval and heading to the governor were measures to:
• Authorize $167 million to upgrade buildings at colleges and universities, improve senior citizen centers and pay for library acquisitions. Voters will be asked in November to approve property tax-backed bonds to finance the capital improvements.

• Lift the gross-receipts tax from parts and labor for maintaining aircraft. Supporters said that aircraft owners now use repair shops in other states with tax exemptions, including Colorado, Texas and Arizona.

• Require counties to contribute about $26 million a year to a program helping mostly rural hospitals provide health care to poor New Mexicans. Throughout the session, there has been a dispute over how much taxing authority to give counties to cover their share of the program. State and county revenue will be used to match federal dollars, potentially generating $150 million for health care to people unable to pay for medical services.

At least one pressing issue remained unresolved, however. Lawmakers have been unable to agree on a plan for shoring up a college scholarship program that relies on revenue from the state lottery. The scholarships currently cover the full cost of tuition but cutbacks loom in the future because lottery revenue isn’t keeping pace with rising tuition costs.
Among the measures that died in the session were ones that would have:

• Let voters decide whether to legalize marijuana.

• Tapped into a state permanent fund to provide more than $100 million annually for early childhood education. Opponents contended that the higher payout would erode the fund over time.

• Imposed longer prison sentences on drunken drivers with four or more convictions.

The session played out against the backdrop of a looming election in which Martinez is seeking another four-year term and Democrats are trying to hang on to their majority in the House. Two of the governor’s Democratic challengers are state senators.

Martinez and Republicans contended that Democrats pushed the minimum wage increase as a constitutional amendment to bypass the governor and in hopes of boosting turnout of Democratic-leaning voters in the general election if the proposal was placed on the general election ballot.

Constitutional amendments go straight to voters to decide. The governor has the power to veto bills.

Democrats, just as they have in the past, turned down several of the governor’s high-profile initiatives. One proposal would have stopped the state from issuing driver’s licenses to immigrants who illegally entered the country. Another measure would have required schools to hold back third-graders who can’t read proficiently.

Democrats and school groups oppose many of Martinez’s educational policies, including a new teacher evaluation plan.
Public Education Secretary Hanna Skandera will remain in her post. She would be forced to leave only if the Democratic-controlled Senate rejected her nomination.

The budget provides for a $293 million or 5 percent increase in spending next year on public education and government programs. It provides $2.7 billion for public education — about a 6.6 percent increase over this year’s spending. It was approved by the Senate late Tuesday.

Several House Republicans complained about the proposed spending increase and said the state’s cash reserves were too low.

“I think five percent growth in the budget, in a year when our economy is struggling, may be a little bit excessive,” said House GOP Leader Donald Bratton of Hobbs.

Democrats and the governor have been at odds for much of the session over education spending. But the Senate-approved budget provides more than $30 million for initiatives backed by Martinez.

About $7 million was allocated for programs to help with the recruitment and retention of teachers. Part of that money could be used for merit pay for educators — something the Martinez administration has long sought.

But any compensation initiatives would be subject to collective bargaining agreements if those are in place in local school districts. That protection has satisfied educational unions that merit pay or performance-based salary incentives won’t be forced on local schools by the Republican governor.