Proposal could cut employees’ take-home pay

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By Barry Massey
Associated Press

SANTA FE — Educators and state workers would see a drop in take-home pay next year under a budget-balancing proposal by a legislative committee that would require public employees to contribute more to their pensions while the state cuts its share by $50 million.

The pension shift is a key provision in a budget plan recommended Friday by the Legislative Finance Committee to trim state spending by $194 milliion, or an average of 3.5 percent next year.

The committee recommended spending $5.4 billion on public schools, higher education and general government programs — from prisons and courts to health care for the needy — in the fiscal year that starts July 1.

No tax increase would be needed to balance the budget under the committee’s plan, which serves as a starting point for the Legislature when it convenes on Jan. 18.

“When we’re short on dollars, we’re all going to have to share in the pain, and I think this budget does that,” said Sen. John Arthur Smith, a Deming Democrat and committee vice chairman.

Republican Gov. Susana Martinez, who is to release her budget proposals on Monday and campaigned against tax increases, “looks forward to working with the Legislature to craft a bipartisan, balanced budget,” said spokesman Scott Darnell.

Under the pension proposal, government workers and educators would contribute an extra 1.75 percent of their salaries. That means a drop in after-taxes pay, averaging about 1.4 percent for a single worker earning $41,000 a year — roughly a $22 reduction in each paycheck — according to the committee.

A similar 1.5 percent pension shift was enacted in 2009, and the committee’s budget assumes that will continue next year.

Lawmakers said the pension contribution change — intended to be in effect for just one year — would be less painful to workers than unpaid furloughs, layoffs or a permanent salary cut.

But the proposal drew sharp criticism from the leader of an educational union.

“Clearly this is one more attempt of the Legislature to balance the budget on the backs of employees,” said Charles Bowyer, executive director of the National Education Association-New Mexico.

In the current budget year, which ends in June, the state is spending $5.6 billion. That includes about $380 million in federal economic stimulus money, which won’t be available in the next fiscal year and has created the prospect of a budget shortfall in the coming year.

Most of the federal money went to pay for public schools and Medicaid, which provides health care for about a fourth of the state’s population.

The committee proposed about a 3 percent, or $79 million, reduction for public education, including the pension change. Lawmakers said they could save $22 million by revamping the school funding formula.

Overall, the budget would provide about $2.3 billion for schools and education-related programs next year.

Higher education would be cut by more than 6 percent.