This upcoming legislative session, the Republican governor and Democratic-controlled Legislature will push forward their competing plans on how to spend your taxpayer money.

A week before the 60-day session, both branches have released clashing budget proposals. The Democratic Legislature must pass a budget during session and send it to Gov. Susana Martinez, R, to sign into law. State law mandates that New Mexico's budget must be balanced.

Gov. Martinez, R, unveiled her budget plan at Piñon Elementary School in Santa Fe Thursday. It calls for $5.88 billion in spending for the state's general fund in 2014. That's a 4.2 percent increase from what's currently in the state's coffers. 

That Gov. Martinez announced her plan at an elementary school--the perfect opportunity for photo ops with the kids--underscores that she's stressing education in her budget. It was a focus of her remarks.

According to the governor's figures released to reporters, the budget calls for $232 million in new spending, 44 percent of which will be put in education.

Not much different from the Legislature--at a distance. By contrast, the Legislative Finance Committee proposes $233 million in new spending--$1 million more than the governor's proposal.

You can't see the weeds from the ariel view though. Let's take a nosedive.

A sharp contrast between the two proposals: The LFC wants $32.2 million from the general fund to be used for compensation increases for state employees, averaging out for a 1 percent pay raise. Those employees have not received a salary increase since 2008--and Gov. Martinez doesn't want to give them one this year. Her proposal factors in a 1.5 percent decrease in the amount state employees will have to contribute to their pension funds as an increase in take-home salary for those workers. 

Unions are already criticizing this part of Gov. Martinez' plan. Those employees have been contributing more to their pension plans since 2009, when a state law was passed that mandated the contribution increase from workers. The state will pick up the 1.5 percent share to those retirement plans under Gov. Martinez' plan.

LFC's plan also calls for a 3.7 percent increase on spending on public schools. Gov. Martinez calls for a 4.1 percent increase on public schools from 2013. On higher education, LFC's plan calls for a 3.7 increase in  spending. Gov. Martinez calls for a 3.2 percent increase. The governor wants $2.7 million more for pre-kindgarden spending whereas LFC recommends $5.5 million.

Gov. Martinez' proposal--in contrast with LFC's--also includes lowering the corporate tax rate from 7.6 percent to 4.9 percent.

"At 7.6 percent our tax rate is the second-highest in the region. Only California's is higher," Gov. Martinez said. "Tax burden is often the single most important consideration when a company is deciding where to put down roots or to relocate. That is why I recommend lowering New Mexico's rate from 7.6 to 4.9--just like Arizona recently did."

SFR asked what companies had told the governor that cutting the corporate tax rate was the "most important" consideration when a company is deciding to relocate (about 16:30 in the video).

"No, there are many things that are very important," the governor replied. "And most important number one that we have the jobs here that are available for our students to take and that our students are prepared to take those jobs. And hopefully they're higher-paying and higher-quality jobs so that they don't leave the state and go to another state because those higher-paying jobs are someplace else."

Gov. Martinez and the Legislature will ultimately have to agree on the best plan to address the state's economic woes. That requires big-picture thinking.

"But if we don't have a workforce, but we have the market here, then what is the point? So we have got to do all of it at the same time," Gov. Martinez said.

-Sterling Fluharty contributed to this post.

Gov Martinez 2014 Budget Proposal

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LFC 2014 Budget Proposal

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