Senate Approves Record Budget

New Mexico lawmakers are closing in on the priority business for the legislative session as the Senate adopted House Bill 2 on Monday.

The budget bill for the upcoming fiscal year plans for how the state will spend more than $10.2 billion in anticipated revenue and covers nearly 300 pages. Senators on both sides of the aisle lauded the proposal during the floor hearing, with the measure passing 31-10 after less than two hours of debate.

“If you ever want a sleepless night, talk about spending $10 billion,” said Senate Finance Committee Chairman George Muñoz, D-Gallup, just before the vote, noting the state has weathered budget deficits in recent decades to come out on the other side this year, with the “highest reserves, the most true reserves the state has ever had.”

The proposed budget, which leans heavily on oil gas revenue, sets aside 30% in reserves and allocates $653 million more in recurring spending than the current year’s budget, or about 6.8% more. It includes: $5 million for food banks; $60 million for workforce training; $17.6 million for pre-K expansion; $75 million for childcare assistance; an additional $50 million in the housing trust; $50 million for rural health care and hospitals; $7 million for state police vehicles; $1.3 billion in recurring money for higher ed; and $4.4 billion for the “largest ever Public Education Department recurring budget,” Muñoz explained.

It would also allocate $50 million to a new Indian Education Trust Fund, plus positions $19.7 million in services to combat homelessness as well as $22 million for housing; and calls for 3% raises for state employees as well as separate hikes to judicial and State Police pay.

The budget includes increases for the beleaguered Children, Youth and Families Department intended to lower case loads, increase the number of professionals in the workforce and provide additional training as well as additional tracking of the department’s performance.

He also noted the budget accounts for contingencies in the event of a drop in the price of oil or natural gas, with nearly $2 billion heading to endowments and expendible trusts.

“There are trainloads, and cars and cars of contingency…a mile-long train of how we have set New Mexico up to fight off recessionary pressure and to fight off if there is a decline in those industries,” Muñoz said.

Senate Majority Leader Peter Wirth, D-Santa Fe, said lawmakers aimed to take “now money and turn it into future money,” adding he was proud that they had accomplished that goal, including $300 million for the Conservation Legacy Fund to create a steady recurring stream of funding for water, outdoor recreation and other projects.

Several Democratic senators, including Sen. Gerald Ortiz y Pino, D-Bernalillo, voted in favor of the budget but noted the need for investments now rather than later.

“I fully appreciate investing for the future needs in terms of finances, but I also agree that if we spent a little more investing in now, we may not have so many needs in the future,” Ortiz y Pino said.

Sen. William Burt, R-Alamogordo, who said he had not voted in favor of a proposed budget in recent years, supported the proposal because, among other reasons, it supports rural hospitals and will “put a big dent” in sorely needed road projects.

Albuquerque Sen. William Tallman was the sole Democrat to vote against the proposal. He read a list of ten reasons why, including: a lack of changes in alcohol excise taxes; no action to address GRT pyramidding; no reform to capital outlay processes; no money for an arena in Albuquerque; and too little money for food banks.

Sen. Crystal Diamond Brantley, R-Elephant Butte, said she voted no largely because the budget cannot sustain “inevitable downturns,” and did not make “major investments in mental health” or “meaningful tax reductions” for business.

Labor leaders lamented the Senate version’s overall salary plan for state workers, which reduced increases in the House version from 4% to 3%.

Communications Workers of America 7076 “members are incredibly disappointed with the 1% reduction in the appropriation for State Employee salaries,” reads a statement the union issued immediately after the vote.

The House will next consider the Senate’s amendments before the measure can move to the governor’s desk for possible action. The Senate vote comes with two and a half days remaining in the session, which ends Thursday March 15 at noon.

Read Gov. Michelle Lujan Grisham’s executive budget recommendations here.