Gov. Susana Martinez

STATE News:

• Budget Targets Funding Toward Initiatives That Would Create Jobs, Reform Education and Increase Student Achievement, and Improve Child Well-Being

LAS CRUCES — Today, Gov. Susana Martinez announced her Fiscal Year 2016 budget proposal, which targets funding toward initiatives designed to grow the State’s economy and improve the education and general well-being of New Mexico children.

According to the latest meeting of the consensus revenue forecast committee, projected revenues exceed this year’s spending – by roughly $141 million, and due to proper spending restraint, the State’s current reserve level stands at roughly 10 percent.

The Governor’s $6.29 billion budget proposal, which represents an increase in recurring state spending of 2.3 percent (or $141 million), can be found online on the Governor’s website at www.governor.state.nm.us.

“This budget targets and prioritizes helping our kids learn, ensuring that our children and families are safe, and creating a diverse economy and additional jobs throughout New Mexico,” Martinez said. “Since taking office and working with the Legislature to resolve the state’s largest structural deficit, we’ve taken a responsible approach to spending that prioritizes available dollars on reform in education and improving economic growth. I am confident that we will once again be able to come to agreement with the Legislature on a responsible budget that continues to prioritize these critical goals and keep moving New Mexico forward.”

The Governor’s FY 2016 budget includes:

• $68 million in new funding to support the needs of New Mexico’s public school classrooms and students. This represents 48 percent of the Governor’s proposed total new recurring spending. In addition to covering basic school services, such as higher utilities and enrollment growth, this additional funding will be invested, in part, in raising the minimum starting teacher salary from $32,000/year to $34,000/year, providing $100 debit cards to each teacher for the purpose of purchasing supplies in their classrooms, and starting a teacher mentoring program to help turn around low-performing schools – initiatives that cost a total of roughly $11.5 million.

  Additional education reform proposals designed to help struggling students and schools succeed include:
   

  • Continued funding of the New Mexico Reads to Lead initiative, and of various initiatives designed to intervene in, and turn around, schools rated as a “D” or “F” under the State’s school grading system.
     
  • $1.5 million to provide stipends to help recruit and retain teachers in hard-to-staff subjects and areas, specifically bilingual, special education, and math and science teachers.
     
  • $43.2 million in funding for Pre-K and K-3 Plus, an increase of $2.7 million over last year’s funding. Under Governor Martinez’s administration, funding and participation in Pre-K has more than doubled, and K-3 Plus is now a permanent, well-utilized intervention that allows over 18,000 struggling students to receive additional summer instruction and help each year.

The Governor’s budget also provides $25 million for textbooks and instructional materials in New Mexico classrooms, aims to combat truancy in middle and high schools, and expands the successful “Breakfast After the Bell” initiative into middle schools and high schools throughout the state.

• $8.2 million in funding to expand the use of child advocacy centers throughout New Mexico, increase the use of family support workers in the effort to prevent child abuse, increase rates for shelter services and safe house interviews, and hire additional social workers, investigators, child abuse reporting staff, and other key personnel at the Children, Youth, and Families Department (CYFD). In addition, CYFD will be completing an IT system that, pursuant to a Governor’s directive, will allow law enforcement officers to access a family’s CYFD case history when they are dispatched to a child abuse incident. $1 million in funding will also be allocated through the Higher Education Department to establish a loan repayment program for state government social workers and related positions, whereby they can receive assistance with the payment of student loans in return for service to the State.
   
• $10 million to, among other things, implement the second phase (of three) of a plan to increase the compensation of commissioned officers at the Department of Public Safety, offer new officer training academies, and recruit/retain more emergency dispatchers and forensic scientists.
   
• $1.5 million in new funding for the Department of Tourism to increase the impact of the successful New Mexico True advertising campaign. Tourism is on the rise for the fourth straight year in New Mexico, with spending by tourists in our communities increasing by 7 percent in 2013, and by a total of 24 percent since 2010. We have also seen a record number of visitors to New Mexico each of the last few years.
   
• $33.8 million in funding for Medicaid, including additional support for the delivery of behavioral health services in New Mexico.

With respect to economic development and job creation, the Governor is proposing several investments and reforms designed to help small businesses grow, attract companies and jobs from out of state to New Mexico, and make our state a high-tech, innovation leader.

These initiatives include additional funding for the successful Job Training Incentive Program ($1.5 million recurring, $5.5 million non-recurring), which serves to support small businesses as they hire and train new workers in New Mexico. In addition, her budget calls for $25 million in non-recurring spending and $25 million in capital outlay spending for a stronger closing fund for economic development projects, through the Local Economic Development Act (LEDA). These LEDA grants are designed to help the state and local communities invest in infrastructure projects to attract specific companies to the state.

And, similar to last year’s recommendation, the Governor is proposing a four-pronged approach to encourage greater innovation in New Mexico, with the goal of supporting and expanding our high-tech workforce and industry base. This includes allocating $1 million toward the Technology Research Collaborative to help bring products being developed at our labs and universities to the marketplace in New Mexico, reforming the Higher Education Endowment Fund to better attract top researchers and professors to the state, expanding the Angel Investment credit to increase the amount of private investment in start-up companies in New Mexico, and expanding the Technology Jobs Tax Credit to offer stronger incentives for the creation of high-tech jobs.

The Governor will also push for improvements to tax credits for businesses that choose to locate in MainStreet districts and downtown areas in mid-sized and rural communities (on top of proposed increases to the MainStreet program itself), for legislation that would allow small business owners to pay less in personal income taxes on their business income while their business is in its early stages and growing, and for general reforms to the current renewable energy tax credit.

With respect to non-recurring spending, the Governor proposes a total of $105 million in FY15 and FY16 to cover one-time obligations, initiatives, and various contingency items. These include, among other items, emergency supplemental funding for small school districts, funding for certain cash reconciliation and financial control functions, funding for Spaceport operations, and $4.8 million to cover the previously unfunded cost of complying with an FY09 lawsuit relating to union employee compensation.

An additional $6.5 million would be allocated for the Lottery Scholarship to ensure that participating students would be able to receive roughly 95 percent of their tuition costs through the scholarship for the next three semesters (Spring ’15, Fall ’16, and Spring ’16).

Roughly $18 million in non-recurring revenue would be spent on critical information technology projects to improve the efficiency of state government and its service to New Mexicans, including projects to create an online small business portal, upgrade MVD systems to make them more user-friendly, improve the management of inmate case files to ensure that prisoners are not released early, digitize state personnel records, and modernize the equipment and systems used for various types of inspections that are conducted by the Construction Industries Division.

As noted earlier, the Governor’s budget proposes using a portion of the State’s total severance tax bonding capacity for LEDA grants. In addition, she proposes spending $60 million per year in severance tax bonds, for three years, to leverage federal and other funds in order to complete large-scale, major highway construction projects throughout the state.

This budget is built upon the revenue estimates generated by the consensus revenue forecast committee in December 2014. Executive budget priorities, and the overall proposed level of new spending, is subject to change as the revenue forecast changes, which is possible given recent decreases in the price of oil and natural gas and increases in other revenue streams, such as gross receipts and personal income taxes.

The current volatility in state revenues, and the recent decrease in the overall revenue projection between August and December of 2014 led the Governor to take a cautious approach with respect to the base budgets in many state agencies. As a result, her proposal calls for no increases in the budgets of statewide executive branch officials, including the Governor’s Office, Lt. Governor’s Office, Secretary of State, Land Commissioner, Attorney General, Auditor, Treasurer, and the PRC – and for similar flat budgets for the legislative and judicial branches.