Revised $9.57 Billion Spending Plan Slashes Transfer To New Mexico Permanent Fund

Senate Finance Committee Chair Sen. George Muñoz


The Senate Finance Committee endorsed a revised $9.57 billion spending plan Saturday that would increase the state’s spending in the upcoming fiscal year by nearly 14%.

The full Senate is expected to consider the proposed budget on the floor Sunday afternoon.

Tax rebates for New Mexicans are still on the table but what the final figure will be is still up in the air amid ongoing discussions at the Roundhouse on an omnibus tax policy bill.

Charles Sallee, deputy director for budget for the Legislative Finance Committee, said the Senate’s proposed budget assumes rebates of $500 for single filers and $1,000 for joint filers — less than proposed by Gov. Michelle Lujan Grisham.

Regardless of what the amount turns out to be, Sen. George Muñoz, a Gallup Democrat who chairs the Senate Finance Committee, said the spending plan includes something for everybody.

“I can’t find any losers in the state,” he said.

Except, perhaps, the Severance Tax Permanent Fund.

The spending plan approved by the House of Representatives called for a transfer of $850 million to the fund, part of a long-term strategy to convert what officials call “now money” into “future money” through investments.

The Senate’s version reduces the transfer by $375 million to fully fund the Opportunity Scholarship, a taxpayer-funded college tuition program, as well as for tax rebates and leaves general fund reserves at about 30%, or about $2.87 billion.

“The governor is pleased that the Senate has restored funding to many of her priorities that are critical to continuing to move the state forward, including the Opportunity Scholarship, the Rural Health Care Delivery Fund, the Law Enforcement Recruitment Fund, universal and healthy school meals and economic relief payments in the form of rebates,” Maddy Hayden, a spokeswoman for the governor, wrote in an email.

“Unfortunately, the level of funding for child care is inadequate for the many working New Mexico families who have benefited from free child care under this administration,” she added. “We are also disappointed in the deficit in funding for initiatives related to housing and homelessness. The $100 million the governor proposed to address this issue has not been adequately funded.”

The governor had also proposed covering the cost of educators’ health insurance premiums. The proposed budget calls for a 1% education pension contribution increase “and provides parity with state employees for educator health insurance coverage,” according to a fiscal impact report.

Muñoz has said his committee proposed boosting average pay increases from 5% to 6% across the board to offset health insurance costs for the entire workforce, not just teachers.

This appears to be a point of contention for Lujan Grisham.

“The governor has supported numerous raises for New Mexico educators and supports an additional raise this year, but remains committed to pushing for no health care insurance costs for educators,” Hayden wrote.

The budget proposal passed the Senate Finance Committee 5-2.

Sen. William Burt, R-Alamogordo, expressed concerns spending levels are too high.

“I don’t think we’re reserving enough,” he said.

“We’re all concerned about oil and gas — way too volatile,” he said of the industry that provides nearly half of the state’s revenues. “And I’m very disappointed that we’re only putting $475 million in the permanent fund.”

While the revised budget proposal would reduce the transfer to the Severance Tax Permanent Fund, it does include investments of $150 million in new permanent funds and the Water Trust Fund.

Follow Daniel J. Chacón on Twitter @danieljchacon.

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