SANTA FE – New Mexico’s Legislature approved a record-setting $1 billion annual budget increase Wednesday to bolster spending on public schools, Medicaid, public safety initiatives and an array of grants, loans and tax breaks to private industry.
The Senate approved by voice vote with no indication of opposition to endorse a roughly $8.48 billion general fund spending plan for the fiscal year starting on July 1 – a 14% increase over current-year spending.
The bill now moves to the desk of Democratic Gov. Michelle Lujan Grisham, who supports major provisions and can veto any part of the spending plan.
The budget builds on a windfall in state government income from surging oil production and federal pandemic aid.
Salary increases of at least 7% are slated for school district and state government staff members across the state, with a minimum hourly wage of $15 for public employees and higher base salaries for teachers.
Annual spending on K-12 public education would increase by $425 million to $3.87 billion, a 12% boost. Annual Medicaid spending would increase by about $240 million to $1.3 billion as the federal government winds down pandemic-related subsidies to the program that gives free health care to the impoverished.
In a state with high rates of poverty, the proposal extends free college tuition to most New Mexico residents pursuing two- and four-year degrees, and it fully pays for home-based care for thousands of people who have had severe disabilities since childhood.
Amid a record-setting spate of homicides in Albuquerque, the budget would underwrite new intervention programs aimed at curbing gun violence and boost salaries for state police by nearly 16% – with even higher increases for judges.
Democratic state Rep. Patricia Lundstrom, a lead House budget negotiator, said the bill ensures funding to help local policing agencies offer their own competitive salaries.
Legislators extended pregnancy-related Medicaid coverage for a year after births, up from two months, by spending $14 million. Most births in New Mexico are covered by Medicaid.
The budget bill pays for an initiative from the governor to establish a training academy for the film industry run by a consortium of existing state colleges and universities. It also provides $650,000 to found a climate change bureau as the state expands the regulation of greenhouse gas emissions.
Lawmakers were still racing against the clock to agree on a tax-cut package. A new provision emerged Thursday that would offer a personal income tax rebate of $250 for individuals or $500 for joint filers, at a cost of at least $337 million.
Democratic state Rep. Christine Chandler of Los Alamos, a proponent of modest tax relief, warned that those rebates could contribute to inflationary trends.
“We are entering an inflationary – you might say – spiral,” she told the lead Senate budget committee. “This amount, $350 million, pumped into the economy at this point in time could easily add to the inflationary trends that we are in right now, in one fell swoop.”
Other elements of an evolving tax relief bill would slightly reduce gross receipts taxes on sales and services, eliminate taxes on Social Security income for individuals earning $100,000 or less, and provide a per-child tax credit of up to $175 to parents. The Legislature adjourns by law at noon Thursday.
The Legislature also inched toward final approval of a package of crime-fighting initiatives that would expand surveillance of criminal defendants as they await trial, with 24-hour monitoring of ankle-bracelet tracking devices.
Legislators balked at proposals to ban pretrial release for people accused of some serious crimes. They have focused on efforts to expand police training and oversight, with funding for alternatives to traditional prosecution and incarceration. Some enhanced criminal penalties are possible.
Time was running out on efforts to shore up election oversight, expand voting access and protect election workers from harassment, after fragmented proposals were combined into one bill.
On teacher pay, legislators approved a measure to allow Indigenous language teachers to be paid at the same rate as their peers, even if they donn’t have an undergraduate degree. Bills sent to the governor earlier this week would increase teacher pay between 7% and 22%. For Native American language teachers paid as teaching assistants in many districts, their salaries could triple.
Lujan Grisham is expected to sign all of the teacher pay measures.
In consumer protection efforts, legislators sent a bill to governor’s desk Wednesday that caps annual interest rates on storefront loans at 36%, down from 175%.
In a concession to profitability, a fee of 5% can be charged on loans of up to $500, and the maximum size of an installment loan is doubled to $10,000.
In a statement, Lujan Grisham signaled her support for the legislation.
