“Prudent” budget recommendation from Democrats and Republicans in legislature

By Rob Nikolewski on January 9, 2013
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LFC Chairman and state Sen. John Arthur Smith (D-Deming) at news conference, 1/9/13

Democrats and Republicans on the influential unveiled their budget proposal for the 2013-14 fiscal year on Wednesday (Jan. 9) that calls for spending $5.88 billion from the state’s general fund — a $233 million increase from the previous fiscal year.

“It’s a prudent budget,” committee vice-chairman (D-Santa Fe) told reporters of the recommendations that all 16 members of the LFC — Republicans as well as Democrats — signed off on.

Tomorrow (Jan. 10), Gov. and her staff are expected to release their own recommendations. Then, starting on Jan. 15 when the new, 60-day legislative session begins, everyone will try to hammer out a deal.

“This is just the beginning, a starting point,” Rep. Varela said.

Rep. Luciano “Lucky” Varela at LFC news conference, 1/9/13

“This isn’t exactly what the (Martinez) administration will put forth, but it’s very close,” Rep. (R-Albuquerque) said.

The LFC recommendation amounts to a 4.1 percent increase over last year’s budget. That may seems like a healthy figure but the committee’s figures represents a cautious approach that leaves the general fund reserves at 12 percent, which is considered a safe amount.

“We’re going to move gingerly,” committee chairman (D-Deming) said, pointing to uncertainties on the federal level (sequestration and upcoming debt ceiling talks on Capitol Hill) that could leave New Mexico’s economy — which is so dependent on dollars from Washington DC — vulnerable.

“It is imperative we proceed with caution,” Sen. (D-Las Vegas) said.

The New Mexico economy has been struggling. All the other surrounding states have seen a net growth in the past year while New Mexico has seen a net loss.

Gov. Martinez wants to from 7.6 percent to 4.9 percent to make it comparable to neighboring states to help jump-start jobs.

Some critics might point to the LFC recommendations as too cautious but Rep. Varela said, “We need to make sure that tax cuts the administration proposes … really grow our jobs in New Mexico.”

“In general, the committee avoided adding new programs or, with the exception of early childhood (services), expanding exisiting programs,” Sen. Smith said. “But just taking care of basic government operations used most of the revenue growth. The state budget continues to be under great pressure.”

About a quarter of the state’s revenues come from severance taxes from the oil and gas industries and one of the concerns looking ahead is the potential for natural gas prices falling.

“The oil industry has been extremely generous to us this year,” Smith said. “That’s most where this ($233 spending increase) came from.”

“I personally feel lucky to be in a state with rich oil reserves,” Sen. (R-Albuquerque) said.

Here’s a quick look at some of the LFC recommendations:

*$5.88 billion in spending from the state’s general fund

*1 percent pay increase for state employees, including public school teachers and staff — which would be the first raise since 2008

*an increase of 3.7 percent for public schools

*an increase of 3.7 percent for higher education

*an increase of 3.9 percent for Medicaid

*an increase of 3.7 percent for the Department of Public Safety

You can for a copy of the news release the LFC handed out this morning.

And if you really want to take a swan dive into the numbers, for a 147-page volume of the details of the recommendations.

Posted under Capitol Report.
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One Comment For This Post So Far

  1. Joe Taxpayer
    8:26 pm on January 10th, 2013

    I’m amazed how the state unions are all of a sudden trying get raises for employees now. But when King Bill was bankrupting our state the union was no where to found, the pin heads in the legislature were to busy kissing his a*s to care about state employees or the people of New Mexico. If state employees want a really big raise then do your self’s a favor and get rid of the union and keep the $18.00 a paycheck in your pocket. That’s more then a worthless 1% raise.

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