SANTA FE – New Mexico’s state government is likely to deliver a jolt of one-time spending amid the pandemic while boosting sustained funding for health care and public education under a newly drafted budget bill.
The lead House budget committee on Monday unanimously endorsed the budget plan that increases general fund spending by $332 million for the fiscal year that starts July 1.
That represents a 4.6% increase over current fiscal year spending. Total annual general fund spending of $7.39 billion under the proposal includes a 1.5% raise for employees throughout state government, K-12 schools and public colleges and universities.
Larger raises of 6% are slated for corrections officers in state-run prisons, and the budget plan underwrites previously approved raises for state police.
Legislative budget analyst Bill Valdes said a decrease in the state inmate population is making more money available for prison-guard raises and programs to address recidivism and substance abuse.
A vote on the draft budget plan by the full House of Representatives is scheduled this week before the proposal moves to the Senate for possible amendments and approval.
State government income has rebounded on surging production of petroleum and a rally in oil-market prices, even as Democratic state lawmakers search for ways to reduce reliance on fossil fuels. Federal relief in 2020 to state and local governments, businesses, school districts and the unemployed also have contributed to the state’s anticipated budget surplus and $2.5 billion reserve fund.
Public schools in New Mexico rely on the state for most is their funding, and the draft budget would increase K-12 spending by 5.5% to $3.39 billion – a $175 million bump.
The plan allots $110 million toward programs that add 25 school days to elementary school calendars and extend K-12 schooling by 10 days.
“We want to extend the school year regarding the loss of learning we’ve seen this last year,” said Democratic state Rep. Patricia Lundstrom of Gallup, chairwoman of the House budget committee.
Most schools have declined the optional calendar extensions and companion money, and a bill this year from teacher and state Rep. Andres Romero of Albuquerque would allow schools to tap the funding by offering additional instructional hours during the standard school year.
State Rep. Phelps Anderson, a former Republican without current political affiliation, said that increased state spending is warranted in response to the pandemic. He too expressed concern about reviving public education after a prolonged reliance on online teaching since the outbreak of COVID-19.
“We need state government to do its part in lifting us out of this economic crisis,” he said. “I too am dismayed. ... We’ve got students who are locked out of schools. We’ve got students who are lost.”
General fund spending will increase by $64 million for Medicaid to support a surge last year in enrollment. New Mexico has the nation’s highest enrollment per capita in the federally subsidized health care program for people living in poverty or on the cusp.
The draft budget also would boost current-year spending by $119 million to expand grants to businesses to offset job training and infrastructure projects, ramp up tourism marketing as pandemic-related travel restrictions, and litigation aimed at preserving local water rights.
Economic relief proposals tied to the budget plan would draw down financial reserves by $750 million.
That relief includes $200 million in grants toward business for rent and mortgage obligations, another $200 million toward a tax holiday for restaurants and a plan to pay down state unemployment debts by $325 million.
Paying off debt to the state unemployment trust would take the tax burden off businesses to replenish the fund after it delivered unprecedented financial support to the unemployed in 2020.
The budget proposal also take aim at reducing a waiting list for services to youths with severe mental and physical disabilities, and it would dedicate more money to teen suicide prevention. New Mexico in 2018 had the nation’s highest overall rate of suicide.
Spending on “opportunity scholarships” toward tuition-free college for in-state students would increase to $10 million. Other direct spending on the state university system would increase despite recent declines in enrollment.
Separately, Valdes said local school districts are expected to receive $439 million in federal relief funding that was approved in December by Congress and and President Donald Trump, without further direct funding to state and local governments.