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Rep. Patty Lundstrom, a Gallup Democrat who chairs the Legislative Finance Committee, addresses the crowd Thursday during a news conference to release its budget recommendation at the state Capitol annex.
Speaker of the House Brian Egolf, D-Santa Fe, chats with Rep. Patty Lundstrom, a Gallup Democrat who chairs the Legislative Finance Committee, after a news conference Thursday to release its budget recommendation at the state Capitol annex.
The Legislative Finance Committee’s vice chairman Sen. George Muñoz, D-Gallup, addresses the crowd Thursday during a news conference to release its budget recommendation at the state Capitol annex.
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Rep. Patty Lundstrom, a Gallup Democrat who chairs the Legislative Finance Committee, addresses the crowd Thursday during a news conference to release its budget recommendation at the state Capitol annex.
Speaker of the House Brian Egolf, D-Santa Fe, chats with Rep. Patty Lundstrom, a Gallup Democrat who chairs the Legislative Finance Committee, after a news conference Thursday to release its budget recommendation at the state Capitol annex.
The Legislative Finance Committee’s vice chairman Sen. George Muñoz, D-Gallup, addresses the crowd Thursday during a news conference to release its budget recommendation at the state Capitol annex.
Amid record revenue projections, the Legislative Finance Committee on Thursday unveiled a $9.44 billion spending plan lawmakers contend would help put the state in a position to withstand downturns in the economy, which they’ve grappled with in the not-so-distant past.
The LFC’s proposed budget calls for significant fund transfers intended for future spending, including:
“We have what we call ‘now money,’ and we’re investing it into what we consider to be future use,” Rep. Patty Lundstrom, a Gallup Democrat who chairs the influential legislative budget committee, said during a news conference with other committee members and high-ranking lawmakers.
“We don’t feel like we need to be up here just spending like drunken sailors, so to speak,” she added. “We want to make sure that we’re reinvesting into certain funds and back into the permanent fund for use when we don’t have this kind of revenue.”
Similar to Gov. Michelle Lujan Grisham’s executive budget recommendation, which was released earlier this week, the LFC spending plan for fiscal year 2024 would increase spending by $1 billion, or about 12%.
The release of the two spending plans, which serve as blueprints to develop the state’s budget, comes as the Legislature prepares for the start of a 60-day legislative session beginning Tuesday.
The LFC’s proposed budget recommends reserves at 30%. The governor’s executive budget recommendation would put reserves at nearly 35%.
And while the governor’s proposal calls for 4% pay raises for all state government and public school employees, the LFC’s spending plan calls for average pay raises of 5%, plus additional increases for judges, district attorneys, public defenders and other employees.
Megan Green, executive vice president of Local 7076 of the Communications Workers of America, said the labor union appreciates that both branches of government recognized the importance of increasing state employee salaries “to help address the high vacancy rates” across state agencies. But she said the proposed raises “do not even keep up with the rising cost of consumer goods.”
“The rising cost of living, combined with the increased cost for commuting and childcare resulting from the cancellation of the telework policy, makes it more and more challenging for state employees to keep working for the state,” she wrote in an email.
The LFC proposal also sets aside $1 billion for possible tax rebates and tax reform, such as reducing the gross receipts tax rate and eliminating the tax on business-to-business services, known as pyramiding.
The governor’s budget proposal calls for tax rebates of $750 for single filers and $1,500 for joint filers.
The rebates would cost an estimated $1 billion.
Asked about key differences in the governor’s budget and LFC’s spending plan, Lundstrom said it’s primarily in the use of nonrecurring funds.
“We’ve seen, just with a general overview, that the executive is using nonrecurring funds a little differently than we would,” she said. “We are very careful about things being recurring, and if it’s truly recurring, we want it noted that way in budget building.”
But generally speaking, Lundstrom added, “I’m pretty proud of the fact that when you look at the bottom line, there isn’t that big of a difference.”
Lundstrom said “the most transformational action that we can take during” a revenue windfall is to prepare the state for tough times.
LFC’s vice chairman, Sen. George Muñoz, also a Gallup Democrat, echoed the sentiment.
“New Mexico has an opportunity, right, to really set itself up,” he said.
As an example, Muñoz said the state could create an environmental fund to deal with natural disasters, such as wildfires.
“The governor had to declare 72, 76 executive orders in emergency funding for the fire,” he said, referring to massive wildfires last year. “If we gather the funds and we put the money in those funds, then the government becomes operational, so now we’re not declaring executive orders.”
Leaders in both chambers praised Lundstrom, Muñoz and other committee members for the “incredible work” they did in crafting the budget proposal.
“Having been here for a while, I certainly have been on a [budget] roller coaster, and I want to assure everyone I am incredibly encouraged by this budget because it has spending but also has fiscal responsibility,” said Senate Majority Leader Peter Wirth, D-Santa Fe.
“What’s critical moving forward is that we use these nonrecurring funds in ways to generate long-term funding, and I think you’re going to hear a lot about different funds modeled on the early childhood fund,” he said.
Nora Meyers Sackett, a spokeswoman for the governor, wrote in an email the Governor’s Office is pleased to see the Legislature shares many of its priorities, though she didn’t specifically respond to differences in proposed pay raises for state workers and teachers, and the rate of reserves in each spending plan.
“With an unprecedented positive financial outlook for the state as a result of continued targeted investments and economic growth, we feel it’s important to continue the investments in educators that we’ve made alongside the Legislature, including by enacting an innovative measure to cover the individual cost share for school personnel health care premiums, and we’re glad to see our shared commitment to continued improvement in compensation for educators reflected by raises being prioritized in both budgets,” Sackett wrote.
“We are also encouraged to see both proposals prioritize fiscal responsibility,” she added. “ … Overall we are looking forward to working together to craft a successful final budget that delivers for our state.”
Follow Daniel J. Chacón on Twitter @danieljchacon.
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