SANTA FE, N.M. (AP) - The Legislature’s lead budget-writing committee on Tuesday recommended a 6.5% increase in state general fund spending and endorsed plans to stash away a portion of New Mexico’s windfall from oil production in trust funds that would pay for early childhood education far into the future.
The Legislative Finance Committee that operates a year-round policy and accountability office recommended a $464 million increase in sustained spending to about $7.5 billion for the fiscal year that begins July 1.
Another $325 million would be set aside in an investment trust to underwrite early childhood schooling and services, alongside smaller trusts dedicated to college affordability and rural libraries.
Legislators expect the state will receive an $800 million surplus in general fund income next year in excess of the $7 billion in current spending obligations.
Committee chairman and Sen. John Arthur Smith, D-Deming, said the Legislature’s budget proposal represents more modest spending growth than the previous year, with an emphasis on educational reforms and preparations for an inevitable future downturn in the oil sector.
“New Mexico remains heavily reliant on the booms and busts of the oil industry,” he said in a statement. “With the extra cash we’ll have available next year, we can maintain reserves at levels that can withstand another downturn and create endowments that will continue to generate income even when the oil industry is down.”
Democratic Gov. Michelle Lujan Grisham is recommending a larger, nearly $7.7 billion budget with more aggressive pay raises for public school employees and a boost in subsidies for childcare services for children of families on the cusp of poverty.
The Legislature’s nonpartisan budget office says it has no clear evidence that participation in daycare improves educational performance later. At the same time, legislators and the governor want more money to expand prekindergarten and five-week extensions of the school year for grades K-5, programs that have been documented to spur student academic performance.
The governor is seeking a 4% increase for public school employees and 3% for state workers. The Legislature wants a 3% salary increase for both sectors - with additional raises for teachers who help students with learning disabilities or limited fluency in English. There would also be extra pay increases for state police, judges and local prosecutors under the Legislature’s proposal.
“Our difference with the executive is not that far apart,” said Democratic Rep. Patricia Lundstrom of Gallup, chairwoman of the lead House budget committee. “We’re looking at targeted salaries. We want to help with retention and recruitment.”
Lujan Grisham and many leading legislators support the creation of the early education trust fund and are also seeking $35 million in new spending to provide tuition-free college education to about 55,000 in-state students.
Under the Legislature’s budget proposal, new spending that carries forward into future years includes a $210 million, 6.5% increase for public education as the state grapples with a court ruling that confirmed major failings in educational opportunity, especially among low-income and ethnic-minority families.
New Mexico is among states where parents and school districts have taken their frustrations over school performance and state budget priorities to court.
Lauren Winkler, a staff attorney at the New Mexico Center on Law and Poverty that represents parents and several school districts, said the more generous budget plan from the governor still falls short of authorizing transformative changes in education. Public schools in New Mexico rely primarily on state funding for operations.
New Mexico’s public education system already relies on investment income from two multi-billion permanent funds that are sustained largely by income from energy development on state trust land. Lawmakers hope to add $1 billion to the early education trust in coming years.
Lawmakers are proposing to set aside $150 million to initiate solvency reforms at the state’s two major retirement funds for educators and for state and local government employees. Billions of dollars of unfunded liabilities for pensions are eroding the state’s credit rating and driving up potential borrowing costs on construction projects.
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