Gov. Susana Martinez says she wants to sweep “legislative pork projects” and state lawmakers’ retirement fund to help plug a hole in the state budget and resolve a standoff that has left legislative and higher education funding in limbo.
Heath Haussamen / NMPolitics.net
Gov. Susana Martinez
Martinez’s office announced the plan Wednesday with few details and no support from Democrats in the Legislature or Senate Republicans, so it may be a non-starter. Still, Martinez touted the support of House Minority Leader Nate Gentry, R-Albuquerque, in calling the proposal an “agreement.”
“I’m grateful for the work of legislative leaders like Rep. Nate Gentry and others to help come to this agreement,” Martinez, a Republican, said in a statement released by her office.
Who the “others” are isn’t clear. Martinez’s announcement mentioned only Gentry and didn’t indicate whether the plan has the support of the House Republican caucus Gentry leads. Even if it had such support, the proposal would also need the backing of some Democrats in the House, who hold the majority in that chamber, and approval in the Senate.
House Speaker Brian Egolf, D-Santa Fe, was quoted by The Santa Fe New Mexican as saying he’s spoken informally with the governor’s staff but “negotiations have not occurred.” And Senate Majority Leader Peter Wirth, D-Santa Fe, was quoted as saying Senate leaders “have not seen the governor’s plan so cannot comment.”
Many lawmakers were likely to see the governor’s proposal as another assault on them, as they did when Martinez vetoed all funding for the Legislature several weeks ago. The Legislative Council is suing the governor, arguing that her vetoes of funding for the Legislature and higher education for the fiscal year that begins July 1 are unconstitutional. The N.M. Supreme Court will hear arguments in the case on May 15.
“I’m a little leery of where she’s at, and I’m patient enough to let the courts resolve this,” Sen. John Arthur Smith, D-Deming, was quoted by the Albuquerque Journal as saying after Martinez announced her plan. Winning support from Smith, the chair of the Senate Finance Committee, is key to any budget deal.
Martinez’s office said her plan would be proposed in an upcoming special legislative session. She hasn’t yet set a date, but she may be seeking a deal before the Supreme Court hearing.
Martinez also plans to add reform of the state’s gross receipts tax (GRT) to the session’s agenda. While that proposal could eliminate a number of loopholes in the GRT, including some for hospitals and internet purchases, it could also lower the overall rate. Whether the result would bring in any additional revenue to help the state’s ailing budget isn’t clear. Martinez continued her pledge to not raise taxes on Wednesday.
She has also vetoed a tax-hike bill that would have raised an estimated $350 million per year with new taxes and fees on fuel and vehicle purchases, among other things. The bill passed the Senate with bipartisan support but had no Republican support in the House. Without that bill or other tax increases, if lawmakers successfully undo Martinez’s vetoes of legislative and higher education funding in court the state’s budget wouldn’t be balanced.
The proposal to reform the state’s GRT has bipartisan support, at least conceptually, but navigating the web of hundreds of exemptions, and deciding which to eliminate, while also considering how much to lower the overall rate, is complicated. Some doubt such legislation can pass during a special session with little public scrutiny and debate.
There are also questions about whether taking money from lawmakers’ retirement fund, which is managed by the Public Employees Retirement Association, is constitutional.
The fund sweeps Martinez is proposing would be another temporary fix that doesn’t address the state’s long-term financial situation. State government is largely dependent on fluctuating oil and gas prices and federal aid that has been decreasing in recent years.
Meanwhile, Martinez’s vetoes have put the state’s colleges and universities in the difficult position of not being able to plan for the fiscal year that begins in a few weeks — and come at a time when high-school seniors are deciding whether to attend college in state or out of state. Several university presidents and student body presidents from around New Mexico have spoken out against the veto.
The governor appears to be trying to sell her plan in part by proposing funding increases in two areas. She said her proposal would boost funding for the UNM Comprehensive Cancer Center by $1 million and the higher education financial aid fund by $2 million.
“Anybody would be crazy to oppose it,” Gentry was quoted by the Journal as saying about the governor’s proposal.
Martinez didn’t release any other numbers or details about her plan, even as she asked for bipartisan support.
“I hope that Democratic lawmakers will join us in this plan to come together and put New Mexicans first,” Martinez said.