Here comes what may be the battle of the 2017 legislative session.
Days after Gov. Susana Martinez called for what amounts to a 3.5 percent reduction in take-home pay for tens of thousands of state employees and teachers to help balance the state’s budget, the powerful chairman of the Legislative Finance Committee (LFC) said that won’t happen.
Martinez’s proposal would reduce the state’s contributions to pension plans and shift the burden to employees. But the pension contributions “won’t be touched,” Sen. John Arthur Smith, D-Deming, was quoted by The Santa Fe New Mexican as saying.
“We’ve got phenomenal rates of vacancies [in state government] that are a direct result of low compensation,” Smith was quoted as saying, adding that Martinez’s proposed cuts would make it even more difficult to recruit qualified workers.
On Thursday, the LFC, which Smith chairs, approved its own budget recommendations in advance of the 60-day session that begins Tuesday. There are some cuts in the budget recommendations, but the proposal also assumes that “$123.3 million of new revenue or additional adjustments will be enacted to fully balance the budget.”
In other words, the LFC isn’t definitively rejecting additional cuts, but it’s also leaving the possibility of tax increases or eliminating tax exemptions on the table. During a special session to balance the budget last fall, senators, on a party-line vote, approved a freeze of the 2013 corporate tax cuts, but the proposal died in the House, which was controlled by Republicans at the time.
The November election means Democrats now control the House, and a freeze of the corporate tax cuts and other tax increases have a greater chance of passing the Legislature. That would send the proposals to Martinez, a Republican, who continues to insist on cuts and sweeps of various funds as the solution to the state’s budget woes.
“This sends a message that it’s up to state government to tighten its own belt – not our hardworking families,” Martinez said earlier this week.
On Thursday, Smith and Senate Majority Leader Peter Wirth, D-Santa Fe, fired back.
“The plan we saw from the governor earlier this week drains money from local communities and cuts the salaries of hard-working New Mexicans who we look to each day to keep our communities safe and our storefronts open,” Wirth said in a news release.
“Under Governor Martinez’s proposal, our state agencies and the families they serve would bear an even greater burden as a result of her refusal to act quickly,” Smith said in the release. “It’s imperative that we move quickly in a bipartisan and responsible manner that protects the very employees and the families that Gov. Martinez’s proposal would leave holding the bag.”
Martinez, on the other hand, said this week that the Legislature was to blame for the need to cut employee take-home pay, which she said was a proposal aimed at avoiding furloughs.
“Lawmakers avoided making tough choices [during the special session], but we have some time now to work together on a budget that restrains spending, doesn’t raise taxes, and protects the progress we’ve made on education, economic development and public safety,” Martinez said.
How policymakers will resolve this standoff between the Democratic majority in the Legislature and the governor isn’t clear. But Wirth insisted that the LFC proposal is responsible and bipartisan.
“This blueprint protects the investments we make in our teachers, law enforcement, and nurses while balancing the state checkbook,” he said.