SANTA FE, N.M. (AP) — New Mexico legislators moved closer Wednesday to an annual budget agreement that is likely to increases spending on education by nearly half a billion dollars and channel a windfall in tax income toward infrastructure and economic stimulus, with Senate approval of a general fund spending plan.
By a 39-2 vote, the state Senate approved a spending increase of just over $700 million, or 11, percent, to $7 billion for the fiscal year beginning July 1. Spending on public education would increase by $448 million to $3.2 billion as the state grapples with a court order to improve schooling for poor, minority students.
The bill now returns to the House to consider scores of Senate amendments. The House is expected to challenge Senate provisions for public school salaries.
A separate bill pending in the Senate would spend an additional $933 million on state and local infrastructure projects, from roads to rooftop solar and high-speed internet.
Typically the state issues bonds to borrow money for such infrastructure improvements. This year, lawmakers are proposing to spend $858 million on capital projects directly from the state general fund, amid a windfall in state income linked to record-breaking oil and natural gas production.
Democratic Gov. Michelle Lujan Grisham and legislators in the Democratic House majority are seeking to make good on campaign promises to boost spending on a troubled public education system and invigorate the state's economy with stimulus spending on construction projects and reforms to spur growth in the clean energy sector, film and moribund economic sectors.
Senate Finance Committee Chairman John Arthur Smith, D-Deming, said state government finances are tethered closer than ever to the oil and natural gas production, estimating the industry accounts for 45 percent of general fund income. He urged the industry on with a cheerful chant of "drill baby, drill."
At the same time, Democratic lawmakers are rushing to trim the state's reliance a boom-and-bust oil sector by creating a new state office to promote outdoor recreation and tourism and by approving major new incentives for solar and wind energy.
Lujan Grisham sought a slightly larger, $800 million general fund spending increase and has the power to line-item veto individual spending provisions or the entire budget — though major disagreements are unlikely.
Estimated state income is outpacing spending obligations by about $1.4 billion for the fiscal year that ends in June, and another $1.1 billion for the year starting in July.
The House is seeking across-the-board 6 percent average raises for school staff, while the Senate wants average raises of 6 percent with relative winners and losers.
"Those are two very different things," said Democratic Sen. Bill Soules of Las Cruces.
The House and Senate have both endorsed 4 percent pay increase for state workers.
Transportation projects within the general fund spending bill account for $250 million in expenses designed to boost economic growth, along with $89 million for maintenance projects and $50 million in local government road funds.
The Senate version of the budget would increase subsidies to the private sector, channeling $60 million toward a closing fund that aids new or expanded businesses in New Mexico with infrastructure needs.
The spending plan also would fund startup costs for a proposed agency for early childhood education. Increased spending is proposed for oilfield regulation amid a petroleum-production boom in the southeast corner of the state.