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New Mexico State Budget Passes House, Goes to Senate

Feb 24, 2021

  Santa Fe, N.M. - The next budget for the state of New Mexico is now in the hands of the Senate, after passage by the House.  Here is a statement from the NM House Democrats, with highlights of the plan:

 

Today, the state’s budget or House Bill 2, a bill that prioritizes New Mexico’s economic relief and provides a framework for recovery, passed the House of Representatives.

 

The General Appropriations Act of 2021 is a reflection of the legislature’s priorities, making appropriations for economic relief programs and responsibly continuing the state’s investments in education, public safety, health, infrastructure, and long-term economic development. HB 2 appropriates $7.39 billion for Fiscal Year 2022, an increase of 4.6%, or $332 million over FY 2021. It puts the state’s cash reserve balance at $1.76 billion, or 24% of current expenditures. About half of the increase is replacing federal stimulus funds “swapped” in the FY 21 budget.  

 

“This budget represents a clear framework for our state’s recovery that is forward-looking, and helps families and small businesses get back on their feet,” said bill sponsor and Chair of the House Appropriations and Finance Committee Rep. Patricia Lundstrom (D-Gallup). “Our Constitutional duty is to prepare a state budget, and I am incredibly proud of the work by HAFC members and staff who’ve come together during one of the most trying times in our state’s history to get this budget done.”

 

"Our budget sees schools re-opening, fully funds extended learning time programs, and addresses historic education inequities," said HAFC Vice-Chair Rep. Nathan Small (D-Las Cruces). "We're also looking ahead by investing in healthy watersheds, clean air, and safe water alongside Outdoor Recreation to grow our economy and safeguard our environment."

 

“Anticipating in this budget the health needs of New Mexicans during a pandemic has been very challenging, but I think we’ve done the best possible job to keep those needs top of mind,” said HAFC member Rep. Candie Sweetser (D-Deming). “As Medicaid enrollment increases, we’ve responded with added state funds into the program and with enhanced federal matching funds, New Mexicans can feel secure in knowing they will have the access to the affordable, quality health care they need.”

 

“This budget provides a substantial increase in support to New Mexico’s tribes, pueblos, and nations,” said HAFC member Rep. Anthony Allison (D-Fruitland). “Even before the pandemic, tribal communities faced significant challenges, all of which have greatly increased over this past year. With millions targeted specifically to address these issues, I am proud of what we have accomplished in this budget and will continue to advocate for greater support ahead.”

 

Economic Recovery 

Due to the actions taken by the Legislature in the past two special sessions, and with the economy beginning to take an upturn in certain sectors, especially energy production, New Mexico has been able to play an active role in economic recovery. While other states are cutting services, New Mexico will continue its investments in education, public health, and economic development.   

 

The General Fund Financial Summary includes one-time appropriations of $402 million for the economic relief measures contained in HB 11, SB 2, and SB 3 and an additional $325 million to replenish the Unemployment Trust Fund. It also includes $17.5 million for the Local Economic Development Act (LEDA), and $7 million for the Job Training Incentive Program (JTIP).

 

Education 

HB 2 also provides $110 million for extended learning as schools work to make up for lost instructional time. It distributes $22 million to the recently established Early Childhood Education and Care Department to expand pre-k, home visits, and increase support for child care workers, and it provides $10 million to continue funding the Opportunity Scholarship and Lottery Scholarship which help New Mexicans pursue higher education.  

 

Healthcare 

HB 2 increases General Fund appropriations for Medicaid by $64 million, taking advantage of an enhanced federal match to cover more New Mexican families, and it increases the Department of Health budget by 3.4%.  

 

Tribes, Pueblos, and Nations

HB2 appropriates $13.4 million from the general fund for purposes of addressing tribal education needs like libraries, and indigenous education initiatives that provide cultural and linguistically relevant programming for Native American students. Additionally, HB2 provides $33 million in FY 22 Impact Aid to meet the needs of Native students.

 

Infrastructure

HB2 includes appropriations of $300 million for state and local roads and essential air service and $30 million for broadband infrastructure.

 

Having passed the House Floor in a 60-10 vote, House Bill 2 now goes to the Senate.

 

Members of the public can track legislation on the New Mexico Legislature website, access committee meetings, and House floor sessions via the Webcasts tab, or participate by Zoom to provide public comment on committee hearings. During the 2021 Legislative Session, the House of Representatives is focused on passing critical legislation while protecting the health and safety of the public, the staff, and the legislators. 

 

 

 

Detailed Budget Highlights

HB 2 Overview

The HAFC committee substitute for the General Appropriation Act, together with the feed bill, appropriates a total of $7.39 billion for FY22, an increase of 4.6 percent over the current budget year, with much of the $332 million increase used to restore general fund dollars to costs temporarily covered with federal funds. 

The HB2 sub is $33 million greater than the LFC recommendation. The financial summary shows FY22 ending General Fund balances of $1.76 billion, or almost 24 percent of the budget total.

Public Education

  • Total GF appropriation under HB2 for school support for FY22 is $3.39 billion, up $175 million, or 5.5% from FY21. 
  • HB 2 Provides $110 million for extended learning time programs, or 10 extra days for all grades K-12, and $120 million for K-5 plus programs, which provide an extra 25 days for all at-risk elementary schools. 
  • HB2 also eliminates credit for local revenue, notably Impact Aid. The substitute bill also includes $20 million to pay school districts for Impact Aid credits.
  • An additional $439 million in Federal stimulus will go to address school enrollment losses not covered by the formula. 
  • $20 million is also included for targeted funding to at-risk schools, $3 million for community schools, and an additional $20 million contingent on the passage of SB 341. 

Higher Education

  • HB2 increases GF support for higher education by $23 million, including the federal fund swap.
  • HB2 continues the Opportunity Scholarship program with $5 million in recurring funding. 
  • $5 million in a special appropriation will go to boost the Lottery Scholarship program and $1 million will go to mental health services.
  • General Fund transfers include $20 million for teacher affordability scholarships, $5 million for teacher loan repayment, and $15 million for college affordability scholarships.

Economic Recovery and Economic Development

  • The General Fund financial summary reflects $402 million for the economic relief measures within SB1, SB2 and HB11.
  • HB 2 invests $17.5 million for LEDA and $7 million for JTIP.
  • $5 million for tourism marketing.
  • $325 million from the General Fund will go to replenish the Unemployment Trust Fund with the passage of SB 377.
  • $25 million for member initiatives.

Infrastructure

  • Invests a total of $300 million for state and 10 local transportation programs.
  • The total amount for roads includes $170 million for critical state road projects, $121 million for local road projects, and $9 million for essential air service. 
  • $30 million for statewide broadband in SB377.
  • $12 million critical water litigation.

Health and Human Services

  • HB2 increases General Fund appropriations for Medicaid by $64 million. 
  • Appropriates $313 million for the Department of Health, an increase of $10 million or 3.4% over FY 21. 
  • Increased funding to the Developmental Disabilities Planning Council that is $700,000 above the LFC recommendation, in order to serve additional clients on the waitlist, and fund a special nonrecurring appropriation of $500,000 to provide professional guardianship services to income-eligible Developmentally Disabled adults.

Early Childhood

  • Appropriates a total of $22 million to expand pre-k, home visiting, and increased provider rates for the Family Infant Toddler program and child care workers.
  • Provides $2 million to support endowed positions for indigenous and bilingual educator positions at institutions of higher education.
  • HB 2 includes a $20 million transfer to replenish the Early Childhood Trust Fund, and $10 million in transfers to the fund from stranded Pre-K cash balances.

Public Safety

  • HB 2 appropriates $129 million to the Department of Public Safety.
  • Appropriation maintains 6% salary raises for police officers.
  • Includes special appropriation of $2.4 million for state police vehicles and body cameras.

Natural Resources

  • HB 2 protects our state’s fragile natural resources through a 3.6% increase to the Energy, Minerals and Natural Resources Department and NM Environment Department.
  • $12.7 million in special appropriations focused on clean-up, restoration and protection of NM lands, air, and drinking water, and includes a $5 million appropriation to continue remediation of the Carlsbad Brine Well.

Compensation

  • HB2 provides a 1.5% cost of living adjustment for all school, higher education and state agency employees, at a total cost of $64 million.

Special, Supplemental, and other Appropriations

  • One-time General Fund appropriations in Sections 5 and 6 total $119 million.
  • This includes $4 million for the State Fair, $6.6 million for a GSD health insurance shortfall, and $3 million for a special election in Congressional District 1.