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New Mexico House endorses $1B state spending increase

A pedestrian exits the New Mexico state Capitol building amid winter weather on Wednesday, Feb. 15, 2023, in Santa Fe, N.M. A panel of New Mexico House lawmakers endorsed a $1 billion increase in annual state general fund spending to raise public salaries, shore up rural health care networks and expand no-pay day care and college. (AP Photo/Morgan Lee)
Morgan Lee/AP
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AP
A pedestrian exits the New Mexico state Capitol building amid winter weather on Wednesday, Feb. 15, 2023, in Santa Fe, N.M. A panel of New Mexico House lawmakers endorsed a $1 billion increase in annual state general fund spending to raise public salaries, shore up rural health care networks and expand no-pay day care and college. (AP Photo/Morgan Lee)

SANTA FE, N.M. (AP) — New Mexico's House of Representatives endorsed a 12% increase in annual state general fund spending Thursday, in a bill that would expand public support for early childhood education, shore up rural health care providers, and boost salaries and benefits for state workers and public school teachers.

The $9.4 billion spending plan for the fiscal year starting July 1 cleared the House on a 52-17 vote. The bill moves to the Senate for consideration and likely amendments. The Democratic-led Legislature has until March 18 to send a budget plan to Democratic Gov. Michelle Lujan Grisham.

The House-approved budget bill responds to an eventual economic transition away from fossil fuels in the nation’s No. 2 state for oil production, by investing up to $850 million in a trust to generate earnings and sustain public services in future decades.

The budget plan includes a separate $1 billion increase in infrastructure spending and leaves room for about $1.1 billion in possible tax reductions or rebates.

Lujan Grisham applauded the bill's approval but said she'll push to increase spending and remove limitation on funding for tuition-free college for in-state students.

The House-approved plan would increase annual K-12 spending by 8.6% and includes new investments in technical and vocational education programs. It proposes an 18% increase in spending on Medicaid that provides greater reimbursement rates to physicians and other health care providers amid complaints about shortages in access to medical care in rural communities.

The budget plan allocates $50 million to partnerships with private industry to advance energy projects.

An average pay increase of 5% for state employees and public school educators is included.

Public spending on day care and prekindergarten programs overseen by the Early Childhood Education and Care Department would increase by $135 million, or nearly 70%.

House Republican Minority Leader Ryan Lane said the bill would increase state spending at an alarming rate as New Mexico residents cope with inflation and increased costs for household energy.