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Record $9.6B spending plan heads to New Mexico governor

New Mexico PBS

SANTA FE, N.M. (AP) — New Mexico's Democratic-led Legislature sent an annual spending plan Wednesday to Gov. Michelle Lujan Grisham for consideration that would increase annual general fund spending by 14% to underwrite tuition-free college, bolster rural rural health care networks and expand no-pay day care and prekindergarten.

The House concurred with recent Senate amendments to the record-setting $9.6 billion budget by a voice vote. The bill would increase general fund spending by nearly $1.2 billion for the fiscal year running from July 2023 through June 2024.

It passed despite objections from several House Republicans, who worried that the spending spree won't be sustainable in future years. Democratic Sen. Shannon Pinto of Tohatchi also voted no.

Separately, the Senate cast a final legislative vote to send a $2.2 billion list of construction projects to the governor for possible approval. Republicans in the Senate minority voted against that bill as they protested a $10 million provision from the governor to underwrite construction of a reproductive health care clinic in Las Cruces that would provide abortions.

Lujan Grisham can sign the bills without changes or use her line-item veto authority to reject any and all provisions. Those veto decisions typically are made over the course of weeks.

Democratic state Rep. Nathan Small of Las Cruces, the lead House budget negotiator, said he was comfortable with the proposed spending increase amid robust local oil production, and a $600 million deposit into a state permanent fund that expands opportunities for investment earnings to spend on future infrastructure projects.

“We are investing in education, we're investing in infrastructure,” Small said. “And we are saving more money than ever before.”

Republican state Rep. James Townsend of Artesia urged caution.

“This increased spending at these rates is very troubling to me, I don't think we can sustain it,” he said.

The budget proposal fulfills major initiatives sought by Lujan Grisham at the outset of a second term amid indications of faltering progress in public education in a state with high rates of childhood poverty.

General-fund spending on early childhood education, including home-visit counseling to parents of newborns, would increase by nearly $135 million – a nearly 70% boost.

Taxpayers will spend $145 million to fund tuition-free college for in-state students for the coming fiscal year amid rising student enrollment – and rising tuition rates that are set by governor-appointed regents. For the first time, tuition-free college would become a standard part of the annual budget process and state spending obligations in future years.

Public-sector employees in state government and education would receive a 6% average salary increase, after the consumer price index of inflation increased by roughly 6.5% in 2022.

The budget proposal includes the first salary increases since 2001 for statewide elected officials including the secretary of state, attorney general, state treasurer and state land commissioner who oversees natural resources leases on state trust land to help fund education. Those salaries would increase by as much as 70%, including a pay bump from $85,000 a year to about $145,000 for the secretary of state. The governor's salary won't change from $110,000.

Annual state general fund spending on Medicaid health care would increase by $246 million, or 21%. Much of the increase is devoted to increasing payment rates to physicians and other health care providers amid evidence of an aging and inadequate medical workforce.

Medicaid reimbursement rates are crucial benchmark for funding health care in New Mexico. More than 980,000 people -- or nearly 47% of the state population -- are enrolled in Medicaid health care for people living in poverty or on the cusp.

Separately, a bill aimed at lowering medical malpractice liability at independent health care facilities to ensure affordable insurance advanced on a 40-2 vote of the state Senate. Legislators say a state patient compensation fund will help ensure financial protection for medical patients who are harmed.

The state Senate was scheduled Wednesday to debate and possibly vote on a revised suite of proposed tax credits, cuts and rebates.

The Associated Press