Commentary: Santa Fe- New Mexico has been in a budget crisis for the past two years. This session, legislators worked diligently and made tough decisions to create and pass a balanced budget which keeps spending levels largely flat. Legislators met their Constitutional duty and sent the $6.1 billion dollar balanced budget to the governor on the day before the session ended. The budget and companion bills included:
· the start of much needed tax reform to broaden the tax base in an effort to lower tax rates in the future;
· the creation of a “rainy day fund” from future oil and gas tax surpluses so the state is in a better position to face budget challenges when there is volatility from oil and gas revenues in the future;
· the restoration of $46.1 million in funding to schools cash balances that were swept away earlier in the session.
During the 60 day session, which ended at noon on March 18, many significant pieces of legislation were introduced and debated. Because of limited state funding, many bills which require funding were not considered this session.
In addition to the budget and companion bills, some of the bills that passed each chamber and are going or have gone to the governor’s desk for action include:
· Editor's NOTE: Governor will not accept: Raising the state minimum wage in SB 386 in stages to $9.00 from $7.50 by April 2018, with a 60 day $8.00 training wage. October- $8.25, April 2018- $9.00. Tipped employees to $2.63 from $2.13. (Three of Four largest cities have higher wages, Santa Fe-$11.09)
· Governor able to call up National Guard to fight potential cyberattacks w/out declaring an emergency
· Broadband expansion- SB 24 provides for local gov’t broadband development- vetoed
· Using SUVs instead of school buses on smaller school routes
· Authority & $250K to address hazards of possible huge sinkhole in Carlsbad
· Conditions to transfer earned credits between high ed. institutions
· Seamless school transfers of students who have had disruptions in their education
· More at risk students eligible for K-3 Plus program, broader eligibility
· Deputies to have sheriff powers when sheriff office is vacant
· Used sick leave to not count against teacher evaluations was vetoed, attempted override passed in Senate, failed in House 36 to 31.
· Expand E-911 surcharge to include internet based phone service- to Gov.
· Granting a local option to impose fuel tax increase within their jurisdiction
· Conversion Therapy ban to attempt to change sexual preference
· Repeal some ag fees
· Ethics Commission- political equity, protect minority rights of commission membership. Conference Committee adopted- goes to Voters in 2018
· Penalty for not moving over for tow trucks with hazards on side of road
· Computer classes as math credit- governor vetoed (but veto questionable since made outside 3-day window.)
· Remove unnecessary fees on pharmacists to help mom and pop pharmacies in NM to continue to serve communities.
· Installment loan fee limits & literacy fund
· Additional Agency Info to State Auditor
One of the most talked about bills died when the House Judiciary committee failed to give it a hearing even though it was on the calendar to be heard the day before the session ended. Senator Cliff Pirtle’s Daylight Saving Time as permanent time- passed Senate, but was not heard in the House committee.
Major bills that did not pass include*:
Tapping into Permanent Fund*-
Legalizing marijuana
Stopped attempts to reinstate food tax
Stopped late voter registration
Mandatory 3rd grade reading
Industrial hemp research studies- Vetoed (veto questionable because of timing.)
Cigarette tax increase
Liquor tax increase to drug court, DWI fund
Reinstate Death Penalty
Ban non concealed firearms in Capitol
The status of the legislation that was introduced can be found in the Legislature’s Bill Finder. * (Directions to Bill Finder are listed at the end * of this news release.)
It was acknowledged that sacrifices are having to be made throughout state government and throughout the state during these challenging economic times. Revenue coming into state coffers has fallen dramatically, due largely to low oil and gas prices.
A goal of the budget was to avoid additional cuts to public schools; to avoid furloughs; and layoffs of state employees. It was also critical to shore up the state’s nearly depleted reserves in an effort to protect the state’s credit rating.
Tax Reform
A companion bill HB 191aa , among other things, requires the Revenue Stabilization and Tax Policy Committee to continue studying tax reform and make recommendations to the legislature. The reforms to be studied include:
· the effects of reducing pyramiding of the gross receipts tax on taxpayers
· how repealing certain exemptions and deductions for some businesses will effect revenues
Senate Minority Leader Stuart Ingle made these comments on the budget and companion bill that passed the Senate on Saturday, March 11, 2017. He acknowledged these critically challenging financial times in the state:
“By the actions we are taking, we are maintaining a responsible form of government that will continue to operate in the state in a smooth fashion. These were difficult decisions we made as best as we could as we continue to be faced with severe financial challenges. We have sent the governor a package of bills that balanced the budget and give a small reserve cushion.
These tough decisions are simply what we needed to do to keep the state operating for the sake of the people we represent. Without revenue nothing can happen, when the State Treasurer says the state cannot issue any more checks, difficult decisions have to be made, we stood up and we made them.”
The Senate voted 33 to 8 on HACHB 2&3/a, and the Senate voted 34 to 4 on Sub for HB 202/aa.
Since the November election, Democrats in the Democratically controlled Senate gained more control. The 42-member State Senate has 26 Democrats and 16 Republicans. In the House, the November election affected the control of the House with Republicans not retaining their leadership. The Democrats have control of the House, as well. The 70-member House includes 37 Democrats and 33 Republicans.
Highlights of the $6.1 billion include:
· $20.3 million decrease in total appropriations for fiscal year 2018 starting in July compared with fiscal year 2017
· FY 18 recurring appropriations for K-12 public schools totaled $2.7 billion, an increase of $13.1 million over FY 17. The Senate increased spending for early reading initiatives and targeted education reforms.
· 2.5% increase for the judicial branch to pay for salaries, compensate jurors, etc.
· 1% cut to state universities, colleges, specialty schools
· Legal fees of $1 million for the Public Education Department; $700,000 for the state engineer and attorney general for water rights lawsuits; $700,000 in costs related to a lawsuit over food-stamp eligibility.
· Appropriated $10 million to the Job Training Incentive Program (JTIP) and $7 million to the Local Economic Development Act (LEDA).
· General Fund appropriation for FY 18 for Medicaid match totals $916 million, about the same as FY 17. FY 18 spending for the Medicaid program is expected to total about $5.2 billion including federal and other funds.
· $2 million for private prison contracts, inmate medical care and to handle a larger prison population.
· $750,000 for increasing payment and credit card security at the Department of Finance and Administration.
· $150,000 to conduct a statewide inventory of buildings and property for a master plan.
· Companion revenue measure: HB 202
· $250 million in new fees, revenue enhancements:
· Extend sales tax to all online, large out of state retailers: $20 million
· Level the playing field for certain health care taxes and adjust deduction rate: $111.6 million in increased general fund revenue
· Redirect legislative retirement distributions $0.9 million to general fund reserves, then to Judicial retirement if reserves are 5%
· Ten cents a gallon gasoline tax increase: $44.9 million Five cents on diesel: $13.1 million to Tax Stabilization Reserve to build reserves to 5%, then for local road projects.
· Weight-distance permit fee increased from $5.50 to $50.00 per year for heavy trucks.
· Motor Vehicle Excise tax increase 1%, from 3 to 4 %: $49.2 million to reserves.
· Temporarily de-earmark Petroleum Products Loading Fee and divert to Tax Stabilization Reserve until Reserves total 5% then the revenue reverts to the Corrective Action Fund.
· Temporarily delay on-going reduction of Corporate Income Tax for two years: $12.7 million per year.
· $77 million in estimated reserves by the end of FY17, just 1.3 percent of the budget. If the revenue package is adopted, that can increase to more than 3 percent for 2018. $190 million total, to boost reserves to protect the state’s credit rating and provide for revenue shortfalls and cash flow needs.
HB 191aa
Severance Tax Funds, Other Funds, Capital Outlay
There are also Severance Tax Bonds (STB) totally $62 million and $10 million from other funds totaling $72 million. $46.1 of the STBs will be put in the general fund for various public schools, to in effect, make up for the money that was swept out of their cash balance funds earlier in the session. The remaining $26 million in STBs and other funds will go to what are called statewide projects including state road improvements, public schools, Game and Fish Hatchery from Game and Fish funds and improvements and for on-going maintenance of state facilities. These are in SFC Sub for SB 462 bill which passed Friday.
The governor has until April 7, to take action on the legislation and the budget and revenue bills. The governor can sign the bills, veto them, do nothing and they will be considered pocket-vetoed or with the money bills or appropriations bills, the governor is also able to cross out or line-out specific lines in the bills the governor wants to remove.
Other significant pieces of legislation were introduced and debated. Please find the final action in the Bill Finder.*
· Daylight Saving Time as permanent time- passed Senate, was not heard in H Judiciary – failed in House Judiciary Committee
· Tap into Permanent Fund for early childhood education- Failed in Sen. Rules.
· Outlaw so-called coyote-killing contests- passed S, to full House
· Make it legal to cultivate hemp so researchers could study industrial uses – Governor vetoed- (Veto questionable since vetoed after 3 day limit.)
· Marijuana penalties reduced
· Legalize recreational marijuana- not passed
· Ban late term abortion- not passed
· Parental notification-not passed
· Make illegal conversion therapy- passed
· Prohibit e-cigarettes in many public places
· Constitutional Amendment to create an Ethics Commission- passed
· Ban on open guns in state capitol. Passed S, H failed
· To remove guns in domestic violence restraining orders- to Gov
· HJR- tap into the corpus of the permanent fund by increasing distribution from 5 to 6% for early Childhood- not passed
· Attempts to repeal food tax- not passed
· Prevent law enforcement from enforcing federal immigration laws and turn state into sanctuary state
· Open primaries to unaffiliated, independent voters
· Payday loan caps
· 30 day deadline to test rape evidence kits
· Shield Rape victim names
· Expand broadband internet to underserved rural areas
· Shorten school day or school year
· Governor veto bill to allow teachers to take up to ten days of sick leave without affecting their teacher evaluations.
· Increase scholarships from lottery scholarship program by removing 30% mandate
· Require NM to develop anti-bullying policies
· Allow all registered voters to participate in primaries by choosing to affiliate with a party by requesting a ballot
· Allow people to register up until the weekend prior to election-killed
· Major tax reform
· Reinstate Death Penalty
· Extend solar market tax credit
· Prevent employers from demanding credit checks with applications
· Increase liquor tax temporarily to go to local DWI programs, drug courts
· Increase cigarette tax by doubling rate to raise $89 million.
· Require background checks for buying firearms online or at gun shows-tabled
· Legislators wait one year before returning as lobbyist, unless hold advocacy job
· Lottery to give fixed in scholarship amounts, not mandated 30%-Passed S
· New disclosure requirements for nonprofits, unions, bus. involved in elections
· Reduce penalties for marijuana
· Court to order someone to give up firearms in cases of domestic abuse
· Capital outlay reform, currently $978 million unspent for 2500 projects
· End of life legislation for terminally ill
· 3rd Grade reading bill
· Changes to whistleblower protection act
· Creating an interagency pharmaceutical purchasing council to save $100 m
· Anti bullying
· Film tax credit increase from $50 m to $53m
· DWI sentencing
· Shield Rape victims names
· University police jurisdiction
· Rape kit deadlines
· Airbnb taxes- Short term occupancy tax-passed
Republican Senators introduced a number of interesting bills including, many did not pass in the Democratically controlled Senate and House- Bills to :
· Additional Agency Info to State Auditor- to Gov.
· Ban drones flying by critical facilities
· Abortion notification bill- failed
· Using Sheriffs as magistrate security- passed S
· Palliative Care- more encompassing for the terminally ill-Passed S
· Bill to replenish school cash balances-HB 191
· More choice for vets for free licenses- Passed S, H
· School flexibility
· Background check for concealed carry permit to include retired officers, Passed S
· Vetoed performance evaluations not to include ten days of sick leave (overrode in Senate 34-7.)
· Notice to military bases of tall construction projects in flight paths- Passed S
· Analyze economic impact on endangered species list-
· Tougher penalties if child abuse in intentional- failed
· Make luring a child a felony- failed
· Allow businesses to have option of offering uncorking service- passed S, failed H
· Comprehensive jobs and tax bill-
· Protect rural drinking water
· Transfer credits between colleges to be seamless- passed S, H
· Help at risk students at more schools in K-3+ program- Passed S, H
· Attract new doctors by repaying more medical school loans- Passed S
· Attract more nurses by helping to repay nursing school loans- Passed S
· Allow highest ranking deputy sheriff to exercise power of sheriff when there is a vacancy- companion passed S, H
· Address hazards of possible sink hole in Carlsbad- Passed S, H in budget
· Protection of insured made clearer in code
· Ban certain pharmacy fees-Passed S
· All potential 911 callers to pay 911 fee-Passed S, H
· National Guard to attack cyber attack threats
· Permanent Daylight Savings Time- Passed S, killed in H Judiciary
· Restrict food stamps for nutritional food not junk food-SPA killed
· Stop mislabeling non milk products as milk
· Require an Ag regent at NMSU
· Make public how governor spends contingency fund- passed Senate 37-2
· More disclosures to state auditor of investment decisions
· No cells in cells
· Major tax reform
· Increase DWI fees
· Move over and slow down for hazard lights
· Recreation aviation license plate
· Tax internet sales
· Beef up beef council
· Call Livestock Board if property is over-run with wild horses- failed in H
· Serve New Mexico produce to New Mexican school children
· Auctioneers don't need brokers licenses
· Require state programs to prove & report on effectiveness prior to funding Passed S
· Allow cities to get a loan from Tax & Rev Dept. if gross receipts fall too much
· Ban on open guns in capitol
The session started with First two days, Senate approved $262 million package of solvency bills aimed at plugging a state budget deficit. Courts needed additional funding of over half a million dollars to carry the justice system through mid- April. School districts had cash in their reserves removed to fund other parts of state government were restored in HB 191.
In a Special Session in October of last year, funding at most state departments was cut, including public education.
*FIND BILL FINDER:
Legislative Website https://www.nmlegis.gov
Across the top click “Legislation”
5th item down is “Bill Finder”
Scroll down to
6th item is:
List by last date acted on:
15th item is:
“List passed by Senate”
Click
Click GO
Then find the list!
14th item is
“List passed by House”
“16th item is- “ Passed by Both House and Senate”