Commentary: Santa Fe, NM – Today, the Senate passed Senate Bills 1 and 2 to help fill the state’s budget gap and leave our state with a responsible level of reserves.
Senate Bill 1 by Senator Carlos Cisneros allows the Board of Finance to issue up to $81.4 million of 217 non-recurring supplemental severance tax bond capacity and appropriates the proceeds to the general fund. Additionally, the bill transfers approximately $19 billion in cash balances from certain funds to the general fund, including $5 million from the capital buildings repair funds.
The bill uses one-time, non-recurring funds to close the budget gap. While the bill is an attempt from the Legislature to compromise with the Governor, concern was shared by Senators on both sides of the aisle that using bond money for operational purposes is not a responsible long-term solution for our state’s financial challenges.
“Senate Bill 1 was a necessary but uncomfortable measure to ensure that our state can continue to operate and provide the services that our families depend on,” said Senator Carlos Cisneros. “While we meet the letter of the constitution and leave a balanced budget, with this measure alone we still fall short of leaving the state with the necessary reserves to maintain our bond rating.”
Senate Bill 2 by Senator Clemente Sanchez represents a responsible step by the Senate to leave the General Fund with a reasonable level of reserves needed to prevent our credit rating from a receiving a second downgrade. The package of new recurring revenue would raise an additional $84 million dollars for the state’s reserves.
“We must do the responsible thing for both our districts and our entire state,” said Senator Clemente Sanchez. “That means raising the recurring revenue necessary to protect our bond rating that determines what it costs for our state, schools, and local communities to borrow money for critical projects. I am proud that the Senate answered that call to act prudently by passing a package that will help local communities repair their roads, creates jobs, and above all helps end the practice of putting band-aid solutions on our long-term financial problems.”
Senate Bill 1 passed the Senate by a vote 38 to 3 and Senate Bill 2 passed by a vote of 25-16.