New Mexico lawmakers hash out record spending plan of $9.6 billion

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New Mexico lawmakers have tapped into a financial windfall linked to robust oil and natural gas production to craft a nearly $9.6 billion state budget that includes record-high spending, but some lawmakers are concerned that such spending isn't sustainable.

The proposal cleared the Senate late Sunday but not before tweaks were made by a key committee to restore funding that had been cut earlier in the process.

The chairman of the Senate Finance Committee said he tried to be transparent in his handling of the spending bill while it worked its way through the chamber, and he was among those suggesting the state could be in for another roller coaster ride of dramatic spending increases followed by painful cuts.

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"New Mexico had better be prepared in our future for the plateauing of oil and gas, and that’s not too many years away," said Sen. George Muñoz of Gallup, the committee chairman.

Democratic Sen. Shannon Pinto of Tohatchi joined all 15 Republican senators in voting against the proposed budget. It now goes back to the House to consider the Senate’s changes.

Some senators said the last minute changes were necessary to ensure Democratic Gov. Michelle Lujan Grisham would sign the budget.

Michelle Lujan Grisham, governor of New Mexico, speaks during a conversation on Oct. 25, 2022. Grisham would have to sign the $9.6 billion state budget plan once lawmakers clear the proposal.  (Sam Wasson/Bloomberg via Getty Images)

Those changes included revised language for how roughly $250 million should be spent to extend New Mexico’s public school calendar. Another item restored $2 million for the Department of Game and Fish to protect threatened species.

Republican Sen. Pat Woods called the Senate vote the culmination of "some of the worst policymaking in this state’s history."

"Our booming energy industry gave us an opportunity to make a generational difference in this state. Instead, the Legislature has caved to the political will of the governor and those who have her ear," he said in a statement.

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Some Democrats also voiced frustration. Democratic Sen. Bill Soules of Las Cruces said more could have been done to fund programs aimed at preventing child abuse at a time when the state is seeing a financial windfall.

As it stands, the budget would provide average 6% salary increases for state workers and teachers. It also would appropriate $100 million in one-time funding for recruiting law enforcement officers.

The governor and lawmakers had entered the 60-day session with similar spending plans. Key disagreements then surfaced, with those areas centering on funding levels for child care assistance programs and a tuition-free college scholarship program that has been championed by Lujan Grisham.

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In the House, lawmakers on Sunday endorsed a package that includes $500 tax rebates for each filer. The measure, which needs Senate approval, also calls for income tax cuts and reducing the gross receipts tax paid by shoppers.

Republican Rep. Jason Harper of Rio Rancho and six of his GOP colleagues joined with the Democratic majority in voting for the measure. Harper said the size of the tax package was significant.

"We’ve never seen something like this before," he said. "This is really an opportunity to do some great things."