Court: Martinez veto went too far

SANTA FE, N.M. (AP) - The state Supreme Court has invalidated a veto by Republican Gov. Susana Martinez that reduced money for a housing agency.

The court said Wednesday it will issue a decision later in a challenge by lawmakers to a second veto that rejected a $128 million tax increase on businesses to pay for unemployment benefits.

The court said the governor exceeded her powers by lowering an appropriation in a budget bill from $150,000 to $50,000. She did that by striking the "1" from the $150,000. The money is for oversight of a housing program.

A lawyer for legislators argued that a governor can only veto an entire allocation of money - accepting all or nothing. A governor can't selectively change the amount as Martinez did, the court was told.

Earlier coverage by The Associated Press:

Democratic legislators asked the state's highest court on Wednesday to invalidate vetoes by Republican Gov. Susana Martinez that rejected a $128 million tax increase on businesses and scaled back money for a housing agency.

The state Supreme Court took the legal dispute under consideration after hearing arguments from lawyers for the legislators and the governor. The court could issue a decision later in the day.

Lawmakers want the higher taxes and larger amount of housing oversight money to take effect. Their lawyers told the court that the governor had overstepped her authority with the vetoes. The governor's lawyers argued that her vetoes were proper.

Attorney General Gary King, a Democrat, supported the 10 Democratic lawmakers in their legal challenge.

At issue are constitutional questions of how far a governor can go with vetoes in rejecting parts of legislation while allowing the overall bill to become law. The outcome of the case could establish new boundaries on the powers of future governors.

In one disputed veto, the governor rejected a tax increase on businesses that legislators approved to shore up a fund that pays unemployment benefits. However, Martinez accepted rollbacks in unemployment benefits for some jobless New Mexicans, and those are scheduled to take effect in July.

The unemployment program is projected to run out of money in early 2012, and the higher taxes were to take effect next January.

In the other veto, the governor lowered an appropriation in a budget bill from $150,000 to $50,000. She did that by striking the "1" from the $150,000. The money was to go to an agency for oversight of a state housing program.

The state Constitution allows line-item or partial vetoes in bills that appropriate money for specific programs or services. However, lawmakers contend the unemployment legislation didn't allocate any money - making the tax veto improper.

Lawyers for Martinez disagreed, saying the legislation does appropriate money by providing for the payment of unemployment benefits.

In the case of the housing money, a lawyer for legislators argued that a governor can only veto an entire allocation of money - accepting all or nothing. A governor can't selectively change the amount as Martinez did, the court was told.

"It is the exclusive province of the Legislature to set appropriations," said lawyer Shane Youtz.

If the court allows Martinez's veto, he said, she and future governors will have taken over a significant part of the Legislature's constitutional powers to decide how to allocate taxpayer money for different programs and services.

Martinez's lawyer, Jessica Hernandez, said the state Constitution grants broad powers to the governor by allowing vetoes of "parts" of appropriations, not just an entire line-item allocation of money.

"A part is a portion of a whole and that is what she vetoed," said Hernandez.

Previous New Mexico governors in the 1930s, `40s and in the `50s used partial vetoes to reduce appropriations, but those weren't challenged in court.