Shortfall remains as session nears end

SANTA FE (KRQE) – If lawmakers haven't agreed on how to balance the state's budget by Thursday at noon, they will have to return to Santa Fe on Monday for a special session.

The state faces a $600 million deficit and that means budget cuts and new taxes. The two branches of the state legislature currently disagree on those two points.

Late Wednesday afternoon a House committee unanimously tabled the food tax, killing the Senate bill in that form for now.

There's always drama during the weaning hours of the legislative session, but the atmosphere was filled with concern, confusion and defection on Wednesday.

House Democrats are split on one of the most basic needs, voiding stalled infrastructure improvement projects.

Gathering up that money would raise the state reserves from less than 1 percent to more than 4 percent.

The state needs the money to write checks and preserve its bond rating.

Two Democratic defections in committee are preventing that from moving forward.

Democratic leadership is reportedly mad, but Republicans are singing the same tune, 'No new taxes, until waste is eliminated.'

"I, as a legislator, don't feel it's right to raise taxes when internally we really can't tell you that's going on," Rep. Jane E. Powdrell-Culbert, R-Corrales, said.

"I just don't make bets. I have no idea what's going to happen, but I think that people are working very hard to try to make sure we pass a balanced budget that protects all New Mexicans," Rep. Al Park, D-Albuquerque, said.

The negotiations among Democratic leadership are behind closed doors.

The Senate's plan:

• 2 ½ percent cut to state agencies.
• $180 million tax hike by changing the food tax so only healthy foods are tax-free and spiking the cigarette tax by a one dollar for a year.

The House's plan:

• 1 percent cut to state agencies.
• $300 million in new taxes, mostly through a half-cent gross receipts tax increase and a surtax on the wealthy.