SANTA FE, N.M. (KRQE) – Democratic Gov. Michelle Lujan Grisham is recommending a 3.3% increase in state general fund spending in the coming fiscal year to devote more to public education and health and workplace safety programs, as authorities grapple with the economic hardships and mounting death toll of the pandemic.
The budget proposal presented Monday to the Legislature would boost general fund spending by $236 million to $7.3 billion for the fiscal year starting July 1, 2021. The Democrat-led Legislature convenes Jan. 19 for a 60-day session as New Mexico battles an unrelenting pandemic with major uncertainties about future economic recovery. Tight restrictions on public gatherings and nonessential business remain in place across most of the state.
At the same time, the state has reserves of roughly $2.5 billion at its disposal, and proposals are on the table this year to tap more money for education from the state’s $20 billion land grant permanent fund. “The pandemic and economic uncertainty thwarted our forward momentum in job creation, child well-being improvements,” Lujan Grisham said in a statement accompanying the draft budget. “But we are ready to bounce back quickly and robustly.”
Finance and Administration Secretary Debbie Romero said a one-time burst of spending worth $475 million also is recommended for pandemic relief, with details left to negotiations with the Legislature. There were no detailed public recommendations on spending those funds.
Lawmakers already enacted a $330 million relief package in November that provided $100 million in grants to thousands of small businesses, one-time $1,200 payments to unemployed workers and separate relief payments to immigrants without legal status in the country.
The goal in the coming fiscal year is to be responsive to hardships, Lujan Grisham senior adviser Dominic Gabello said. “We set aside a pot of money so that we’re flexible to what the Legislature is looking to do,” Gabello said. “This is a potential huge investment to support New Mexico families with one-time funds.”
The Legislature’s lead budget-writing committee make its budget recommendations public on Tuesday. In the executive recommendation, there are no blanket pay increases planned for state workers or teachers.
Major spending increases target three agencies at the forefront of reining in the pandemic — the departments of Health, Human Services and Environment — and include new funding for occupations safety oversight.
Roughly half of increased state spending would go toward annual public school support — a $128 million increase to $3.3 billion. School districts in New Mexico rely almost entirely on state government for funding.
The governor wants annual funding set at $80 million to extend the school year by five weeks at elementary schools that opt to cut summer vacations and pay teachers more. That funding went largely unspent last summer amid pandemic restrictions on classroom teaching.
Nearly all public schools remain in online-only mode, amid evidence of surging rates of failed classes and students that have gone missing from online studies.
The governor’s budget plan would expand free college tuition to more in-state students. Last year lawmakers set aside funding to offset tuition and fees for in-state students pursuing two-year associate degrees and certificates.
Romero highlighted a push to devote more state resources to mental health services and drug use disorders. And a new $5.1 million spending provision is aimed at curtailing suicide rates among young people. In 2018, New Mexico had the highest overall suicide rate of any state in the nation.
“The pandemic has affected people in a lot of different ways and we’re finding that it’s been affecting our youth specifically,” said Romero. “So we saw the need there.”
Romero said the budget plan aims to sustain financial reserves at 25% of annual general fund spending obligations — a crucial hedge against boom-and-bust cycles in the state’s oil-dependent economy.
Amid the pandemic, supplemental federal income support to the unemployed and more than $750 million in direct aid to state government has helped New Mexico sustain government spending and avoid layoffs or furloughs.
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