SANTA FE, N.M. (AP) — New Mexico’s Legislature approved a record-setting $1 billion annual budget increase Wednesday to bolster spending on public schools, Medicaid, public safety initiatives and an array of grants, loans and tax breaks to private industry.
The Senate approved the bill by voice vote with no indication of opposition to endorse a roughly $8.48 billion general fund spending plan for the fiscal year starting on July 1 — a 14% increase over current-year spending.
The spending plan now moves to the desk of Democratic Gov. Michelle Lujan Grisham, who supports major provisions and can veto any part of the spending plan.
Separately, the state Senate advanced a half-billion package of tax rebates, cuts and credits to a decisive House floor debate, along with package of crime-fighting initiatives. The Legislature has until noon Thursday to approve legislation before adjourning.
The budget builds on a windfall in state government income from surging oil production and federal pandemic aid.
Salary increases of at least 7% are slated for school district and state government staff across the state, with a minimum hourly wage of $15 for public employees and higher base salaries for teachers.
Annual spending on K-12 public education would increase by $425 million to $3.87 billion, a 12% boost. Annual Medicaid spending would increase by roughly $240 million to $1.3 billion as the federal government winds down pandemic-related subsidies to the program that gives free health care to the impoverished.
In a state with high rates of poverty, the proposal extends free college tuition to most New Mexico residents pursuing two- and four-year degrees, and it fully funds home-based care for thousands of people who have had severe disabilities since childhood.
Amid a record-setting spate of homicides in Albuquerque, the budget would underwrite new intervention programs aimed at curbing gun violence and boost salaries for state police by nearly 16% — with even higher increases for judges.
Legislators extended pregnancy-related Medicaid coverage for a year afterbirths, up from two months, by spending $14 million. Most births in New Mexico are covered by Medicaid.
The budget bill funds an initiative from the governor to establish a training academy for the film industry run by a consortium of existing state colleges and universities. It also provides $650,000 to found a climate change bureau as the state expands the regulation of greenhouse gas emissions.
Senate lawmakers endorsed a tax relief package Thursday on a 39-0 vote that would offer a personal income tax rebate of $250 for individuals or $500 for joint filers, at a cost of more than $300 million.
Democratic state Rep. Christine Chandler of Los Alamos, a proponent of modest tax relief, warned that those rebates could contribute to inflationary trends.
“This amount … pumped into the economy at this point in time could easily add to the inflationary trends that we are in right now, in one fell swoop,” she told a lead Senate budget committee.
The tax relief package would slightly reduce gross receipts taxes on sales and services, eliminate taxes on Social Security income for individuals earning $100,000 or less, and provide a per-child tax credit of up to $175 to parents.
A package of crime-fighting initiatives received Senate approval late Wednesday night on a 41-0 vote, sending the bill to the House for consideration.
The initiative includes efforts to expand police training and oversight, with funding for alternatives to traditional prosecution and incarceration. New Mexico would overhaul police training and oversight, hire more state district judges, and enhance criminal penalties for threatening a judge and for certain felons in possession of a firearm.
Legislators have balked at proposals to ban pretrial release for people accused of some serious crimes. The crime bill instead expands surveillance of criminal defendants as they await trial, with 24-hour monitoring of ankle-bracelet tracking devices.
On teacher pay, legislators approved a measure to allow Indigenous language teachers to be paid at the same rate as their peers, even if they don’t have an undergraduate degree. Bills sent to the governor earlier this week would increase teacher pay between 7% and 22%. For Native American language teachers paid as teaching assistants in many districts, their salaries could triple.
Lujan Grisham is expected to sign all of the teacher pay measures.
House members also gave final approval in a 51-17 vote to send a free college bill to the governor. It would allocate $75 million to the “opportunity scholarship” program, providing free tuition and fees for New Mexico residents.
Unlike the existing lottery scholarship, it would be open to adults long after high school graduation and could be used for part-time course loads.
In consumer protection efforts, legislators sent a bill to governor’s desk Wednesday that caps annual interest rates on storefront loans at 36%, down from 175%.
In a concession to profitability, a fee of 5% can be charged on loans of up to $500, and the maximum size of an installment loan is doubled to $10,000.