Proposed pay raises beefed up after new forecast

Updated $6.32 billion budget proposal sails through House committee on unanimous vote

By Andrew Oxford
The New Mexican
Posted 1/28/18

Teachers and state employees might get a bigger raise than legislators and Gov. Susana Martinez originally proposed.

Following a brighter financial forecast for the state, the House Appropriations …

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Proposed pay raises beefed up after new forecast

Updated $6.32 billion budget proposal sails through House committee on unanimous vote

Posted

Teachers and state employees might get a bigger raise than legislators and Gov. Susana Martinez originally proposed.

Following a brighter financial forecast for the state, the House Appropriations and Finance Committee on Saturday (Jan. 27) approved a $6.32 billion budget proposal that calls for increasing the size of raises for civil servants.

It also would add more money for prosecutors, public defenders and economic development programs.

The budget would amount to a 3.9 percent increase over this year and is largely in line with what the Republican governor has recommended.

The committee's unanimous vote contrasted sharply with the partisan split that emerged amid efforts to fix a budget shortfall last year. But it is also just one step in a process that has a long way to go as the legislative session enters its last two weeks.

Economists told the Legislature on Thursday (Jan. 25) that the state could expect more revenue than was anticipated for the fiscal year that begins in July, boosting the budget by $93 million.

An improving oil and gas industry is responsible for the brighter outlook. The same forecast added some $158 million in expected revenue for the fiscal year that ends in June.

Based on older projections, the governor had proposed a 1 percent increase in pay for state employees and 2 percent for teachers.

Budget writers in the Legislature had proposed a 1.5 percent raise across the board and to raise the minimum salaries for teachers.

The draft budget approved Saturday calls for a 2 percent raise for state employees. Public safety staff such as state police, corrections officers, parole officers and prosecutors would get an additional 4.5 percent. Court staff, social workers and nurses would get an additional 2.5 percent. Teachers would get an extra 0.5 percent.

Rep. Patricia Lundstrom, a Democrat from Gallup who chairs the House Appropriations and Finance Committee, said the bigger raises are targeted to recruit workers in fields where there is high turnover or there are large numbers of vacancies.

The budget proposal approved Saturday also gives a bigger boost – a total of 11.6 percent – to the Children, Youth and Families Department. That includes $25 million for child care programs, child protective services and programs to prevent domestic violence.

Some of what lawmakers refer to as "new money" will go not to expanding programs but to shoring up accounts legislators raided in recent years to balance the budget.

For example, the budget proposal approved Saturday would provide $3 million for the Secretary of State's Office, which legislators have tapped in recent years to the extent of leaving it short of cash needed to run elections and provide public financing for certain campaigns.

Other provisions of the updated budget proposal might raise eyebrows.

One is $10 million for Spaceport America to build a new hangar. State officials hope the Spaceport can become a tourist draw.

There is also funding to give statewide elected officials, including the governor, secretary of state and commissioner of public lands, a 10 percent raise.

Legislative aides say the pay for those positions has not increased since 2002. But any raise for statewide elected officials would require separate legislative approval, not just a line in the budget.

Under the new projections and the budget proposal approved Saturday, the state will have about 10.2 percent in reserves, or $646 million.

Economists credit a boom in the state's oil industry marked by rising prices and hearty business in the Permian Basin.

Many legislators argue the state's continued reliance on oil and gas demands that they raise reserves back into double digits. They depleted emergency funds in recent years when prices for those commodities cratered.

"We want a strong reserve at 10 percent or higher," Lundstrom said. "... It's our savings account. If something drastic was to happen, we would have a very strong savings account."

The governor's initial budget proposal also called for reserves of about 10 percent.

But advocates for public education might push to put more of that money into schools. And tax reform advocates could take the state's improved financial picture as a sign that the time is right to rework New Mexico's tax code, with the reserves providing room to maneuver should any changes cut revenue.

Martinez hinted during her State of the State address at the possibility of issuing rebates to taxpayers – something not done since the years of her predecessor, Democrat Bill Richardson.

The rebates became controversial, however, coming ahead of what would be a financial crisis for the nation and state.

A spokeswoman for Martinez did not rule out the idea when asked about rebates Friday.

"As the governor said in the State of the State, she's open to efforts that return dollars from the surplus back to the taxpayers," spokeswoman Emilee Cantrell said in an email.

The proposed budget heads next to the floor of the House of Representatives, where Lundstrom says it will get a vote Wednesday. If it clears the full chamber – and it is virtually assured to do so – the proposed budget will go to the Senate Finance Committee at the start of February.

The session ends at noon Feb. 15.

Contact Andrew Oxford at 505-986-3093 or aoxford@sfnewmexican­.com. Follow him on Twitter @andrewboxford.

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