Budget compromise urged
Smith warns of cuts to schools, Medicaid
Key senator says Medicaid, education cuts likely without revenue increases
SANTA FE — A day after the New Mexico House signed off on a $6.1 billion spending bill and a tax package to help pay for it, the top budget guru in the Senate called for cool heads and compromise to resolve a looming stalemate between Gov. Susana Martinez and the Democratic-controlled Legislature.
But Senate Finance Committee Chairman John Arthur Smith, D-Deming, also warned that additional spending cuts on public schools and Medicaid will likely have to be enacted without increased state revenues for the fiscal year that starts in July — via tax increases or another source.
“The compromise is going to have to come from the legislative branch and the executive branch,” Smith said Thursday on the Senate floor. “That’s a two-way street.”
Martinez, the state’s two-term Republican governor, has vowed to veto any tax increases approved by the Legislature, though the Governor’s Office recently signaled she is open to closing tax “loopholes.”
In a Thursday statement, a Martinez spokesman gave a blunt response to Smith’s comments on the Senate floor.
“If Sen. Smith wants to compromise, then he shouldn’t raise taxes,” Martinez spokesman Michael Lonergan said.
For his part, Smith has voiced opposition to some of Martinez’s budget-balancing proposals, including requiring state workers to pay more into their retirement accounts so the state could put in less, describing them as temporary fixes to the state’s ongoing budget crunch.
“I’m looking for a sustained fix,” Smith said Thursday. “Anything short of that would not be responsible.”
As is typical in the Legislature’s budget process, Smith said the Senate Finance Committee will likely come up with amendments to the House-approved budget bill in the coming weeks.
The amended bill would then have to be approved in the committee, before advancing to the full Senate.
What’s less clear is how the Senate will handle the House’s tax package, which would generate an estimated $265 million next year by increasing the excise tax on vehicle sales, requiring out-of-state online retailers to collect tax from customers, imposing a higher fee on commercial trucks, and more.
Senate committees have already advanced several tax proposals, such as a $1.50-per-pack increase in the cigarette tax rate, a gas tax hike and an internet sales proposal, but none of those bills has made it to the Senate floor yet.
Meanwhile, some Capitol insiders have already expressed concern about the possibility of a special legislative session being called if no budget deal is reached.
The 60-day session ends March 18, and the state Constitution requires a balanced budget.