Governor signs $7.4B budget bill
Lujan Grisham vetoes $1B in federal pandemic aid pending guidance on how it can be spent
Gov. Michelle Lujan Grisham used her executive powers Friday to lineitem veto over $1 billion in one-time expenditures for fiscal year 2022 that would have been covered by expected federal pandemic aid from the American Rescue Plan.
Tripp Stelnicki, a spokesman for the governor, said, “The money is still there. We still have it, but we can’t appropriate it until we get guidance from the federal government. As soon as we get guidance, we’ll get it out the door.”
The veto did not affect the $7.4 billion budget for fiscal year 2022, which was approved by the Legislature and signed Friday by Lujan Grisham.
Still, agencies and programs anticipating the federal dollars to fill gaps — Medicaid ($50 million), road projects ($200 million) and the state’s Legislative Lottery Scholarship ($100 million) — will have to wait for allocations.
Another $600 million in federal aid was earmarked for the state’s unemployment insurance fund, which has been relying mostly on federal loans since September to remain solvent.
With over 100,000 New Mexicans receiving unemployment benefits, the debt has added up to about $235 million.
Stelnicki said Lujan Grisham is “fully committed to fully restoring” the unemployment insurance fund. To start
with, he said, Senate Bill 377, which the governor signed, includes $300 million for the fund.
The state has ample time to allocate money from the American Recovery Plan. The deadline is the end of 2024.
What remains in question is which branch of government ultimately will control those funds — the executive or the Legislature?
Stelnicki said the governor can appropriate the money as soon as she receives federal guidance.
Sen. Pat Woods, R-Broadview — one of two Republican senators who voted in support of the budget bill on the Senate floor — laughed when he heard the governor had vetoed the federal money.
“Isn’t that something?” Woods said by phone Friday evening. “We were trying our best to keep that legislative power in the budget so we would have a say-so in how that federal money is being spent.
“When is it the Legislature’s power to appropriate money for the state? I imagine that battle is yet to come a little harder,” he added.
Democratic state Rep. Patty Lundstrom of Gallup, chairwoman of the House Appropriations and Finance Committee, said the Legislature could appropriate those funds during the 2022 legislative session.
If Lujan Grisham does decide to appropriate some of the federal money before the next regular session, Lundstrom said, “I will be very interested to see what uses she will put that federal money toward that we did not already talk about.”
Lujan Grisham called the state budget for the next fiscal year a “solid and sustainable” spending plan that allows New Mexico’s reserves to remain at robust levels.
The budget increases spending over the current fiscal year budget by 5 percent, with $3.3 billion dedicated to the public school system. That’s about 45 percent of the overall budget, and it includes a $183 million increase in per-student funding for schools.
The budget funds 1.5 percent raises for state employees, including public school and college personnel.
It also has $300 million for road improvements, $30.7 million to support mental health and substance abuse initiatives through the state Human Services Department, and $12 million in new spending for college tuition programs.
“This budget is responsible and responsive to the needs of New Mexicans right now and in the future,” the governor said in a news release issued by her office.
“This legislative season has been a remarkable success for New Mexicans in every corner of our state,” Lujan Grisham said, noting there is nearly $1 billion in funding for pandemic relief for businesses and workers. She also lauded initiatives in economic development, health care and environmental protection.
Lujan Grisham also signed House Bill 285 on Friday, allocating $511 million in capital outlay for projects across the state. The bill includes $12.5 million for Local Economic Development Act projects, $52 million for tribes, $49 million for higher education and almost $48 million for public safety needs.
Friday was the deadline for Lujan
Grisham to sign legislation approved during the regular session, which ended March 20. The Democratic governor signed the vast majority of the nearly 160 bills that came to her desk from an overwhelmingly Democratic Legislature.
She did, however, veto a few bills:
◆ House Bill 25 would have required the Legislative Education Study Committee, which focuses on the public education system, to begin studying the higher education system as well. The governor said it’s not a good use of the committee’s time.
◆ House Bill 92 would have increased fees for public water systems. The governor wrote in her veto message it would be an “onerous” increase on New Mexicans struggling to survive the coronavirus pandemic.
◆ House Bill 103 would have increased fees in the Utility Operator Certificate Act. The governor said those operators provide “vital services” and should not have to pay more in fees for tests and reviews.
◆ House Bill 196 would have removed the state Mortgage Finance Authority from its role overseeing regional housing matters. The governor said the agency is “best positioned” to do that job.
◆ House Bill 240 would have amended the guidelines of the Hospital Fund Act and allowed tax revenue generated from mill levies to be used for emergency health care facilities in qualifying counties. The governor said only Valencia County would qualify and that the fund was not set up for that purpose.
◆ House Bill 287 would have required the social services division of the Public Schools Task Force to conduct an analysis to find gaps in social services in public schools. The governor said the Public Education Department can do the work.
◆ Senate Bill 131 would have altered the way the state distributes funds for public school improvements. The governor said the legislation had “substantial issues.”
◆ Senate Bill 242 would have made changes to the Citizens Substitute Care Review Act, which affects the monitoring of children in state custody. The governor said the bill had no appropriation and the sponsors had not consulted with Native American communities for guidance.
◆ Senate Bill 285 would have limited the authority of emergency medical responders to transport a patient for an emergency mental health evaluation without a court order. The governor said the language of the bill would limit responders more than the measure intended.
◆ Senate Bill 328 would have repealed the six-year limitation on water and sanitation gross receipts tax, allowing it to go on. The governor said the voter-approved measures should be left in the hands of voters.
◆ Senate Bill 341 would have removed the Public Education Department’s right to distribute grants from the community school fund unless authorized by the Legislature. The governor said that added “unnecessary limits” on the initiative.
◆ Senate Bill 375 would have changed the makeup of the New Mexico Law Enforcement Academy Board by eliminating several members, including two citizen members. The governor said the board needs the citizen oversight.