NM Gov. Martinez signs budget, vetoes taxes
May 26, 2017 10:16 PM
ALBUQUERQUE, N.M. -- It's official. New Mexico has a balanced budget to keep the state government running. Gov. Susana Martinez on Friday acted on all of the bills that the Legislature sent to her desk.
However, this does not mean New Mexico is in the best financial condition. Democratic lawmakers say the reserves are now dangerously low. They passed through two bills that created new revenue with taxes, but Martinez vetoed any new taxes.
It took two days in the special session for lawmakers in the House and the Senate to pass through four bills. Democratic lawmakers say they gave Martinez some of what she asked for, and she signed those into law.
House Bill 1 restores funding to colleges and universities all across New Mexico. It also funds the state legislature.
But lawmakers also took the gamble on pushing through new tax legislation that Martinez vowed to veto. Friday afternoon, she did what she said she'd do. The governor vetoed all of Senate Bill 2, a 5 cent gas tax among other fee increases.
She also line-item vetoed parts of House Bill 2, ripping out the internet sales tax and the tax on hospitals.
"I have given my word to the people of New Mexico that I will not increase taxes," Martinez said.
House and Senate Democrats say her vetoes of new revenue now put the state reserves at dangerous levels. They estimate it at less than a half a percent. Lawmakers say it should sit at about 5 percent or at $300 million for a good credit rating.
"I think the reaction for the people of New Mexico should be extreme frustration," House Speaker Brian Egolf said.
Sen. John Arthur Smith, D-Deming, fears the bonding houses will swiftly downgrade New Mexico hurting us when we need to borrow money.
"Then it rests on the back of the fourth floor to explain why they were not responsible," he said, referring to the floor in the Roundhouse where the governor's office is located.
Martinez said the state has a good amount in the reserves based on the other bill she signed Friday, moving money that would have paid for capital outlay projects into the General Fund.
"There will be money put into the reserves based off of the pork that the legislature is not spending, so it's about $71 million that goes into the reserves to shore up the reserves and our ratings so that they're in good condition," she said.
"We are plugging a dam with one-time money which means we're going to be right back here in January with another massive problem for the next year's fiscal budget," countered Senate Majority Leader Peter Wirth.
Lawmakers reconvene on Tuesday in the Roundhouse. Senate Democrats say every option is on the table. That means they could try to get enough votes to override her vetoes on the tax measures. It's not likely they'll have the necessary two-thirds majority.
They can also just adjourn since the state does have a balanced budget for this fiscal year. But as Wirth said, they'll be back with another big challenge next year.
Here are the governor's executive messages with the legislation she acted on:
- Click here to read the governor's message on signing House Bill 1 -- supplemental general appropriations
- Click here to read the governor's message on signing House Bill 2 -- tax, fund and distribution changes
- Click here to read the governor's message on signing Senate Bill 1 -- severance tax bond project changes
- Click here to read the governor's message on vetoing Senate Bill 2 -- tax changes
Martinez also issued the following statement on her decisions:
"I've long said that budgets are about priorities, and this package is no different. I'm pleased to sign this bipartisan agreement on our budget that funds our colleges, universities and legislature. It also enacts my plan to invest more money in cancer treatment and research and help more New Mexicans go to college – while dipping into legislative retirement accounts and pork projects.
“It restrains government spending to live within our means - as our families do every day – and puts us back on track toward rebuilding healthy cash reserves by consolidating available cash in various government accounts.
“However, I'm disappointed lawmakers once again tried to take the easy way out with hundreds of millions in tax increases that would've made it more expensive for New Mexicans to live, work and raise a family – while increasing their own budget.
“I've vetoed these tax hikes -- along with their budget increase -- because New Mexicans expect their leaders to roll up their sleeves and find actual solutions, not take the easy way out by raising taxes anytime there's a problem. The right thing to have done is pass true comprehensive tax reform that allows families to keep more of what they earn.
“I spoke with the Speaker of the House yesterday and he said he was open to acting on comprehensive tax reform this year. I'm optimistic, and I’ve signed funding for a study to comb through every loophole of our tax code. I've been very clear with legislative leaders: The people of New Mexico will be watching to see if this becomes another government study that gets filed away only to collect dust. New Mexicans deserve action.
“Moving forward, I'll keep fighting to fix our broken tax code to help New Mexicans keep more of what they earn, allow more businesses to grow and create jobs, and make New Mexico even more competitive.”
Updated: May 26, 2017 10:16 PM
Created: May 26, 2017 04:54 PM
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