By Michael Gerstein, Santa Fe New Mexican
Jan. 7, 2020

The Legislative Finance Committee — which plays a substantial role in shaping the state budget — on Tuesday recommended a spending plan that’s largely in line with Gov. Michelle Lujan Grisham’s recommendations but sets up a potential showdown over funding college tuition scholarships and early childhood programs.

Helmed by fiscally conservative Sen. John Arthur Smith, D-Deming, the committee recommends a 6.5 percent increase in spending rather than the 8.4 percent increase the governor called for a day earlier. The Legislative Finance Committee’s $7.54 billion recommendation for fiscal year 2021 and Lujan Grisham’s $7.68 billion spending plan will serve as reference points during budget negotiations in the 30-day legislative session that begins this month.

While the committee’s spending plan is not substantially different from the governor’s, Smith noted there likely will be some debate around higher education spending after Lujan Grisham proposed a plan to offer scholarships to cover the cost of two- and four-year college degrees for New Mexico residents regardless of income.

Lujan Grisham’s recommendation includes $35 million for her proposed Opportunity Scholarship, which would help eliminate tuition and fees for New Mexicans attending public community colleges and universities.

More debate could center on child care assistance for parents working or in school.

Although the Legislative Finance Committee recommends $5 million more than the $320 million the governor is pushing this year for an early education trust fund, lawmakers’ current plan calls for about 21.7 percent less state funding for the new Early Childhood Education and Care Department than the governor has asked for. It is a roughly $53.4 million difference — a significant portion of the $132 million overall difference between the two budget plans.

James Jimenez, executive director of New Mexico Voices for Children, criticized the difference in a statement.

“Despite knowing how important early childhood programs are for children’s healthy development and success, the LFC proposal continues to short-change the ECCE programs that give all New Mexico children the chance to reach their full potential,” Jimenez said.

The Legislative Finance Committee also proposed a 3 percent pay increase for teachers and school employees, compared to the governor’s proposal of a 4 percent boost for teachers and 3 percent for other state workers.

The committee is calling for a $210.5 million increase for public schools; $1.5 million more for early childhood workforce development; $5 million more for privately operated prekindergarten programs, along with an $8 million increase for pre-K in public schools.

The plan also calls for an 8 percent increase, or $227.8 million, from the general fund for the Children, Youth and Families Department; a 4.4 percent increase, or $45 million, for the state Medicaid program; and a state budget surplus of about 25 percent, the same amount called for by the governor.

Another $410 million would be set aside for endowments, including $325 million for an early childhood services fund, $10 million for a college affordability fund and $5 million for a rural library endowment fund.

Smith noted during a news conference Tuesday morning that the oil and gas industry is to thank for the state’s current surplus.

But, he said, because the business of fossil fuels is volatile, lawmakers have a duty to stash money away for future budget cycles rather than spend it all in one year.

“I do believe that the executive branch and the legislative branch will be able to find a middle ground that will be beneficial to the entire state of New Mexico, and I don’t anticipate the push and pull that’s happened at the federal level,” Smith said.

Committee Vice Chairwoman Patricia Lundstrom, D-Gallup, called it a “responsible budget” and a good “starting point” for lawmakers set to begin budget talks after Jan. 21.

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