DALLAS – While preparing for potentially harder times ahead, New Mexico will operate under the first budget in five years that reduces overall spending.
In her signing message for the $6.2 billion spending plan, Gov. Susana Martinez detailed nearly 40 line-item vetoes that reduced legislative proposals by about $1.8 million and outlined plans in the event revenues fall even further.
“The oil and gas price challenge we face is a serious issue, and given the instability in the world right now, there is very little consensus about when energy prices might stabilize and rise again,” Martinez wrote. “As we weather this storm together, however, I am encouraged because we have overcome several fiscal challenges in the past five years.”
House Bill 2 contains most of the budget provisions reducing spending in the current fiscal year by $31 million.
Martinez said she sought to preserve funding for education, public safety agencies, and Medicaid. Under the spending plan, state police officers, correctional officers, and some teachers will receive raises.
Medicaid spending will increase by about $20.8 million, but the increase is not expected to be enough to keep up with enrollment growth for the joint federal-state health care program. That translates to a cut in provider rates for doctors and hospitals.
Funding for state colleges and universities will be reduced by $19.6 million under the budget, and other agencies will also face cuts.
Martinez also reduced allotments for the final four months of the current budget year. That move is expected to save the state about $31 million.
The governor also signed a separate bill that takes nearly $130 million from various government accounts, mostly for the coming budget year, to help bolster spending and reduce the need for deeper cuts.
“I have vetoed language that would trigger indiscriminate across-the-board spending cuts in fiscal year 2017 if the revenue we take in plus all allowable transfers from reserves is below the appropriations contained in this budget,” Martinez said.
“In the event our fiscal picture takes such a starkly negative turn, across-the-board cuts would be both unwise and likely insufficient, and I believe the more responsible approach would be for the Legislature and Executive to work together on a more targeted plan to reduce spending – in some cases, substantially – where it makes the most sense and has the least amount of harm to public health and public safety.”
