| BUDGET BILL MOVES TO SENATE FLOOR – WITH STATE SPENDING AT ALL-TIME HIGH |
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| Every nook and cranny of state revenue has been emptied in preparing the $10.8 billion budget recommended by the Senate Finance Committee. To the credit of the committee, the spending increase has been contained to 6%, and reserves are maintained at a healthy 30% of recurring general fund spending. In addition, deposits have been made to various funds that are insurance against an economic downturn or reductions in federal spending.
Here’s a statistic that might blow you away – how much do you think all in spending in the state budget is when you factor in federal funds and manna from heaven? Pause, take a deep breath…$37.4 billion. In other words, for every dollar spent from the general fund, two more dollars magically flow into our coffers. Why is that so? Because we’re a poor state, and we get a ton of money from the feds for things like Medicaid, which the feds pay almost 75% of the costs. New Mexico has about 50% of its residents on Medicaid – most other states are in the mid 20s. And here’s another little fact that might surprise you: State employees have 80% of their health insurance premiums paid for by the state – sweet deal. They also earn vacation days while they’re on vacation. (The line forms on the left to apply for state employment – check out nm.gov.)
Here’s a summary of some of the Senate changes from the House version of the budget bill:
We’ll have more to report as we peel the pages on this 294-page opus. The bill will go to the Senate floor and then be returned to the House for concurrence in amendments. |
| FROM BAD TO WORSE…TAX PACKAGE WITH A $150M HIT SENT TO SENATE FLOOR |
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| Sometimes there are bad bills, and the committee process will make those bills better. Sometimes, though, bad bills become worse. That’s what happened today as the Senate Tax, Business and Transportation Committee approved House Bill 14 on a 6-4 party-line vote, Ds in favor, Rs opposed.
The bill is sponsored by Rep. Derrick J. Lente (D-Rio Arriba, Sandoval & San Juan), chair of the House Taxation and Revenue Committee, and his Senate committee chair counterpart, Sen. Carrie Hamblen (D-Doña Ana). While there are some good parts to the bill, the Chamber is opposed for one very simple reason: with $3 billion in new revenue this year, there is absolutely no reason why anyone, anywhere, anyhow should get a tax increase. In past sessions, HB 2 sets aside an amount of money to be used for tax reform or relief. There was no such set aside this year – bad planning on the part of the House Appropriations and Finance committee. So in a mad scramble to come up with something, new taxes are to be imposed on the oil and gas industry and on wholesale alcohol sales (a 20% increase). In total taxes will be raised almost $150 million because the Legislature blew the wad on a bunch of stuff and won’t fall back, reprioritize spending and make room for tax reductions. The bill as it came to the Senate from the House eliminates personal income tax for New Mexicans making up to $70,000. . An amendment passed today added several other beneficiaries of tax breaks, including:
Most of these are pretty darned good ideas. Nobody is going to argue against tax breaks for volunteer firefighters and foster parents. We should, however, be prioritizing those things that grow our economy and create more high-paying jobs. For example, we have a terrible health care crisis, and yet there’s virtually nothing in here to provide incentives to attract health care professionals to come to or stay in our state. What about a GRT exemption for all medical services, for example?
It’s a disappointing development in the 11th hour of the session. We’ll keep following it and let you know what happens. This bill goes to the Senate floor next, and if it passes there, goes back to the House for concurrence on the changes made today. Then it’s on to the governor for her pen. We wouldn’t be unhappy if she vetoed the whole thing and said, “Try again, only this time with no tax increases.” |
| SCHOOL LEADERSHIP TRAINING MOVES
FORWARD – IN SENATE, AND ON CALENDAR |
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| House Bill 157, sponsored by Reps. Joy Garratt (D-Bernalillo), Brian Baca (R-Valencia) and Raymundo Lara (D-Doña Ana), has as its goal achievement of nationally recognized best practices for principal (and superintendent) training, development and mentorship. A principal must lead a culture of learning, and with the right training and support, New Mexico can achieve a consistency of leadership. Turnover among principals is very high due to a number of factors, including lack of preparation for leadership and local support. Today, the bill was given a “do-pass” recommendation by the Senate Finance Committee, 6-4 along party lines.
The Chamber has long advocated for exactly this kind of change. Through a grant from the Thornburg and Los Alamos Laboratory foundations, the Chamber engaged Education Research and Development, a nationally recognized group of experts, to prepare a report on school leadership, and many of those recommendations are included in HB 157. Michael Dabrieo from the Los Alamos Laboratory foundation has done “yeoman’s work” this session on this bill. Thank you, Mike! Unfortunately, amendments added today effectively move the implementation of requirements for training and residency programs out so far into the future that it will do nothing between now and 2033. Purportedly, the impetus for the delay was to satisfy some legal concerns that truly need further examination before being taken at face value and acted upon. Next to teachers, student success depends on school leadership.
HB 157 now heads to the Senate floor. We appreciate the dedication of Rep. Joy Garratt (D-Bernalillo) who has worked with all of us on this bill. Perhaps half a loaf is better than none, but we’re interested in whether these vital changes can be made a lot sooner. There must be a way. |
| MEDICAID TRUST FUND BILL CONTINUES
ITS MARCH TOWARD THE HOUSE FLOOR |
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| With a full docket on Tuesday evening, the House Appropriations & Finance Committee continued to plow through bills and heard Senate Bill 88, Medicaid Trust Fund, sponsored by Sens. George Muñoz (D-Cibola, McKinley & San Juan), William Sharer (R-San Juan), Pat Woods (R-Curry, Harding, Quay & Union), Elizabeth “Liz” Stefanics (D-San Miguel, Santa Fe, Torrance & Valencia) and Rep. Pamelya Herndon (D-Bernalillo). The bill creates a new Medicaid trust fund, which would be seeded with a $300 million appropriation from the general fund. A Senate Finance Committee amendment to SB 88 adds a provision requiring money in the fund be appropriated to support the state Medicaid program if a reduction in federal Medicaid funding received by the state will cause a reduction in coverage or benefits below the levels provided as of the effective date of the act.
Herndon said there would be $300 million a year put into the fund until it gets to $2 billion, and then the state will stop putting money into it. This is when the fund starts to draw off of the interest and fund itself. She also introduced an amendment that strips a volatile funding source, state treasurer’s overnight investments, to avoid negative balances. The Greater Albuquerque Chamber of Commerce has supported the bill through the session, and tonight J.D. Bullington testified in support for the Chamber: “Having grown exponentially to the point where Medicaid is the second-largest demand on the general fund below public education, this bill, of course, aims at ensuring our state can sustain the Medicaid program regardless of whether or not there are federal reductions. We think this bill addresses what is likely to be a critical need, and the Greater Albuquerque Chamber of Commerce asks for your support.” Also in support were Think New Mexico, AARP New Mexico and the New Mexico Medical Society. There was no public opposition to the bill.
After some discussion from the committee members, Chairman Rep. Nathan Small (D-Doña Ana) thanked Herndon for being on the bill and said it has undergone a number of evolutions, which is the reason he is comfortable supporting it. “It’s clearly a big driving fiscal issue for us. … Because there were some ways that funding this that would have not worked. We’ve found a way that does work, and so I think (the bill) shows that there’s been pretty good collaboration.”
A motion was made for a “do-pass” vote as amended. The committee voted in favor, 14-1, sending the bill to the House floor. |
| STRATEGIC WATER RESERVE FUND CLEARS
ITS LAST COMMITTEE, HEADS TO HOUSE FLOOR |
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| Ending the long day of meetings Tuesday evening, the House Appropriations & Finance Committee’s final bill was Senate Bill 37, Strategic Water Reserve, sponsored by Rep. Liz Stefanics’ (D-San Miguel, Santa Fe, Torrance & Valencia) and Rep. Meredith A. Dixon (D-Bernalillo).
The bill creates a fund for the Strategic Water Reserve that is capped at $15 million. The catch on this bill is that it’s an empty vessel. It only establishes a fund, but it doesn’t fund it. Funding would come in future Legislatures. According to Stefanics, the bill does not appropriate any new money. It simply creates an account in which current or future appropriations can be deposited. The strategic water reserve, created by the Legislature in 2005, grants authority to the Office of the State Engineer and the Interstate Stream Commission to allow certain water rights to be designated for public use and allows the agency to acquire water rights to be held in the reserve. Currently, appropriations made to the strategic water reserve go to the Office of the State Engineer, with funds reverting to the general fund at the end of the fiscal year. Senate Bill 37 would add a non-reverting fund to supplement strategic water reserve functions. The Greater Albuquerque Chamber of Commerce supports this bill as it creates a way for water to be preserved. Joining the Chamber in support are Healthy Rivers at Western Resource Advocates, Think New Mexico, New Mexico Wild, Conservation Voters, Amigos Bravos, American Rivers, the Environmental Defense Fund and the Sierra Club. With little discussion, a motion was made for a “do pass,” which moved the bill to the House floor on a vote of 12-3. |
| GREEN COMMUNITY BENEFIT FUND MOVES TO
HOUSE FLOOR MINUS $340M APPROPRIATION |
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| This evening the House Appropriations & Finance Committee heard Senate Bill 48, Community Benefit Fund, sponsored by House Majority Floor Leader Reena Szczepanski (D-Santa Fe) and Senate President Pro Tempore Mimi Stewart (D-Bernalillo). The bill creates the Community Benefit Fund, which provides an overarching structure for funds to flow to communities in New Mexico to reduce pollution through state departments or existing grants within those departments. The bill also creates an overlay that involves community in the decision-making.
The Senate Finance Committee amended the bill to strike its $340 million appropriation. It moves forward with $210 million that’s included in House Bill 2, the budget bill.
Stewart said the bill has been through many iterations in its journey and getting $210 million is a start. She said the bill was created to help communities all over the state, and a study before the bill was being drafted found there are a half-billion dollars’ worth of projects that need the help. “The idea behind this bill is to be responsive to the community and to have the communities come to the state for these funds,” she explained.
The Greater Albuquerque Chamber of Commerce has voiced its opposition to the bill because it includes no prioritization or measurables and no way to determine outcomes – and thus no way to know if the taxpayers got their money’s worth. The Chamber believes that the bill is a prime candidate for interim study. Those in support of the bill include Samia Project, Somos un Pueblo Unido and Healthy Climate New Mexico.
Rep. Harlan Vincent (R-Lincoln & Otero) asked who would oversee the program. He was told it would be the Department of Finance Authority, which will issue a report every Dec. 1 to the Legislative Finance Committee.
Rep. Cathrynn N. Brown (R-Eddy & Lea) said at the end of the day when it’s all added up, the money won’t make a big impact in reducing emissions. “We are just a pinpoint on the globe, and we have jet streams and wind currents, so what we save in emissions, we will get it from somewhere else. There will be some tangible benefits. Maybe someone will get a really energy-efficient building out of this funding. At the end of the day, it is not going to be that measurable. I would rather focus on one or two things to do really well for the whole state.”
With a motion for a “do-pass” vote, the committee voted 9-6, sending the bill to the House floor. |
| REINCARNATED HOSPITAL MERGER BILL TRAVELS AT WARP SPEED TO SENATE FLOOR |
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| “Warp speed Scotty,” commanded Captain Kirk, and in a flash the starship Enterprise was off to where no man had gone before. Well, House Bill 586, a dummy bill sponsored by House Majority Leader Reena Szczepanski (D-Santa Fe), was yanked out of House Rules Committee, transformed by a House Judiciary Committee substitute dealing with regulating hospital mergers and acquisitions on March 12, given a “do-pass” recommendation on March 15, passed by the House on March 17, given a “do-pass” recommendation by the Senate tax, Business and Transportation Committee today and sent to the Senate floor. It’s an example of how fast a bill can be moved when the leadership of both chambers agrees to get something done (wouldn’t it be great if they did the same thing on the health care crisis?). In the local vernacular, this bill was “juiced.”
Szczepanski had co-authored Senate Bill 14 with Sen. Katy Duhigg (D-Bernalillo) that failed passage in the Senate Judiciary Committee. Reincarnated as HB 586, it’s blown by all the usual committee reviews and leapfrogged the process, apparently on the strength of amendments that removed many objections to SB 14. Whether this turns out to be a good idea or not, only time will tell. We’re skeptical that regulating hospital mergers is going to do much to increase access to doctors and other health care professionals. Health care compacts, health care loan repayments, medical malpractice reform and GRT exemptions on health care services would do a lot more. How about we “juice” those bills? |
| BILL THAT CLARIFIES HARM TO SELF AND OTHERS GETS A SPEEDY SECOND LIFE |
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| Sen. Antonio “Moe” Maestas (D-Bernalillo) sponsored Senate Bill 166, which sought to refine the definitions of “harm to self” and “harm to others” as a way of allowing judges to encourage, or when necessary, to mandate, behavioral health care for individuals posing a potential threat. The idea is to get people help rather than to cycle them through a night in jail or a hospital and put them back out on the street – the old revolving door. The bill easily cleared the Senate but was tabled in the House Health and Human Services Committee. Throughout this process, the Chamber supported the bill, including in the July special session. We were disappointed the bill was tabled.
Enter Senate Bill 510, an omnibus crime-fighting bill sponsored by Senate Minority Leader William Sharer (R-San Juan) back on Feb. 20. The bill was not seeing the light of day in the Senate Judiciary Committee until tonight, when a quickly assembled four-minute meeting substituted Maestas’ SB 166 into SB 510, and again, at warp speed, a bill is likely off to the Senate floor. Technically, it has a referral to the Senate Finance Committee, but we’re suspecting that will be eliminated quickly and the bill moved off the Senate floor and to the House. We’re also suspecting some kind of arrangement has been made with House leadership to get this bill quickly to the House floor and to the governor, as this is one of her top 10 crime bills she wants to see passed. And that would be a good thing, but it would have been better to have supported it all the way on that first run! |
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| AROUND THE ROUNDHOUSE |
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| Coming to Agreement – Conference Committees |
| As we get to the part of the session where bills are “crossing over,” i.e. being passed to the other house, it’s important to know what happens if a bill is amended in the “other” house. This always happens, for example, with the budget bill. The Senate adds its amendments to House Bill 2, reflecting expenditures that the Senate wants.
The bottom line is a bill cannot be sent to the governor for action until both houses have agreed to the same, identical version of the bill. Using the budget bill as an example, after the Senate passes the bill, it is then returned to the House for what is known as “concurrence in amendments”, i.e. determining whether the House will accept the Senate amendments. If the House concurs, then the bill is off to the governor.
Non-concurrence
However, if the House refuses to concur, the chief clerk notifies the Senate. The Senate is asked to “recede” from its amendments, i.e. withdraw its amendments. If it does not, then a conference committee is appointed to work out an agreement.
Each house has three members of the committee appointed by the Senate president pro tempore and the speaker of the House, respectively. Usually, this is two members from the majority party and one from the minority party. The “conferees” attempt to work out a solution. An agreement is reached only if at least two members from each chamber vote in favor. If agreement is reached, the “conference report” is sent to each chamber, which can only accept or reject the report. A conference report is just a newly amended version of the bill. If no agreement can be reached, such is reported to each house. New conferees might be appointed, or the legislation may just die for lack of agreement. |
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| SIGNING OFF FROM SANTA FE |
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| A tad dusty out there Tuesday? Inside the Roundhouse it was pretty much clear sailing for some pretty major pieces of legislation – the budget and tax package. That’s two of the big three that have been unveiled, with capital outlay coming next. As of today, that bill was still being drafted. Committees are beginning to wind down and will likely shut down on Thursday. Sessions on Thursday and Friday will be fast and furious, leading up to adjournment on Saturday, though we can expect some protracted debate from the Republicans to slow down unwanted legislation. Stand by for very late floor sessions.
Yesterday, March 18, was National Agriculture Day, honoring all those who put food on our tables and spare tires on our tummies. So as you start your day today, thank a farmer or rancher for the abundance we enjoy. And that will wrap it up for us tonight. We’ll be back with you later today. |
