New Mexico governor signs budget amid coronavirus worries

March 11, 2020 GMT

SANTA FE, N.M. (AP) — New Mexico Gov. Michelle Lujan Grisham trimmed $100 million in infrastructure projects as she signed a $7.6 billion annual general fund budget Wednesday that makes major new investments in public education.

The second-year Democratic governor announced line-item vetoes of proposed general fund spending on construction projects as a precaution against economic uncertainty surrounding the coronavirus and slumping world oil prices. The oil sector is a mainstay of the state economy and government income.

The state spending bill for the fiscal year starting July 1 increases salaries across state government and at public schools by an average of 4% and puts an initial $17 million toward the governor’s initiative to eventually provide tuition-free college for in-state students. Overall general fund spending would increase by 7.5%.

In a statement, the governor said the slightly trimmed budget strikes a balance by “investing in the transformative changes that New Mexico needs while ensuring financial stability in the event of an economic downturn.”

At a news conference Wednesday, the governor confirmed that three people have tested positive for coronavirus in New Mexico — the state’s first confirmed infections. She declared a public health emergency that allows state agencies to take emergency measures to rein in the spread of the virus and secure necessary supplies, equipment and personnel.

Vetoes this year free up $150 million to bolster financial reserves that swelled to $1.8 billion in mid-2019 amid record breaking oil production in southeastern New Mexico, where advanced drilling techniques have unlocked vast petroleum resources within the Permian Basin. The reserves provide a cushion to sustain government operations in the event of an oil-sector bust, sustained economic downturn or both.

The governor signed off on a $217 million increase in funding to public schools — a 7% increase. Public education accounts for nearly half of annual state general fund spending in New Mexico.

This marks the second year of major increases in school funding since a state district judge ruled that New Mexico was failing to meet constitutional obligations to provide an adequate education to poor, minority students and those living with disabilities.

The governor on Monday vetoed nearly $50 million in local transportation infrastructure projects that mostly would have improved roadways.

On Wednesday, she also vetoed a bill to shore up the state’s Retiree Health Care Authority with increased contributions from taxpayers and workers — and a one-time infusion of cash. The authority underwrites health benefits for about 64,000 retired state and local government workers before they reach the age of Medicare eligibility. At the same time, the governor signed off on a $58 million infusion to help shore up the public pension fund for retired state and local government workers.

Republicans in the House minority voted in unison against the budget bill as an unsustainable expansion of state spending. Some argued for a rebate instead to taxpayers.

The governor’s office highlighted approved new spending of $15.4 million for initiatives to better treat drug addiction and mental health problems.

It expects to expand Medicaid enrollment with a $405 million increase in state and federal matching funds. The budget bill increases spending on individuals with development disabilities by $20 million.