I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
UPDATED: Senate spreads budget pain around
Public school teachers and state workers would pay more toward their retirement while several, but not all, state agencies would get fewer dollars next year under a state budget plan approved by a powerful Senate committee on Thursday.
Also roughly 250 more state jobs across state government would disappear than in a House-approved state budget plan that served as the starting point for the Senate proposal. Many of those targeted state government positions are already vacant, legislative officials said.
Reaction to the budget proposal approved by the Senate Finance Committee was swift Thursday.
Attorney General Gary King came out swinging, accusing the Senate Finance Committee of a political vendetta. He said in a statement released Thursday afternoon that the committee had proposed cutting his agency by $4 million and that it was punishment for the agency’s prosecutions of “politically well-connected individuals.”
The Attorney General’s office is in the middle of prosecuting Vincent “Smiley” Gallegos, a former state lawmaker and friend of House Speaker Ben Lujan, and former Secretary of State Rebecca Vigil-Giron.
“We believe that there are people who are affected by our investigation who have friends in the Legislature,” said Phil Sisneros, spokesman for Attorney General Gary King.
But legislative officials deflected the AG’s accusations, saying the Senate proposal doesn’t cut the Attorney General’s office by $4 million. Rather it proposes taking $4 million in general fund money and replaces it with $4 million from a consumer protection fund. The general fund is the state’s main account.
King would have discretion on how to spend that money, legislative officials said.
A spokesman for King, Phil Sisneros, insisted Thursday afternoon despite the replacement money that the Senate’s proposal would force the Attorney General’s office to curb political corruption prosecutions.
The Senate proposal is the latest plan produced by the Legislature as state lawmakers try to close a budget shortfall for next year estimated at several hundred million dollars.
Hours after the Senate Finance Committee approved the Senate budget proposal, legislative leaders from both the House and Senate converged on Sen. President Pro Tem Tim Jennings’s office for a quick meeting.
“It wasn’t a negotiation,” said Sen. John Arthur Smith, D-Deming, and Senate Finance Committee chairman. “We were just outlining our positions.”
The House and Senate must agree on a spending plan before they send it on to Gov. Bill Richardson for his signature. Lawmakers only have seven days left in this year’s regular legislative session to produce a state budget.
The Senate proposal differs in many ways from the House budget, including the size of proposed spending cuts and tax increases.
The Senate proposal recommends $150 million less in spending than the House proposal — $5.276 billion to $5.426 billion.
The Senate proposal also reduces by more than half the amount of new revenue the House approved to generate through tax increases, from $340 million to roughly $150 million.
The Senate accomplished this by replacing two House-approved tax increase proposals – a surtax on the state’s wealthiest residents and a half-penny increase on the state gross receipts tax – with a gross receipts tax on non-staple foods.
The battle over taxes has generated the greatest heat during the 30-day session. And the state budget discussions between the House and Senate may well hinge on how much to raise taxes – and what those taxes are.
Advocates who support taxing wealthier individuals and out-of-state corporations through what is called combined reporting reacted angrily to the Senate proposal.
The food tax “disproportionately discriminates against the poor,” said Allen Sanchez, a spokesman for the New Mexico Conference of Catholic Bishops. “Whole milk is taxed. Tortillas are taxed. Brown eggs are taxed. A person on a tight budget will go into a grocery store and buy the most inexpensive food. Most inexpensive food is taxed. It creates the most regressive tax in New Mexico history because it discriminates poor people.”
But some advocates that initially opposed re-imposing the gross receipts tax on food said this week that the narrower definition in the Senate proposal of taxing non-staple foods is “palatable.”
On the spending side, the Senate proposal recommends more cuts than the House.
Public education would get $53 million less than in the House proposal, according to budget handouts. Public education is the state’s biggest ticket item.
Both the Senate and House proposals, however, call for directing more dollars to public education than this year.
The House is proposing $2.319 billion compared to the Senate’s $2.268 billion. This year the state will spend just over $2.1 billion for public education because the Legislature trimmed education spending during an October special session dedicated to addressing the state’s sorry financial state.
Other agencies in the Senate proposal facing reductions from this year’s spending levels include the state Department of Health, at $10 million, and the state’s Children Youth and Families Department (CYFD). CYFD would see a decrease of $3 million.
New Mexico courts would experience a $2.6 million reduction.
Some agencies, however, would see funding increases under the Senate proposal. The Corrections department would get $2.5 million more. The state’s share of Medicaid – the government’s low-income health insurance program – would jump from $578 million to nearly $601 million, the handouts show.
State workers also would take a hit in the Senate proposal.
The Senate’s plan calls for teachers and state workers to contribute more to their retirement plans. Under the plan, employees would pay 1.6 percent more into their retirement plans. The state would stop paying that portion that the employees assume.
The 1.6 percent would be on top of the 1.5 percent more the state’s 66,000 public employees started paying last July 1.Representatives of state workers expressed anger at the Senate proposal, saying the state was turning to hard-working state workers rather than taxing the wealthy and out-of-state corporations.
The additional 1.6 percent in contributions employees would assume if the Senate proposal passed would save the state nearly $44 million, according to budget handouts.
“It’s very disappointing,” said Carter Bundy, political director of Council 18 of the American Federation of State County Municipal Employees. The budget proposal “continues to place the brunt of the financial crisis on educational employees and state workers.
Smith, the Senate Finance Committee chairman, said he sympathized with public employees and their complaints.
“I understand their bitching,” Smith said. “They have a legitimate complaint. We just don’t have the resources to hold them harmless.”
UPDATE: The Independent incorrectly reported that the Senate Finance Committee passed SB 10 on Thursday. SB 10 would tax non-staple foods. Instead the measure passed the committee on Friday. House bill 120, meanwhile, has been withdrawn, according to the Legislature’s website. That measure would have required companies to collect withholding tax on people who earn income in New Mexico but that the state can’t locate, according to a legislative analysis. The companies in question — called ‘pass through entities’ — would make quarterly withholding tax payments on net income distributed to their non-resident owners, according to the legislative analysis.