“We’re in very tough times and we’re just hitting bottom - and we’re not going to get up soon,” said Rep. Henry “Kiki” Saavadra, D-Albuquerque and the sponsor of the bill.

For more than two hours, the House fought back and forth over the budget that is slimmed down to meet the state’s shrinking revenue. Republicans introduced a measure to cut the state budget 5.6 percent across the board, but it was defeated.

“As long as I’m chairman and I can find the money, I’m not going to cut,” Saavedra said during the debate.

“We want to make sure the pocket of the taxpayers is protected like the pocket book of the state is protected,” replied Rep. Keith Gardener, R-Roswell, ”We still have a $226 million deficit facing us in 2012.”

Shorty after the measure passed, Gov. Bill Richardson issued these comments in a news release:

“I commend the House for making tough choices and crafting a framework that gets us closer to a balanced budget. I appreciate the balanced approach taken by the House to rely on targeted spending cuts and new revenue to deal with the deficit. However, I continue to have reservations about tax increases that could hurt our efforts to create jobs. I look forward to working with the Senate as it deliberates over targeted spending cuts and revenue options.”

The measure now moves on to the Senate, where tax increases and light cuts are expected to fight an uphill battle.

In a letter sent July 27 to a prominent state lawmaker, Herrera says the $176,500 the Legislature has appropriated to her office in the past for a new campaign finance reporting system is simply not enough.

“We … wish to inform you that $176,500 is not an adequate amount of money for such an enormous task for our agency which indeed affects all candidates for state office, the citizens of the state and the media,” Herrera wrote state Rep. Henry “Kiki” Saavedra, D-Albuquerque, the chairman of the House Administration & Finance Committee.

“By comparison, in 2008 the Wyoming State Legislature in House Bill 3 appropriated $2.5 million for the development of their new Campaign Finance reporting system. Wyoming’s 2000 population was approximately 493,782, while New Mexico’s population was over 1.8 million.”

“With this information we are providing, we certainly appreciate your consideration and any effort that you would be able to make on our behalf in considering these numbers and the task which we (are) currently facing with extremely limited funding.”

Herrera’s request for money comes as her office has struggled in recent months to build its own campaign finance reporting system with an in-house developer. That project appears to be on hold after Herrera placed the developer on administrative leave in late June.

Agency officials have said it is unclear how much more work is required to complete the in-house campaign finance reporting system. And indications are the agency may opt to go another route.

The latest discussions by the agency, and other state officials, have included the Secretary of State’s Office purchasing a campaign finance reporting program from the state of Washington. Even if that purchase occurs, however, the program will must be customized to New Mexico, which will take money and time, Herrera’s deputy, Don Francisco Trujillo II, told state lawmakers recently.

Herrera has spent only a small portion off the $176,500 the Legislature appropriated to build the in-house campaign finance reporting system. Instead she tapped her office’s operating budget, her deputy, Trujillo told lawmakers.

In a short interview with the Independent on Monday, Herrera went out of her way to call on her critics, especially state Rep. Janice Arnold Jones, R-Albuquerque, to “help me get that money” to pay for a new campaign finance reporting system.

“She’s been the one speaking out,” Herrera said.

The agency’s unsuccessful efforts to build its own campaign finance reporting system burst into public view in late June when the office’s Web site and other computer-based services went down for several days.

An evaluation put together since then by the Legislative Finance Committee found that the Secretary of State’s Office lacked both the technical capability to manage information technology projects and a “viable disaster recovery” plan for its “mission critical” systems.

The courts on Monday were asked to settle a question raised about one of the budget fixes the Legislature passed during this year’s 60-day legislative session.

Specifically, unions representing 66,000 public employees, including state workers and school teachers, filed suit to stop increases to public employees’ contributions to pension plans expected to be into effect July 1, the Albuquerque Journal and the Santa Fe New Mexican report.

State lawmakers approved the increases, which will last two years, to save New Mexico as it navigates through bad times financially.

Both the state and state workers contribute into the pension funds. But by increasing what the employee contributes to the plan for two years, the state could decrease its contribution it pays in for each employee.

The organizations make the argument in the suit that the state is singling out public employees by imposing the increases — which will be applied against those individuals making more than $20,000 annually, the Journal reports.

But some lawmakers see the increases as a way of averting much worse fates for public employees.

“State employees and educators have to realize the Legislature is trying to save (them from) layoffs,” Albuquerque Journal reporter Dan Boyd quotes Rep. Henry “Kiki” Saavedra, chairman of the state House budget committee, as saying.

Here’s an excerpt from the Journal story:

Pension contribution hikes, which will last for two years, were crafted to save the state more than $80 million. A 1.5 percent employee contribution increase will be offset by a matching decrease in the state’s contribution.

The effect of the change varies by pay scale, but a state agency employee earning the average state salary of about $42,000 per year will take home $24 less per paycheck.

Starting next year, newly hired public employees in New Mexico will be able to retire with full benefits at any age after working for 30 years. The current time span is 25 years.

The unions claim there are other ways legislators could have plugged a $450 million gap in the state’s nearly $6 billion budget, such as revamping the state’s corporate income tax reporting requirements.

Support for the lawsuit was overwhelming among public employees, Arcy Baca, president of American Federation of State, County and Municipal Employees Local 477, tells the Journal.

Youtz said if an injunction is issued to stop the contribution increases the state will have to come up with the $80 million, Youtz said.

Youtz acknowledged in the Journal that the salaries and jobs of public employees could be at risk if the Legislature is forced to revise the state budget, but said such cuts wouldn’t be “necessary” or “appropriate.”

The measure signaled how dire the state’s budget situation is. But it also showed the art of the deal.

The bill freed up $94 million by scrapping brick-and-mortar projects around the state. Among those that lost all or part of their funding were domestic violence shelters, pre-K classrooms, health clinic improvements, a substance abuse facility in southern New Mexico and dozens of other plans like libraries and school gyms.

Escaping the carnage, meanwhile, was a proposed equestrian facility in Albuquerque — a project favored by Gov. Bill Richardson. An earlier version of the legislation had proposed cutting all of the facility’s funding — more than $20 million. And many senators, including Democrats, had favored cutting it all. But the final bill that the Senate passed Thursday only trimmed a little more than half the money for the facility, keeping more than $10 million in for it.

Richardson has argued that the center is an economic development project because it can host rodeo events and horse shows that will bring money and jobs to the state.

But not everyone believed him. Republicans tried to cut all of the equestrian facility’s funding while at the same time restoring $1.5 million for domestic violence facilities and the pre-K classrooms. But that amendment to the bill failed on a 16-26 vote.

The Senate then passed the underlying bill by a vote of 38 to 4.

That led to a harsh indictment from Sen. Rod Adair, R-Roswell, moments after the vote.

“Much of what we do in the Senate is indefensible,” Adair told the chamber, referring to the Senate’s decision to leave in money for the equestrian facility while cutting money for domestic violence shelters and pre-K classrooms.

It was a tense moment, of which there likely will be many more.

Lawmakers have spent the first two weeks of the 2009 session patching up this year’s $454 million shortfall. But now comes the really tough part: crafting a budget for fiscal 2010, which begins July 1. And next week may bring more bad news.

That’s when revenue projections for fiscal 2010 will be unveiled, and many state lawmakers in the know are expecting them to be worse than the projections released two months ago. Those past estimates projected revenues for next year to be about $293 million less than the spending in this year’s budget.

Senate President Pro Tem Tim Jennings, D-Roswell, alluded to that coming storm when he said from the Senate floor, “This is going to be the first cut of many,” referring to the brick-and-mortar cuts.

Jennings’ sentiment is common among state lawmakers.

“We feel we are in a down spin,” Rep. Henry “Kiki” Saavedra, D-Albuquerque, and chairman of the House Appropriations and Finance Committee, said Wednesday.

Speaking at the same press conference as Saavedra, House Speaker Ben Lujan, D-Santa Fe, said of next year’s budget: “We are hoping that we will not need to cut health care, and education and public safety … but it will be challenging.”

That’s why patching up this year’s budget was so important for the Legislature. It shrinks this year’s budget by $454 million and builds up the state’s reserves, said Rep. Luciano “Lucky” Varela, D-Santa Fe.

“We want to build up the reserves from 2009 so we can utilize some of those dollars in 2010 to make up the shortfall that we are having in terms of the revenues,” Varela said.

Lawmakers accomplished the pruning of this year’s budget through various measures.

In addition to passing the legislation that cut funding for brick-and-mortar projects, legislators passed a bill that transfers almost $56 million from a state reserve fund to cover personal income tax rebates approved last year. That bill also shifts money from cash balances of certain agencies and programs and moves it to the state’s main budget account.

Another measure sped up the schedule for estimated corporate income tax payments, providing about $65 million to the state this year, and yet another cut more than $100 million in spending in the current budget year.

The legislation approved yesterday now goes to Gov. Bill Richardson for his signature.