SANTA FE, N.M. — A slate of deficit reduction measures has cleared its first major hurdle in the New Mexico Legislature as the state wrestles with how to close a major budget shortfall.
The Democrat-led Senate adjourned after quickly approving a series of budget balancing proposals that would shrink state agency spending, sweep together idle dollars from government and school district accounts, delay pending tax cuts and rein in tax breaks.
That left efforts to balance the state general fund budget Saturday in the hands of the Republican-controlled House, where attention has dwelled on criminal justice initiatives backed by Republican Gov. Susana Martinez — including a bid to reinstate the death penalty.
The House on Saturday approved a proposal for mandatory life sentences for people convicted of intentional child abuse resulting in death, regardless of a child’s age, by a 61-1 vote.
The bill would expand “Brianna’s Law” to cover the deaths of children up to 17 years of age. The current law addresses children 11 and under. The existing statute is named after a 5-month-old who died in 2002 after being sexually assaulted.
New Mexico finished the budget year in June with a $131 million deficit after exhausting operating reserves, and has a projected budget shortfall for the current year of $458 million if budget changes are not made.
The House recessed Saturday afternoon and is scheduled to return to work at 9 a.m. Sunday
Rep. Paul Bandy, R-Aztec, likened budget negotiations between the House and Senate to a tennis game. “Now it is up to us to return the serve,” he said.
New Mexico’s credit rating is under review by a major credit rating agency for a possible downgrade that would increase borrowing costs. Moody’s Investor Services says the review will focus in part on the state’s actions to replenish operating reserves.
Left intact, the Senate budget package would restore operating reserves to $89 million. Reserves stood at $713 million in mid-2015, before a plunge in state oil and natural gas prices that has rippled through the state economy and government coffers.
House Republican leaders said they are likely to revise Senate-proposed spending cuts to agencies overseeing public education, public safety and child welfare.
Rep. Jason Harper of Rio Rancho, the Republican chairman of the House ways and means committee, said he’ll oppose Senate plans to freeze ongoing reductions to corporate income taxes and increase tax collections on internet commerce. He believes those measures would discourage business investments.
“There are lots of things in the tax package that need more than a night to review and that we have serious problems with,” he said.
Republican House majority leader Nate Gentry of Albuquerque lambasted Senate Democrats for adjourning without considering initiatives for stricter criminal sentencing, describing a groundswell of public concern about violent crime. The Senate must return no later than Thursday if the House continues to work.
“It’s extremely disrespectful,” he said.
Democratic Sen. John Arthur Smith, an architect of budget compromises within the Senate, accused Republicans in the House of electioneering on crime issues amid a state budget crisis. “We’re very close to writing hot checks in the state of New Mexico,” he said.
The entire Legislature is up for re-election in November, with campaign fundraising suspended during the special legislative session.
Elements of the Senate solvency package include:
—Authorization to shore up the state’s general fund with $219 million in settlement money from major tobacco companies that might otherwise be spent on smoking cessation and public health programs.
—Spending cuts of $175 million from state agency budgets. Reductions of 1.5 percent are proposed for the departments of Public Safety and Children, Youth and Families — while preserving spending on child protective service and early childhood development. Cuts of 3 percent were planned for the judiciary, and 5 percent at the Higher Education Department. No new cuts were proposed for Medicaid health care for the poor and disabled.
—New restrictions on a tax credit for businesses that create high-wage jobs and a $24 million cap on annual payouts.
—Reclaiming $90 million that had been earmarked for local capital spending projects.
—Removal of limits on the number of marijuana plants that can be cultivated by licensed medical cannabis suppliers, in an effort to increase gross receipts taxes.
—A one-time transfer of $77 million in cash balances from a long list of accounts at state agencies and oversight boards. Idle funds in local school board accounts also would be swept into the state general fund.