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New Mexico legislative panel warns of revenue uncertainty, proposes more money for education

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ALBUQUERQUE, New Mexico — Education and child welfare initiatives would get more money under a budget proposal released Friday by a New Mexico legislative committee, but lawmakers warned that overall spending next year could be curtailed if oil prices continue to fall.

The plan from the Legislative Finance Committee would increase spending in New Mexico by more than $140 million next year, with an additional $71 million for public schools and another $25 million for expanding early childhood initiatives.

The budget proposal forms the foundation for the Legislature's spending decisions when lawmakers convene for a 60-day session on Jan. 20.

Republican Gov. Susana Martinez has yet to release her spending recommendations. But Martinez spokesman Enrique Knell said Friday that she was optimistic common ground could be reached on spending for education reforms, child welfare and safety and job creation.

Lawmakers described their recommendations as a starting point and warned that the drop in oil prices has resulted in uncertainty about how much the state will actually have to spend in the next fiscal year, which begins in July.

A forecast released in December showed $141 million in new revenue was expected for spending increases in the next budget year. That's half of what officials estimated in August.

A $1 change in oil prices causes a $7.5 million change in revenue for the state's main budget account, officials said.

PHOTO: Sen. John Arthur Smith, a D-Deming who is chairman of the Senate Finance Committee, discusses legislative budget recommendations during a news conference in Santa Fe, N.M., on Friday, Jan. 9, 2015. While the state expects to have new revenues to spend next year, Smith cautioned that dropping oil prices have made it difficult to project exactly how much that will be. (AP Photo/Susan Montoya Bryan)
Sen. John Arthur Smith, a D-Deming who is chairman of the Senate Finance Committee, discusses legislative budget recommendations during a news conference in Santa Fe, N.M., on Friday, Jan. 9, 2015. While the state expects to have new revenues to spend next year, Smith cautioned that dropping oil prices have made it difficult to project exactly how much that will be. (AP Photo/Susan Montoya Bryan)

Sen. John Arthur Smith, a Deming Democrat and chairman of the Senate Finance Committee, said lawmakers have already asked the budget staff to prepare models that would reflect at least a 1 percent decline in revenues.

"We want to be prepared rather than sorry," Smith said. "It's not pleasant when our revenues are anemic to begin with. But the good thing is we think we can see our way clear this fiscal year, and we also think we're going to be able to move ahead and fund critical initiatives."

The committee proposed spending nearly $6.3 billion next fiscal year on public education and government programs, including courts, prisons and health care for the needy.

That would include more funding for at-risk students, money for school districts to implement dropout and truancy-prevention programs and more than $30 million for salary increases for educators through the state's three-tiered licensure system.

As for the roughly $260 million for early childhood education, lawmakers said prekindergarten programs could be expanded along with early literacy efforts. There's also funding for extending the school year for students from kindergarten to third grade in an effort to narrow the achievement gap when it comes to literacy and math.

The bipartisan contingent of lawmakers who unveiled the recommendations Friday said the state has almost doubled its investment in early childhood initiatives during the last four years.

Another $3.5 million is included for additional caseworkers within the state Children, Youth and Families Department, which has been hampered by staffing shortages and overwhelming caseloads. The budget proposal also includes funding for child advocacy and family support service centers around the state.

Minority Floor Leader Sen. Stuart Ingle, R-Portales, said there's still room for lawmakers to set priorities and for revenue projections to change. He described the budget process as a bowl of Jell-O that's far from solidifying.

"Right now, it's anybody's guess as to where this is going to end up. It's truly a guess," he said.

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