Lawmakers finished an election-year legislative session on Thursday that was dominated by a clash of political wills between Republican Gov. Susana Martinez and Democrats controlling the Legislature. 

Key parts of the first-term governor's legislative agenda died upon adjournment, including educational initiatives and a proposal to stop New Mexico from issuing driver's licenses to illegal immigrants. 

However, the governor won a last-minute victory as lawmakers agreed to a tax incentive that's a centerpiece of her plan to help create jobs. The bill provides a tax break for the construction and manufacturing industries that could cost the state about $31 million in reduced revenues over two years. Also approved was a governor-backed bill to provide a tax break for businesses that hire returning veterans. 

Despite those accomplishments, Sen. Rod Adair, a Roswell Republican, called it "the biggest do-nothing year I've ever seen." 

"We now, habitually, especially in the years of a Republican governor ... come here and do nothing. And everybody knows the reason that is done is to try to prevent any achievements by the Republican governor. It's the very worst of motives," Adair said after lawmakers adjourned. 

Democratic leaders described it as a successful session that produced a budget, tax cuts and financing for capital improvements and highway projects. Lawmakers also agreed to roll back a tax increase on businesses to shore up the state's unemployment compensation fund. Rates paid by businesses will return to what were in effect last year, saving employers nearly $82 million. 

"I think it was great for jobs in New Mexico," said Senate President Tim Jennings, D-Roswell. 

Winning final approval was a package of measures to overhaul a scandal-plagued agency that regulates utilities, telecommunications and insurance. Voters will decide in the November general election whether to adopt the constitutional amendments, including one to establish minimum qualifications for Public Regulation Commission members. Other changes will create an independent insurance regulator and transfer the registration of corporations from the PRC to the Secretary of State's office. 

Among casualties in the session was an educational proposal sought by the governor to implement a new teacher and principal evaluation system tied to student achievement. Also failing was a governor-backed measure to hold back third-graders if they can't read proficiently rather than letting them advance to the next class. Supporters said it's critical because students are at a high risk of dropping out of school if they can't read by the third grade. 

House Majority Leader Ken Martinez, D-Grants, said lawmakers were just a "few words" away from a compromise on the student retention bill. 

"If we could have had taken 30 more minutes ... we wouldn't have had the minor train wreck we had today," Martinez said. 

Under the state Constitution, the legislative session must end at noon. 

Democratic opponents contended that governor's educational initiatives were conceived more as campaign slogans than as meaningful fixes to the problems schools confront in a state with one of the nation's highest rates of poverty. In particular, they argued that the student retention proposal could hurt students who are held back early in their school career. 

Lawmakers took care of perhaps the most essential piece of business by approving a $5.6 billion state budget earlier this week. However, Martinez has raised the prospect that she might veto all or parts of the spending blueprint -- something legislators believe is unlikely. The budget provides for a nearly $220 million spending increase next year for operations of public schools, colleges and government programs ranging from prisons to health care for the needy. 

Lawmakers passed a measure that's dear to members of the House and Senate because it finances more than $130 million in capital improvement projects across the state, including in the home districts of legislators. Also approved was a bill financing nearly $140 million in capital improvements for colleges, universities, senior citizen projects and libraries. 

The political tug-of-war between Martinez and Democrats resembled the legislative standoffs when Republican Gov. Gary Johnson sparred with the Democratic-controlled Legislature during his two terms in 1995-2002. Unable to push through his proposals, Johnson frequently resorted to vetoing scores of bills passed by Democrats. 

A stalemate over high-profile issues, such as driver's licenses for illegal immigrants, isn't without risks for Democrats in an election year. All 112 seats in the Legislature will be on the ballot. Republicans have their eye on trying to pick up seats in the House and potentially gain a majority for the first time in more than a half century. Democrats hold a narrow 36-33 majority in the House, which also has one independent. 

Senate Majority Leader Michael Sanchez, D-Belen, said he expected campaign attacks on the driver's license issue and other votes cast by lawmakers during the session. 

"We'll go to the public and explain our position philosophically. We have a pretty intelligent base of voters in New Mexico and once we explain the differences, I feel pretty confident that they'll understand it," said Sanchez. 

The governor's driver's license proposal would have overturned a 2003 law allowing licenses for people without Social Security numbers, including illegal immigrants. The measure passed the House but stalled after running into stiff opposition in the Senate, just as it did last year. Senators approved an alternative proposal that would have required fingerprinting of immigrants applying for licenses and limited their licenses to a year rather than four or eight years currently. 





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