A budget proposal for the upcoming fiscal year by New Mexico lawmakers on the Legislative Finance Committee is much like Gov. Michelle Lujan Grisham’s.
But there is one stark difference: Unlike the governor, the committee is recommending raises for state employees — a proposal Lujan Grisham isn’t ready to support as the legislative session nears its Tuesday opening.
The committee’s proposed $7.36 billion budget, released Tuesday, calls for a 4 percent increase in spending in the fiscal year that begins July 1; the governor’s spending plan, which was unveiled a day before, calls for a 3.3 percent increase.
The committee, which is composed of lawmakers from both parties, included $60 million in its proposed budget to provide state, public school and higher education employees average raises of 1.5 percent, as well as $3 million for pay increases for essential health and social service front-line employees. The committee’s proposed budget also calls for pay hikes for New Mexico State Police and correctional officers.
David Abbey, director of the Legislative Finance Committee, called the proposed pay increases for state employees a cost-of-living adjustment.
“For the last dozen years, there have only been compensation increases five times with this oil and gas roller coaster that we’re on,” Abbey said during a virtual briefing with reporters. “We have fallen behind not giving raises more than half of the years out of the last dozen.”
State Rep. Patty Lundstrom, D-Gallup, vice chairwoman of the committee, said the proposed pay increases are part of a “promise fulfilled.”
“Last special session, there was a major debate in both chambers, particularly on the House floor, about providing additional resources to essential health employees,” she said. “We didn’t allow for the amendment on the floor, at least in the House side last year, because we said, ‘Let us take care of this in January.’ ”
Abbey said the governor’s proposed budget includes $80 million of “unspent” recurring revenues.
“So, there’s certainly an opportunity within the executive recurring recommendation to allocate $60 million for this purpose,” he said.
Nora Meyers Sackett, a spokeswoman for the governor, said that while the administration would like to be able to support pay raises for state employees and has strongly advocated for them in the last two fiscal years, Lujan Grisham’s budget proposal “is focused on preserving and enhancing key investments in programs that make a difference for New Mexicans.”
“As the LFC knows,” Meyers Sackett wrote in an email, referring to the committee, “it’s crucial that we be as responsible as we can be this year, and unfortunately that means we’ve got to be more conservative in some areas than in recent years past and can’t over-promise. We will continue to work on making state government a great place to work throughout these ongoing crises.”
The proposed raises come as many employers in the private sector have had to let employees go, reduce salaries and even close their doors for good amid a pandemic that has wreaked havoc on the economy.
“This cost-of-living adjustment isn’t available until next year, so the projections are for the economy to start in a recovery mode, pretty strongly by summer, so I think we’ll find the private sector at least matching a modest cost-of-living adjustment next fiscal year,” Abbey said.
Though the proposed pay increases are a source of disagreement, legislators and the governor agree financial projections aren’t as dire as they were at the onset of the pandemic when state agencies were instructed to cut 5 percent from their budgets. Lawmakers and the governor are recommending largely flat budgets for most agencies.
“The New Mexico economy is struggling, but the state is not in as bad as shape as we anticipated nine months ago,” Sen. Roberto “Bobby” Gonzales, D-Ranchos de Taos and chairman of the committee, said during Tuesday’s news briefing.
“Legislative efforts to build up strong financial reserves and federal stimulus spending have substantially softened the blow of the financial downturn,” he said.
Another noticeable difference in the committee’s budget compared with the governor’s is that the committee’s would bring the state’s reserves down to 22 percent, less than the 25 percent recommended by Lujan Grisham.
House Speaker Brian Egolf, D-Santa Fe, said he believes the differences between the two budgets can be sorted out.
“The core thing that I want to say is that this budget is aligned, very much with the priorities that we’re bringing into the [60-day legislative] session, which is recovery, recovery, recovery,” he said.