When the 2011 Legislature is gaveled to order Tuesday, there will be a new
governor, a new, more conservative House of Representatives and a chance of a
new speaker of the House. But all present will face an old, familiar problem
-- a gaping shortfall in the state budget.
Both Gov. Susana Martinez and the Legislative Finance Committee have unveiled plans that would fund government without new taxes or layoffs of state workers. That means a new round of spending cuts and belt-tightening on top of pullbacks already forced by the recent economic recession.
Though the two plans are relatively close and both sides last week appeared open to compromise, there are bound to be areas of contention. Nonetheless, while both chambers of the Legislature remain controlled by Democrats, Republican Martinez is expected to face a friendlier session than the ones endured in recent years by her predecessor, Bill Richardson.
For one thing, an incoming governor typically enjoys a "honeymoon" period. Richardson, despite a few minor spats with lawmakers, enjoyed excellent relations with the Legislature during his first session -- and almost all of the major bills he backed eight years ago won passage. In an interview last month, Richardson said that first session was so successful that "I remember thinking, 'Anything is possible.' "
The composition of this Legislature appears more compatible with Martinez than Richardson. The Senate, despite the Democratic numerical advantage, is a relatively conservative body. And the House, thanks to the November election results, will have more Republicans than it's had in decades. There will be 37 Democrats and 33 Republicans.
Every odd-numbered year, the Legislature meets in a 60-day session, as opposed to 30-day sessions held in even-numbered years. Bills introduced in those shorter sessions are supposed to be confined to budget and financial matters -- except for specific topics identified by the governor. But anything goes in 60-day sessions. Legislators can introduce legislation pertaining to any topic.
As in previous years, conversations over dollars and cents will overshadow most other discussions during this session. With a projected shortfall for the fiscal year that starts July 1 estimated at anywhere between $200 million and $452 million, New Mexico is struggling to balance expected revenues and expenses.
Both the governor and the Legislative Finance Committee -- the Legislature's budget arm -- have recommended cutting spending by around 3 percent, including asking state workers to contribute more to the funding of their retirement plans.
Martinez won big in November after saying she wants to cut government, leaving many New Mexicans unsure what to expect from her first budget proposal. In the end, both she and the Legislature recommended spending levels of around $5.4 billion, with her proposal weighing in at $42 million more, a difference of less than 1 percent.
"I think we will be able to come eventually to a meeting of the minds and make sure that New Mexicans are taken care of," Martinez said when she unveiled her plan.
Rep. Luciano "Lucky" Varela, D-Santa Fe, who chairs the Legislative Finance Committee, said much the same thing. "This is a start," he said. "I'm hoping that by the time we get to the end of the session that there will be consensus among the Legislature -- House and Senate -- and when it gets up to the governor, if there are any vetoes they will be minimal line-item vetoes."
Don't be fooled by the small number, however. Reaching a budget agreement on how and where to cut -- or whether the state needs to cut that deeply -- will likely stretch over the entire 60 days of this year's regular session, if not longer.
One possible sticking point: whether to include public-school teachers in sharing some of the pain. Unlike the LFC, Martinez exempted teachers from contributing more toward their retirement.
Also, while there's no concerted push for increasing the state's broad-based taxes, look for the perennial dust-up over whether to mix in a few tax-side solutions with the cost-saving measures. Some state lawmakers want to rummage through New Mexico's tax code in hopes of finding unexpected dollars. Reducing or eliminating some tax credits, exemptions or deductions would generate much-needed revenue at a time of great economic need, they say.
Martinez, however, isn't receptive. The only exception to her no-tax-increase mantra so far has been to take aim at the state's controversial film-production tax credit. She wants to cut it, saying it would save $25 million. While some say the governor opened the door to a broader tax discussion by targeting the film-production tax credit, she says she hasn't.
Martinez so far has left little to the imagination on how she sees the government's current role in relation to the environment.
She wants to trim the Environment Department by $3 million, taking it from a $14.2 million agency to $11.2 million, a much bigger cut than the $800,000 the Legislature suggested.
That might not seem like that much money, but in some ways the agency's budget is part of an emerging skirmish in what appears to be a much broader war.
She also proposes a $1.3 million cut in the Energy, Minerals and Natural Resources Department, with half a million coming out of the State Parks budget.
Martinez wants to reduce money for litigation and water-rights adjudications in the State Engineer's Office by more than 50 percent.
One of Martinez's first acts after taking the oath of office was to issue an executive order to stop the publication of recently approved rules in the New Mexico Register. The rules must be published for them to take effect. Martinez wants 90 days for staff to review rules such as the cap on carbon emissions approved by the Environmental Improvement Board -- whose members she dismissed.
The New Mexico Environmental Law Center has challenged the governor's right to stop publication of approved rules. The state Supreme Court is scheduled to hear one of the petitions Jan. 26.
Martinez then shook up environmentalists by appointing as her Energy, Minerals and Natural Resources secretary ex-astronaut and former U.S. Sen. Harrison Schmitt, who publicly has stated his belief that any climate change is natural, not man-made. If confirmed by the Senate for the Cabinet post, Schmitt will have control over agencies that monitor and regulate mining and oil and gas drilling.
Legislation that environmentalists and industry will be watching for: a move to wrest away the authority of local governments to regulate oil and gas drilling; a bill to suspend all rules approved under the Richardson administration; and a push to change the way state agencies make rules and regulations.
Health care will play its part in state budget discussions.
Both budget proposals recommend Medicaid spending of more than $800 million for next year, at or slightly above this year's levels. But as one official put it, keeping spending at this year's levels doesn't mean there won't be cuts. A growing Medicaid population, and the natural rise in costs due to inflation, add to the cost of the program.
Because New Mexico is a poor state, one in every four New Mexicans uses Medicaid, the government's low-income health-insurance program. And, in all likelihood, the sagging economy will push more people onto its rolls in coming months. Estimates are that by June, more than 573,000 New Mexicans will use Medicaid.
"It's over 500,000," said Sen. Dede Feldman, D-Albuquerque, who has followed Medicaid for years. "I've never seen that before."
The battle during the session likely will emerge over how and where to trim costs, and one area under discussion is trimming "optional" medical services for adults on Medicaid.
Dental and vision care, prescription drugs and physical therapy are among the optional services offered to tens of thousands of adults.
So far, no decision has been made, officials said.
PENSIONS AND INVESTMENTS:
State employees are likely to be paying more into their pensions after lawmakers adjourn this session -- meaning a cut in take-home pay.
One legislative plan calls for all employees to temporarily pay 1.75 percent more, while Martinez has proposed a 2 percent increase for all employees except teachers. Whatever the number is, key lawmakers say employees need to pay more to help keep the pensions afloat.
"One way or the other, it looks like they will be paying more into retirement," Varela said.
Others say to expect moves to make public employees work longer before retiring, a step other states already have taken to help keep their pensions solvent.
Last year, lawmakers approved temporarily a 1.5 percent increase in pension contributions for most employees, something that is likely to become permanent on top of other changes this session.
The moves in particular should help the Educational Retirement Board plan, which faces a $5 billion unfunded liability.
Last year, the Legislature passed a bill to reduce the influence of the governor on the State Investment Council. This was in response to a study by consultants hired by the state. They determined the governor had far too much power. Sen. Tim Keller, D-Albuquerque, has pre-filed a bill (Senate Bill 17) that would completely remove the governor as a member of the SIC.
CRIME AND PUNISHMENT:
Spending on the state's prisons also might emerge as a flashpoint in this year's budget negotiations.
Under the previous administration, then-corrections secretary Joe Williams decided not to penalize two private firms that operate four of the state's 10 prisons despite repeated contractual violations. The LFC estimated the penalties the agency gave up at around $18 million.
In its budget recommendation, the LFC recommended cutting the corrections agency by $10.9 million, a substantially deeper cut than Martinez had recommended.
Both Varela and the LFC vice-chairman, Sen. John Arthur Smith, D-Deming, said the proposed cut had nothing to do with the penalties that weren't assessed.
Said Smith: "It wasn't retribution."
Varela did say he was troubled by the lack of penalties and hoped the new administration would be more vigilant in watching out for contract violations by the private prison operators. "We need to have a better understanding in terms of what actions do they (the corrections agency) need to take when they go beyond the intended purpose of the contract," Varela said. "You know, ultimately, that profit goes to the private company."
Nonetheless, the LFC's proposed cut provoked a strong response from the governor.
"I just can't see any other way for that taking place (the budget cut) other than opening the doors for early release for some of the prisoners," Martinez said.
With a governor who has been a career prosecutor (and whose husband made his career in law enforcement), it's probably a sure bet there will be bills to get tougher on criminals.
Martinez is proposing that state law require DNA samples from those arrested and charged with any felony. This would strengthen Katie's Law, which was passed in 2006 in memory of a New Mexico State University student who was raped and murdered three years before. That law requires DNA samples only for those arrested in connection with certain felonies, such as murder, kidnapping, burglary and sex offenses.
But it won't always be easy to get crime bills to the governor's desk, even with the more conservative bent of the Legislature. The Senate committee process likely will be the burial ground for some tough-on-crime laws.
That was the case in 2009, with similar bills sponsored by Sen. Peter Wirth, D-Santa Fe, and Rep. Bill Rehm, R-Albuquerque, that would have made it a felony to threaten judges and other court officials. Rehm's bill passed the House with wide bipartisan support but withered in the Senate. Wirth's measure was tabled by the Senate Judiciary Committee. Both Wirth and Rehm have pre-filed similar bills for the upcoming session (SB 10 and House Bill 26.)
During the campaign, Martinez made an issue of her Democratic opponent, former Lt. Gov. Diane Denish, supporting the repeal of the death penalty in 2009. There's a good chance there could be a bill this year to bring back capital punishment. The vote in the House will certainly be closer with all the new Republicans. And it's one big issue where the speakership could be a factor. House Speaker Ben Lujan supported the repeal while his likely challenger, Joe Cervantes, voted to keep the death penalty.
The House passed the repeal bill 40-28 in 2009. But, based on interviews with incoming freshman representatives, the pro-death-penalty side picked up a net gain of eight. (Seven Democrats who voted to repeal were defeated last year and are replaced by death-penalty supporters. One Republican who voted to repeal, Janice Arnold-Jones of Albuquerque, didn't seek re-election. She's being replaced by pro-death-penalty Republican Conrad James.
Assuming none of returning members changed their votes on the issue, that would work out to a floor vote of 36-32 in favor of capital punishment.
But nobody can count on legislators not changing their votes. And one basic rule of the Legislature: It's much easier to kill a bill than to pass it. Bringing back capital punishment will not be a cakewalk.
Rep. Dennis Kintigh, R-Roswell, told KOB-TV last week that he'd like to see a constitutional amendment that would let voters decide on the death penalty. However, a constitutional amendment would take more votes than just changing the law.
During the campaign, Gov. Martinez came down on the conservative side of divisive, hot-button "social issues" such as abortion, domestic partnerships and medical marijuana. With a more conservative Legislature, some liberals have feared that the religious right will prevail on some of these issues during the 2011 session.
But one Republican ex-lawmaker told The New Mexican recently that he suspects Martinez won't actively push for legislation in this area, noting that she didn't campaign hard on any of these issues. She usually talked about them only when they were brought up in interviews or debates.
This observation was given some credence when Martinez, asked at a news conference whether she would be seeking repeal of the medical-marijuana law during the session, replied that while she's still against medical marijuana, "We have bigger issues we have to deal with, like balancing the $450 million budget deficit and reviving the economy."
The issue of gay rights undoubtedly will arise during the session. The outlook for allowing domestic-partnership rights for same-sex and other unmarried couples has failed to get through the Senate in recent years, and the more conservative House makes it seem even less likely to pass. Martinez has promised to veto any such legislation.
Gay-rights opponents are almost certain to introduce some version of a Definition of Marriage Act. After the Attorney General's Office issued a legal opinion earlier this year that New Mexico should recognize same-sex marriages from states and countries that allow it, Sen. William Sharer, R-Farmington, told The Associated Press that he will introduce a constitutional amendment during the upcoming legislative session to define marriage as between a man and woman. Martinez said she supports such action, though a constitutional amendment, which would be decided by voters, does not need the governor's signature.
For as long as anyone can remember, every two years abortion opponents introduce bills to require doctors to inform the parents of girls seeking abortions before an abortion can take place. In the recent past, this Senate has passed such bills, but they die in the House.
With the Democrats in control, a parental-notification bill would still have a hard time making it through the House committee process. However, it probably will be harder to kill it this year with the influx of Republicans.
Rooting out corruption in state government was one of Martinez's driving themes in her election campaign last year. But she has yet to present any legislative proposals of her own in the ethics area.
Ethics has been a hot topic in each legislative session since the FBI arrested state Treasurer Robert Vigil and his predecessor, Michael Montoya, in late 2005. (Both eventually did prison time for corruption charges.) That and subsequent scandals inspired the Legislature to adopt campaign spending limits (which kick in for the 2012 election), gift limits for legislators and changes in the structure of the State Investment Council.
One recurring proposal that never has gained much traction in the Legislature is establishing an independent ethics commission to investigate charges of official corruption. But lawmakers seem extremely reluctant to make this move. Last year, an ethics-commission bill that began moving through the committee process had stiffer penalties for those leaking information about investigations -- up to a year in jail and up to $26,000 in fines -- than for officials found guilty of ethics violations. They would have faced only a public reprimand.
While it's likely that ethics-commission proposals could be considered, during the campaign Martinez said she didn't support the idea. She said she preferred to let state police investigate corruption allegations. However, at this point there doesn't appear to be any money in Martinez's budget proposal for such investigations.
Once again, Think New Mexico, a Santa Fe-based think tank, will promote a bill that would prohibit campaign contributions from lobbyists and state contractors. The bill also would require nonprofit groups that engage in political activity during an election year to disclose their contributors.
During debates on a similar Think New Mexico bill last year, proponents argued that including the nonprofits is meant to attract conservative lawmakers who since the 2008 primary have railed against the Center for Civic Policy and affiliated Albuquerque-based groups for sending out full-color mailers spotlighting targeted legislators' voting records. Republicans and conservative Democrats said it wasn't fair that the organization didn't have to disclose who contributed. A federal judge upheld the group's right not to disclose.
Last year's version of the bill made it through the House, passing 46-24 on a near party-line vote, with most Democrats supporting it and most Republicans against it. But it passed too late in the Senate to be heard in any committee.
This year it might have a better chance of passing the Senate. Think New Mexico's Fred Nathan said it will be sponsored by Senate President pro-tem Tim Jennings, D-Roswell, and Republican leader Stuart Ingle of Portales.
THE LEADERSHIP BATTLE:
House members say it won't be clear until Tuesday whether Lujan, D-Nambe, will hang on as speaker. Cervantes, D-Las Cruces, has been working behind the scenes trying to woo Republicans as well as dissident Democrats who say that Lujan has been too liberal as well as too heavy-handed -- a charge the speaker vehemently denies.
Lujan for the past eight years was Richardson's most important ally in the Legislature. He's credited with saving several Richardson programs, including a major transportation program and the repeal of the gross-receipts tax on food.
Some say Lujan's loss could spell a loss of power for Northern New Mexico in the Legislature.
Last week, Jim Trujillo, D-Santa Fe, said he could lose his position chairing the committee in charge of capital outlay if Lujan is ousted -- and that Varela could be removed as chairman of the Legislative Finance Committee and deputy chairman of the House Appropriations Committee. The speaker controls committee chairmanships. The speaker also has the power to decide how many committees a bill has to go through and what legislation gets heard on the House floor.
Cervantes last week declined to comment on his effort to unseat Lujan. But two of his major backers, Mary Helen Garcia, D-Las Cruces, and Andy Nunez, D-Hatch, said while the vote probably is close, they believe Cervantes has the votes to win. According to the state constitution, the speaker candidate who gets the most votes wins.
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