Governor Visits Española To Explain Budget Vetoes

Governor Susana Martinez visits Española April 17 to discuss her vetoes of budget measures and next steps to address the budget crisis. Valley Daily Post photo

Governor Visits Española To Explain Budget Vetoes

Staff Report

Governor Susana Martinez traveled to Española Monday morning as part of a tour around the state she is conducting to build support for her vetoing portions of the budget package passed by the legislature in March and the subsequent need to call a special session to deal with the budget later this spring.

At a press conference held outside the National Guard Armory on Industrial Park Road Governor Martinez outlined her disappointment with the budget package passed by the legislature, saying the Legislature had sent her an “unbalanced budget” meaning she had to veto it and call a special session. When asked when a special session would occur, she said that she and legislative leaders are now negotiating a budget compromise that  “balances the budget” and is hopeful that a short special session will occur before May.

The 2017 session of the New Mexico Legislature, which ended March 18, focused largely on declining revenues and a potential budget crisis threatening school funding and government services.

At the end of the legislative session the House and Senate sent Governor Martinez a budget package that included a budget bill, that did not cut education spending as some observers had feared necessary but balanced the budget by generating new revenues through a series of fees, taxes and closing of loopholes.

These revenue increases included requiring out-of-state online vendors, such as Amazon to start paying sales tax just like in-state businesses do. It also included an increase of fees charged to interstate truckers traveling across the state, and a 10 cent per gallon gasoline tax. The Legislative Finance Committee estimated that the package would have generated $350 million, balancing the budget and establishing a small reserve for emergencies.

Governor Martinez signed the budget, but line-item vetoed $700 million in funding for all higher education institutes, meaning all state funding for New Mexico universities and colleges, including Northern New Mexico College.  She also line-item vetoed all funding for the New Mexico Legislature, but approved funding for the office of the Governor. The Governor also vetoed the entire revenue enhancement bill, including the “Amazon tax”.

The result is that the state has an incomplete budget for the fiscal year that begins July 1.  Some funding has been approved, but revenues are inadequate and higher education institutions are totally unfunded. The crisis has caused some schools, such as New Mexico State University to hold-off setting tuition rates for the 2017-18 school year, pending a special session.

When asked by the Valley Daily Post about the impact on entities such as Northern, Governor Martinez said, “We are not going to not fund higher education. It is extremely important to the legislature and to me. I set aside because I didn’t have a balanced budget, and since I didn’t have a balanced budget we had to set things aside and then we are going to put it back, of course. “

When asked is she would support any revenue increases the Governor responded “Maybe”, but she did not like many items in the last package. Governor Martinez did express support for a tax reform package, House Bill 412 that Rep. Jason Harper (R-Rio Rancho) sponsored in the regular session, but which did not pass the Senate.  HB 412 would have eliminated numerous tax exemptions to raise revenue, but then lower the state gross receipts tax, making it revenue neutral, meaning it would not generate any new money.

Governor Martinez said she was involved in the negotiations on the tax package and would support the removal of exemptions from non-profits, under the right circumstances.

HB-412 died in the regular session earlier this year after several non-profit organizations voiced concerns, including a number from the Española area. The Family YMCA, which runs the Española Teen Center and other youth operations provided information showing the bill would have cost them more than $230,000 per year, severely hurting their ability to maintain operations.

Governor Martinez said towards the end of her press conference, “Just like people live paycheck to paycheck, we are trimming state government to live within our own means”. Her staff then ended the event, saying she had to leave for a similar event in Los Alamos.

Governor Martinez speaking to members of the media outside the entrance to the National Guard Armory on Industrial Park Road in Española. Valley Daily Post photo