New Mexico

Chief of Staff: Governor Martinez preparing for state government shutdown

SANTA FE (AP) - New Mexico Governor Susana Martinez is preparing for a state government shutdown amid a budget standoff between the Republican and the Democratic-controlled Legislature.

Martinez chief of staff Keith Gardner said Friday the governor's office is exploring how the shutdown would work and which non-essential agencies will close. The state's cash is expected to run out next month without a balanced budget.

New Mexico is facing a budget crunch due to declining revenues from oil and gas.

The New Mexico Legislature has approved $6.1 billion budget plan and companion tax increase for the coming fiscal year that would increase funding to public school and hold spending steady at most government agencies.

The Democrat-led House of Representatives voted along party lines Friday to approve $280 million in increases to taxes and fees, followed by a voice vote to approve the budget.

The budget and tax bills now goes to Martinez for consideration. The Republican governor has warned that she would not sign any tax increases. Instead, she is asking state lawmakers to agree to certain cuts.

The budget bill would increase general fund spending increase of $23 million for the fiscal year starting in July. Funding would increase by 0.5 percent for K-12 public schools and by 2.5 percent for a judiciary branch that has struggled this year to pay salaries, compensate jurors and provide attorneys to poor defendants.

The proposal cuts funding to state universities, colleges and specialty schools by 1 percent.

House lawmakers in the Republican minority want any agreement on revenue increases to include an overhaul of the state's gross receipts tax to eliminate an array tax breaks including exemptions for nonprofits.
   
Democratic lawmakers warn that without new revenue streams additional funding cuts to public schools and state agencies are inevitable. The new taxes and fees also are designed to rebuild depleted state reserves to protect the state's credit rating.


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