- Associated Press - Wednesday, February 17, 2016

SANTA FE, N.M. (AP) - The New Mexico Legislature gave its final approval Wednesday to an operating budget for next year that shaves spending by $7 million, as the state draws down operating reserves to offset plummeting revenues tied to oil and natural gas.

With a 57-10 concurrence vote by the House of Representatives, the $6.2 budget is now in the hands of Republican Gov. Susana Martinez, who can cut spending in the package further using her line-item veto powers.

The budget was overhauled twice during the 30-day legislative sessions as forecasts for revenues for the coming fiscal year were revised downward by more than $300 million.

Martinez and the Legislature initially expected to increase spending by about $230 million. Instead, state analysts were forced to scour agency accounts for spare cash and incorporate $88 million in one-time funds into the budget to avoid more extensive spending cuts.

Many of the governor’s priorities for increased spending still receive some new money. Modest increases were slated for state prisons, the Department of Public Safety, public schools, Medicaid and child protective services.

The Corrections Department would receive an additional $4.5 million to raise the salaries of prison guards and supervisors, and another $1.25 million was set aside to help complete a three year pay-increase plan for State Police.

Most agencies, however, will have to trim operating expenses. Funding to state colleges and universities would decrease by nearly $20 million, including $5.4 million in cuts at New Mexico State University.

Several House Democrats warned that using one-time funds to plug budget gaps could make it harder to balance the books next year if oil revenues do not recover. They said revenues might have been raised more responsibly by delaying the implementation of corporate income-tax cuts, suspending business tax incentives or raising the state tax on gasoline.

“We’re building ourselves crisis 2.0 in January 2017,” said Rep. Brian Egolf, D-Santa Fe. “When the next crisis comes in our budget, we’re not going to have these huge reserves, we’re not going to have these cash balances.”

To make up for plunging revenues in the current budget year, the state plans to draw down operating reserves to from $713 million in July 2015 to $346 million at the end of June.

The budget increases minimum salaries for veteran teachers by $2,000, at a cost to taxpayers of $5.5 million.

Funding does not change next year for early childhood reading and education programs at the Public Education Department, though more money is allotted to early childhood services including prekindergarten at Children Youth and Families Department.

The budget includes $1.2 million to clear a backlog of evidence kits from sexual assaults and rapes.

For spending on economic development, a job training incentives program still would receive $6 million. A state tourism marketing campaign would receive $300,000. One-time spending of $1.25 million would go toward the state’s Rapid Workforce Development Fund, which pays for worker training at community colleges.

Energy-dependent states across the country are confronting revenue shortfalls as oil prices hover near $30 a barrel.

New Mexico is contending with ballooning costs for Medicaid health care, as full-benefit enrollment has surged to 36 percent of the state population.

Starting in 2017, New Mexico begins paying a 5 percent portion of costs for the federally-backed expansion of Medicaid under the Affordable Care Act to cover more single adults - adding $40 million in obligations during the coming budget year.

The budget devotes $21 million in general-fund revenue to Medicaid, and it provides nearly another $40 million from the state’s tobacco-settlement fund and other accounts.

Copyright © 2018 The Washington Times, LLC.

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