SANTA FE, NM (AP) -- New Mexico Gov. Susana Martinez proposed Monday to cut state spending by about 3 percent next year to balance a $5.4 billion budget for public education and governmental services.
In releasing her budget recommendations to the Legislature, the Republican governor proposed that public schools find $30 million in savings in administrative operations. However, she said school districts should be able to find the savings without cuts in classroom spending, which she had pledged to protect during last year's gubernatorial campaign.
Martinez also recommended that government workers and some educators pay more for their pensions. It's a change that would trim take-home pay for public employees although part of that would be offset by lower federal payroll taxes.
No tax increase would be required to balance the budget under Martinez's plan, which would trim state spending by about $179 million in the fiscal year that starts July 1.
A budget proposal by the Legislative Finance Committee calls for cuts of about $194 million.
Like the legislative panel, Martinez gained much of her proposed savings by requiring state workers and some educational employees to pay an additional 2 percent of their salaries for their pensions. The state would reduce its pension payments by a similar amount, saving about $39 million next year.
Martinez would apply the pension shift to public employees except teachers and educational assistants. She said that would help protect those who provide classroom instruction for students.
A worker earning about $43,000 a year would see an estimated $32 drop in each paycheck because of the higher pension payments, according to the administration.
The LFC had recommended a 1.75 percent pension swap - saving almost $50 million - but it would apply to all educators and state workers.
A similar 1.5 percent pension contribution change was enacted in 2009 for two years. Martinez and the LFC propose to continue that next year, saving about $42 million.
Martinez said the pension change was preferable to layoffs, furloughs or a permanent salary cut for workers. The higher payments flow into pension funds, which means the money remains available to workers when they retire or leave for another job.
"We all have to tighten our belts. Families in New Mexico are tightening their belts," Martinez said at a news conference. "And state employees as well as cabinet secretaries ... everyone in state government has to start doing more with less."
In the current budget year, which ends in June, the state is spending $5.6 billion. That includes about $380 million in federal economic stimulus money, which won't be available in the next fiscal year and has created a budget gap that the governor and Legislature must close through cuts or finding additional revenues.
Martinez's budget picks up about $33 million from cash balances held by a number of programs, including $10 million from the College Affordability Fund, an endowment that provides scholarships for college students who don't qualify for the state's largest financial aid program.
The governor also proposed scaling back a tax break for film production in New Mexico, saving $25 million next year. Her budget assumes the state can save $6 million by eliminating appointive government jobs and $7.9 million by consolidating and streamlining state agencies.
Overall, the governor's budget would provide about $2.4 billion for schools next year. The state's network of colleges and universities would get $743 million, a nearly 3 percent reduction.
Martinez, a former prosecutor, spared the Department of Public Safety from budget cuts next year and made only a 0.1 percent reduction in the Department of Corrections, which operates the state prison system.
The LFC had recommended a 4 percent, or nearly $11 million, reduction for corrections, but Martinez said she couldn't support that because it could force the administration to release inmates early.
Rep. Luciano "Lucky" Varela, a Santa Fe Democrat and LFC chairman, said the governor's budget represented a starting point in negotiations with legislators over state spending.
"I am hoping that by the time we get to the end of the session that there will be consensus," said Varela.
(Copyright ©2011 by The Associated Press. All Rights Reserved.)
