SANTA FE — Gov. Michelle Lujan Grisham signed the fiscal year 2021 revised budget late Tuesday afternoon after an unprecedented special session convened to try and blunt the worst effects of the coronavirus pandemic and spiraling revenue from curtailed oil production in the Permian Basin.
The budget, which will go into effect on July 1, totals $7.22 billion, down from the $7.6 billion plan approved by the Legislature in February.
The approved budget includes a 4% reduction for Instructional and General support and a 6% reduction for Research and Public Service Projects across all higher education institutions, according to an email from the governor’s press secretary Nora Sackett. As of the time of this article’s publication, the details of which projects would shoulder the cuts were still unclear.
The revised budget from the Legislature also cut the 1% raise for higher education employees that was included in the previous budget.
In an unexpected move, however, Lujan Grisham vetoed more than $30 million in other budget cuts that the Legislature had proposed.
The Legislature’s proposal slashed the budget for the new Opportunity Scholarship program down to $5 million. The governor reversed that decision back up to the previously-approved $12 million, with $7 million in recurring and $5 million in non-recurring funds.
The governor has championed the Opportunity Scholarship from its inception and originally wanted all New Mexican students to be eligible for free tuition, but according to a story previously published in the Daily Lobo, the language in the previously approved budget stated, "the Opportunity Scholarship program shall prioritize financial aid based on need to undergraduate, credential-seeking students who are enrolled in a two-year academic program.”
In order to restore the spending, the governor exercised her executive authority to redirect the federal CARES Act money that the Legislature had proposed be distributed to local communities for health-related spending.
By using the federal money, Lujan Grisham left the state reserves in the new budget at 11.3%, according to a press release from the governor’s office.
Outgoing Senate Finance Committee chairman John Arthur Smith (D-Deming) told the Daily Lobo in a phone interview that he was concerned about the state’s future revenue stream.
“If our economy doesn’t perk up, and we get a second wave of the virus, the state could be in big trouble,” Smith said. “My message to the administration was that it is better to go and cut on the front door than to try to pull back funds when the Legislature reconvenes in January.”
Smith added that governors have a history of taking control of federal grant money and spending it on pet projects.
“They like to be Santa Claus, even when it’s not Christmas,” Smith said.
He cited as an example that former Governor Bill Richardson used some of the federal money the Obama administration granted the state after the 2008 economic downturn to build the University of New Mexico’s indoor football practice facility, an expenditure that some have criticized.
Representative Jim Townsend (R-Artesia) also expressed concern about the governor’s rollback of the proposed cuts.
"It's (Lujan Grisham’s) overspending that's left us in a financially vulnerable position. Thousands of New Mexicans are out of work, yet Hollywood and Santa Fe bureaucrats are still getting paid,” Townsend said. “The governor is social distancing from reality.”
House Bill 1 authorized the Department of Finance and Administration to reduce state agency budgets an additional 2% if general fund revenues are insufficient.
“The COVID-19 pandemic has caused countless hardships all across our state, and our state finances are no exception” Lujan Grisham said. “Let me be clear: The work of rebuilding our state economy has only begun. We face another serious shortfall next year, but we will not be deterred from our work building a more robust and inclusive economy than ever before as we continue to fight the COVID-19 pandemic with everything we’ve got.”
Lissa Knudsen is the news editor at the Daily Lobo. She can be contacted at firstname.lastname@example.org or on Twitter @lissaknudsen