SANTA FE, N.M. (AP) - New Mexico lawmakers sent a long list of budget-balancing measures including new taxes on internet sales and gasoline to Republican Gov. Susana Martinez on Thursday, seeking an agreement that would restore vetoed funding to all state universities and the Legislature itself.
The Legislature recessed for the long weekend, giving Martinez until Tuesday to pick and choose among remedies and reinstate $765 million in spending cuts.
“We came together and put together responsible options and now the ball is in the governor’s court,” Senate Majority Leader Peter Wirth said.
Martinez vowed to veto outright tax increases, while praising lawmakers for a bill that would use unspent money from construction projects to plug an estimated $70 million deficit for the fiscal year starting July 1 and ending in June 2018.
That bill alone, if signed, would be just enough to close a gap in a $6.1 billion general fund spending plan.
“Even if she vetoes tax increases, the budget is still balanced - barely,” said Rep. Paul Bandy, R-Aztec, who voted with House Republican colleagues against the two bills to increase taxes.
Martinez and Democratic lawmakers have been feuding for months over how to cope with faltering state revenues linked to a weak economy and energy prices. New Mexico relies on the oil and natural gas sectors for about one-third of annual state spending.
Martinez last month rejected a variety of tax hikes, only to see them reintroduced Thursday.
In a written statement, Martinez praised lawmakers for incorporating into legislation several of her suggestions, including a $1 million transfer to a university cancer center and the use of severance tax bonds to shore up the general fund.
“Overall, I’m pleased that we were able to come to an agreement on the budget,” she said, without indicating how she will act on specific legislation.
Democratic Senate Finance Committee John Arthur Smith said lawmakers “had to swallow a tough pill” by using borrowed money to plug a budget hole.
He urged Martinez to reciprocate by adopting taxes on internet sales and on nonprofit and government hospitals. Hospitals back the tax as a way to increase federal matching funds for Medicaid to the state.
Martinez has indicated she would support tax revenue increases only if they are part of a broader proposal to overhaul the state’s gross receipts tax on sales and business services.
Rep. Jason Harper, R-Rio Rancho, introduced a long-awaited bill on Wednesday to repeal dozens of tax breaks on nonprofit groups, prescription drugs, textbooks, health care providers and more in an effort to reduce overall tax rates.
Democratic lawmakers blocked the bill from a vote Thursday, saying not enough time was allowed to analyze it and respond.
Without a budget agreement, the state would risk a partial government shutdown and credit downgrade as soon as June 22, State Auditor Tim Keller said Thursday.
Democratic lawmakers have unsuccessfully petitioned the state Supreme Court to rescind the governor’s spending cuts that could eventually defund the Legislature, along with university hospitals, emergency rooms and medical research facilities.
Wirth said the Legislature is laying the groundwork for another Supreme Court challenge if necessary.
Martinez and the Legislature have been feuding for months over how to eliminate a budget shortfall for the upcoming fiscal year.
The governor last month rejected a variety of tax and fee hikes, while vetoing $765 million in state spending.
Lawmakers also approved a gasoline and diesel tax increase of 5 cents per gallon to 22 cents, an increase to the vehicle sales tax by one percentage point to 4 percent, and charging a $55 permit fee on interstate trucking permits - up from $5.50. The new gas taxes would boost state reserves and pay for road maintenance and construction.
The budget crisis already has triggered public tuition increases at several state colleges, layoffs at state museums and a shortage of public defenders. State university presidents say the impasse has inflicted long-term damage by frightening off prospective students and undermining efforts to recruit faculty and research scientists.
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