Governor Martinez proposes 3% budget reduction, 2% take-home pay reduction for state workers

Jan 11, 2011

Santa Fe, NM – On Monday, Governor Susana Martinez released her proposals for balancing the state's next fiscal year budget. Overall, the plan includes a 3 percent reduction in spending. There are cuts to education in the package, but Medicaid remains relatively intact. Martinez suggests cutting about 1 point 5 percent from K through 12 education. While the governor can't mandate how school districts make the cuts, Martinez says her office will issue a directive to ensure the money is taken from administration only.

"It is wrong for only sixty one cents of every education dollar to be dedicated to the classroom," Martinez said in press conference Monday. "So while my budget calls for bureacracies to trim waste and excess, it does not take money out of the classroom where it is most needed."

Martinez also proposes increasing the contribution public employees make to the state retirement fund by two percent, rather than the 1-point-7-5 percent proposed by the Legislative Finance Committee last week. But Martinez wants to exempt K through 12 teachers from the increase. While she has said she won't furlough employees or raise taxes, she acknowledged the 2 percent reduction in take-home pay may feel like a tax increase to some state employees.

"We all have to tighten our belts," Martinez said. "And families in New Mexico are tightening their belts, and state employees as well as cabinet secretaries, exempt positions, everyone in state government has to start doing more with less."

Martinez said she wants to roll back film industry tax incentives by 10 percent to save about 25 million dollars a year. LFC Chairman Luciano "Lucky" Varela, a Santa Fe Democratic Representative, said Martinez's budget is close to the LFC's. But he says he's concerned about exempting teachers from the pension contribution increase, adding, "other employees pay as much for a loaf of bread as teachers do."

The budget battle begins in earnest next week at the Roundhouse.