Democrats celebrate big legislative wins on education, taxes

By MORGAN LEE and RUSSELL CONTRERAS Associated Press
SANTA FE, N.M. (AP) — The Democrat-led New Mexico Legislature sent a $7 billion spending plan to an allied governor that hikes spending on low-income students, teacher pay and infrastructure as the annual legislative session came to a close Saturday.
In the final minutes, lawmakers approved a bill over objections from many Republicans that would raise sales, income and investment-related taxes, while offering a larger family tax credit.
Gov. Michelle Lujan Grisham and legislators are confronting a mid-April deadline to provide a district court judge with a plan to turn around the state's troubled public education system or possibly concede authority over public school resources to the judiciary.
Democratic leaders, including House Speaker Brian Egolf of Santa Fe, said the budget injects as much money as possible into public education without risking future school layoffs if a recession hits.
"This is a first step in a four- to five-year process of completely reforming education," he said.
Democratic floor leader Rep. Sheryl Williams Stapleton of Albuquerque said lawmakers followed cues from the court to provide new resources to Native American and other minority students who speak an indigenous or foreign language at home.
A general fund budget for the fiscal year starting in July would increase annual spending on public education by 16 percent to $3.2 billion. New Mexico schools rely almost entirely on state dollars.
A booming oil sector in the Permian Basin that straddles the state line between Texas and New Mexico is providing a financial windfall to state government at the same time Democrats have consolidated power over the House and every statewide elected office.
Democratic lawmakers, unchained by the departure of a Republican governor, pushed through reforms on gun control, oilfield regulations, labor rights and the state's first minimum wage increase in a decade, a gradual uptick from $7.50 an hour to $12 by 2023.
"Tax reform, done. Minimum wage, done," said Senate majority leader Peter Wirth of Santa Fe, calling the session the most productive in more than a decade. He vowed to revive a stalled bill to legalize medically assisted suicide that is opposed by Republicans.
Much of the state budget surplus — more than $1 billion this year and next — will be reinvested in improvements to physical infrastructure, from roadways to high-speed internet lines.
"What we've done is provide resources to improve our education system, to improve our infrastructure, to make sure that new initiatives get off the ground, like outdoor recreation programs," said Rep. Patricia Lundstrom of Gallup, chairwoman of the lead House budget committee. "There's just a heck of a lot."
State economists have warned that surpluses could evaporate suddenly with a shift in oil markets, and lawmakers spent the final hours of the session in negotiations over a tax bill that might provide limited new sources of income to sustain teacher pay and government services.
Lujan Grisham praised the tax bill, without yet signing it, as both a quick fix to 2017 federal reforms that limited family tax exemptions — and a step toward stable state income.
"The best time to fix your roof isn't when it's raining, it's when the sun is shining," said Lujan Grisham of efforts to raise sales taxes on cigarettes, internet and vehicles.
Fiscally conservative lawmakers were wary of seeking tax increases on top of a government fiscal surplus. Some Democrats wanted to shift tax burdens toward higher-income residents.
"To us, one of the top priorities was to bring progressivity to the tax code," said Rep. Javier Martinez, D-Albuquerque.
The compromise legislation would increase taxes on capital gains and likely raise the top personal income tax bracket from 4.9 percent to 5.9 percent for individuals earning $210,000 and over and joint filers making $315,000. A large rise in other state income would suspend the tax rate increase.
GOP Rep. Jason Harper of Rio Rancho said the state "is in the position of raising taxes because we spend too much money."
After the session ended, House Republicans immediately denounced it as "one of the worst" in recent history and accused Democrats of breaking rules to push through legislation.
GOP House Minority Whip Rep. Rod Montoya, R-Farmington, said Democrats stifled debate and often refused to work with Republicans.
"This became the year that Santa Fe imposed their will on the rest of the state," Montoya said.
House Republicans praised the Senate, dominated by conservative Democrats, with halting some of the more liberal bills.
The Senate voted down an effort to remove the state's dormant criminal ban on abortion.
In the early morning hours Friday, the Legislature passed a bill that would set in motion an independent state ethics commission for complaints about the conduct of public officials. The seven-member commission was authorized by statewide vote in November 2018, in the wake of several high-profile public corruption scandals.
The bill limits the commission's subpoena powers to requests authorized by a judge.
Major changes to the oversight of gun purchases already have been signed by the governor, and legislators passed a bill to ensure that firearms are relinquished by people who have been ordered to stay away from domestic violence victims.
A bill dubbed the Energy Transition Act was awaiting the governor's signature to provide incentives for electric utility companies to close down a major coal-fired power plant and invest in solar arrays and wind turbines. New Mexico's version of a "Green New Deal" aims for carbon-free electricity production within a generation.