NM Budget Proposal: State retirement fund contributions decrease, teachers pick up the slack

Governor Susana Martinez is calling for further belt tightening to fix the state’s $67 million budget shortfall by proposing teachers and state workers take home less money a month.

Under the governor’s proposal, teachers and state workers would have to contribute more money into their retirement accounts.

The governor’s office says, currently, workers who make more than $20,000 a year hand over 8.2 percent a month. Under the proposal, the would hand over an additional 3.5 percent, raising their contribution to 11.7 percent.

Employees who make under $20,000 will hand over 10.92 percent of their salary a month.

Currently, the State of New Mexico contributes 16.99 percent to its teachers’ retirement funds. Under the governor’s proposal, that would decrease by 3.5 percent to 14.49 percent.

Governor Susana Martinez says New Mexico has one of the most generous retirement plans in the country. She says she’d rather have residents investing more in something they’ll get back eventually, than raise taxes.

“It’s not something that we take and never giveback to them when they leave state government or retire,” Martinez said. “That amount of money they’ve put back and invested will get back to them.”

State workers, like NMSU professor Darren Phillips, say handing over an additional 3.5% of his pay check every month is difficult.

“It’s hard to have to let go of that money,” he said. “Our retirement pension doesn’t pay the mortgage now, it doesn’t pay for child care, it doesn’t pay for our immediate expenses now, so I wish there was some other way.”

New Mexico lawmakers have outlined a compromise on solvency legislation designed to fix a state budget deficit and restore reserves.

A conference committee of House and Senate lawmakers on Wednesday signed off on solvency measures that would target $46 million in local school district reserves to shore up the state general fund. A vote on the provisions was pending in the House and Senate.

Other compromises would reduce funding by $7.6 million to a closing fund to support businesses that expand in New Mexico, a smaller cut than initially proposed.

An amended package of budget solvency bills would fill an $80 million shortfall for the current fiscal year ending June 30 and boost reserves to 2.3 percent of annual spending.