Gov. Martinez confident legislature will fix budget crisis without raising taxes

New Mexico Gov. Susana Martinez said during a news conference Monday in Las Cruces “raising taxes to bail out big government while punishing working class families is not acceptable.”

The governor, who did not set a date for legislative special session, said she is confident “we can work together and we can fix this problem without raising taxes on families. I have confidence we can pull together and fix this budget. A solution does not require raising taxes.”

Martinez has vetoed major portions of a $6.1 billion spending bill – including a $350 million package of tax and fee increases designed to shore up shaky state government finances – for the coming fiscal year, including funding for higher education and the Legislature.

The Republican governor on Friday said in a veto message the state’s Democrat-led Legislature has refused to bear its fair share of reductions in state spending.

Martinez says a proposal to raise taxes on gasoline and diesel sales would place an undue burden on families. The governor also objects to new taxes on the sale of vehicles and trucking permit fees approved by the Democrat-led Legislature.

New Mexico’s traditional streams of tax revenue have been eroded by relatively weak energy prices and a stagnant local economy, with reserves nearly depleted. Martinez says she will call a special session to resolve a $156 million budget shortfall, but did not specify when the special session would begin.

Martinez is urging lawmakers to support a tax-code overhaul designed to improve the state’s business climate by eliminating hundreds of tax breaks, including long-standing exemptions for nonprofit organizations.

“The Legislature has disappointed me in the past, but I cannot recall another time where I’ve ever felt that their reckless decisions had left New Mexico hanging in the balance,” Gov. Martinez,” It wasted 60 days in Santa Fe on bills like official state songs and dances, and sadly for the people of New Mexico, they left little to show, except for an unbalanced budget and one of the largest tax increases in state history.”

In vetoing funding for state colleges and universities, Martinez chastised the state Senate for refusing to hold hearings on her nominations for regents. She says funding issues for higher-education and political appointments can be addressed during an upcoming special legislative session.

Martinez also has vetoed a capital spending bill that would have restored $46 million in money taken from public school district reserves this year to address a state general fund deficit. The governor favors using those funds instead to shore up state finances and avoid proposed tax increases.

“Because of (the legislature’s inaction), state government is running low on money,” Martinez added, “We’ve taken steps to soften the blow. We’ve instated a hiring freeze. We’re looking at furloughing employees as early as this month.”

Martinez acknowledged New Mexico is facing a state government shutdown “where our MVDs, museums and state parks may need to close down simply to pay other bills, like keeping the lights on in our classrooms.”

Martinez on Thursday renewed criticism of companion legislation to bring in $350 million by increasing taxes on gasoline, hiking permit fees for trucks and reduce tax exemptions on nonprofit hospitals.

“During the session, I provided the Legislature with over $300 million in options to balance the budget. I offered compromise. But the Senate didn’t want to come to the table,” Martinez said, “Instead, it sent a $350 million tax increase for our families to bear the burden of their inaction. This is not the way to govern.”

Senate Finance Committee Chairman John Arthur Smith says the governor’s proposals to limit tax revenues and government spending could drive up unemployment and threaten the state’s credit rating.

State Senator Mary K. Papen, (D) District 38, told ABC-7’s New Mexico Mobile Newsroom the governor’s claim the legislature wasted 60 days in Santa Fe is “false and insulting.”

“The Legislature passed a balanced and bipartisan budget for next year, but she chose to veto it recklessly to keep a campaign promise,” Sen. Papen said. “The legislature’s budget was responsible – it said no more cuts to our kindergarten through 12 public school classrooms, and no more cuts to teachers’ and police officers’ take-home pay.”

Papen further stated that after eight years in office, “the Governor’s lack of leadership and ideas on the economy has left New Mexico with a serious revenue shortfall, a falling bond credit rating, the highest unemployment rate in the U.S., low median wages, and schools ranked at the bottom for student achievement.”