House Committee OKs Cuts to Education, Medicaid

October 22, 2009

Budget fix begins to take shape as House committee approves sweeping cuts and Senate OKs taking money from other funds to help plug budget gap

The primary bill aimed at addressing the state’s massive budget shortfall – legislation that includes cuts to education and Medicaid – was unveiled late Wednesday and passed the House Appropriations and Finance Committee on a vote of 11-6.

The bill isn’t yet on the Legislature’s Web site, but I got my hands on a copy of the committee substitute for House Bill 17, and you can read it by clicking here.

Here’s a cursory summary of what the bill would do:

• Reduce the budgets of most state agencies by 4 percent.

• Cut Medicaid funding by $14 million, but offset that with $12 million in federal funding, for a total cut of $2 million.

• Four percent cuts to the “instruction and general purposes” categories in the budgets for higher education institutions and the New Mexico Military Institute, New Mexico School for the Blind and Visually Impaired and New Mexico School for the Deaf.
& #x0A;
• Larger cuts — 6.5 percent — to all other categories for higher education and those other institutions, “including research and public service projects.”

• Two percent cuts for most public school budget categories, but 6.5 percent cuts for a few areas including transportation, dual-credit instructional materials and the Indian education fund.

Overall, HB17 would make $299 million in cuts, but offset $79 million of that with one-time federal funds, so the actual cuts would be $220 million. Lawmakers are working to fix a shortfall of $660 million in the current fiscal year.

All Democrats on the House committee voted for the bill Wednesday evening except Brian Egolf of Santa Fe. All Republicans except Jeanette Wallace of Los Alamos voted against it.

The House is expected to vote on the bill sometime after convening at 11 a.m. today. The Senate will consider it after that, if it passes the House. The Senate is scheduled to convene at 10:37 a.m. (Yes, you read that right.)
Senate OKs taking money from other funds

Meanwhile, the Senate on Wednesday evening passed House Bill 3 on a vote of 36-5. It had already passed the House on a vote of 45-21.

The final version of the bill allows the state to take about $70 million in nonrecurring dollars from other state funds to help plug the general-fund shortfall, according to the New Mexico Independent. The funds it draws cash from include the Corrections Department Intensive Supervision Fund, the College Affordability Endowment Fund and the New Mexico Medical Board Fund.

Because those are nonrecurring dollars, this is only a temporary fix.

“T he Legislature has taken a necessary though painful step of passing House Bill 3 that will sweep cash balances from a variety of funds,” Lt. Gov. Diane Denish said in a news release. “Difficult though this decision may be, the fact that it is distributed over many different programs and funds is a fair approach to achieving critically needed reductions.”

“Our highly successful Pre-K program that I have long championed will lose more than one million dollars, but, as I’ve said all along, these painful cuts must be shared by all,” she said. “It is my hope that in the future some of these funds could be restored.”

This article has been updated to include the $79 million in federal funds that HB17 would use to help offset cuts.