On January 21, 2019, the 30-day New Mexico Legislature began, with New Mexico Governor Mitchell Lujan Grisham giving her second State of the State address to a joint session of the New Mexico House and Senate. Thirty-day sessions are limited to budgetary matters and issues approved for consideration and placed on what is referred to as the “Governor’s Call” or “Governor’s Message”.
In her opening remarks, the Governor proclaimed:
“The state of our state is dynamic, ready for more, on the cusp of steady and sustainable progress. … We are stronger today than we were one year ago, no question.”
The Governor touted economic statistics in support of her statement that the State is stronger today than one year ago. According to the Governor, New Mexico is number 8 nationally in job growth and had its best year for job growth since 2005, with 15,000 new jobs since the beginning of 2019.
THE GOVERNOR’S PRIORITIES
In addition to enactment of a $7.5 billion dollar balance budget, the Governor outlined the following priorities:
PERA PENSION SYSTEM
The Governor supports overhauling the state pension system for government workers known the Public Employees Retirement Association (PERA). She proposed a $76 million infusion of cash to help the state’s chronically underfunded PERA and agrees with the major changes proposed by the legislature.
For the 2020 legislative session, Governor Michelle Lujan Grisham has endorsed a complex proposal to overhaul New Mexico’s chronically underfunded PERA proposed by Democratic legislative leaders. The proposal builds on the work of a PERA task force established by the governor with some major changes. The most controversial recommendations by her task force involved the 2% cost of living (COLA) currently guaranteed to all retirees. According to media reports, the legislation will establish a “profit-sharing” model for the annual cost-of-living adjustments that most retirees now receive. Rather than an automatic 2% increase in their pensions each year, the actual amount would fluctuate, anywhere from 0.5% to 3%, depending on investment returns.
Under the proposed legislation, government employers and employees will pay more into the system with a schedule that phases in higher contributions. Other changes will help retirees who are older than 75, disabled or receiving pensions of less than $25,000 a year, despite 25 years of service. With respect to annual cost-of-living adjustments, they would be increased by half a percentage point to 2.5% for retirees who are 75 or older. This was a change made after requested by Governor Lujan Grisham.
Under the proposed legislation, many retirees would receive a temporary reduction in their cost-of-living increases. For 3 years, retirees would get an extra check equal to 2% of their pension. Such a “one lump” sum payment in one check would eliminate the compounding effect of having each 2% build on the previous 2% increase.
When it comes to education, for a second year, the Governor wants to increase teacher pay again, extend learning time for students and investing in a new early childhood trust fund to help pay for prekindergarten and other services.
The Governor’s proposed budget is close to $7.7 billion and includes a proposed 4% salary increase for New Mexico teachers and more money for school districts with a large number of “at risk” students. This includes the most significant back-to-back raises for educators in over a decade and increases in whole-child education, bilingual and multicultural frameworks, community schools, and STEAM education program. The proposed budget contains $200.3 million increase in the public-school budgets.
The Governor proposed building a new scholarship program that provides tuition-free college to residents of New Mexico. The scholarship program has been looked upon with some skepticism by legislators.
The Governor wants to create a “New Mexico Opportunity Scholarship” that would benefit an estimated 55,000 college students and expand funding for child-care assistance and pre-Kindergarten programs statewide. The “Opportunity Scholarship” will cover the cost of tuition for students enrolled at New Mexico colleges and universities are expected to cost $25 million to $35 million. The scholarships offered will be aimed at covering the remaining gap for students after other awards and scholarships, including New Mexico’s lottery program scholarships or other sources.
The Governor proposed legalizing recreational marijuana to help diversify New Mexico’s economy, embracing recommendation made by her working group of legalization of recreational cannabis established last year. On September 10, 2019, the Governor’s task force endorsed and recommended a traditional licensing system for private companies that would grow and sell marijuana. The state would not operate retail stores. The licensing system is the same system as used for the State’s medical cannabis program. The proposal is a complete shift from the legislation that advanced through the state House last session where Democratic lawmakers embraced the idea of state-run cannabis stores as a part of a compromise with Republicans.
NEW MEXICO HEALTH CARE
The Governor wants to improving New Mexico’s health care system by capping copays in some cases and importing prescription medicine wholesale from Canada. The Wholesale Prescription Drug Importation Act (SB 1) has been added to the Governor’s call and would create an office of wholesale drug importation at the Department of Health where officials would create a plan to import certain prescription drugs from Canada. Only those drugs that will result in substantial saving be imported. The federal officials have to approve the plan first.
With respect to the public safety, the Governor embraced toughing penalties for human-trafficking, drug-trafficking and gun-trafficking. She announced and expanding the State Police force by 60 officers. She also said she wants a new law to target “people who terrorize New Mexicans with threats of mass violence.”
HELPING HAND TO NEW MEXICO SENIORS
The Governor announced she wants to have funded a “Senior Dignity Fund” to help pay for transportation, food and other necessities for needy seniors and adults with disabilities. She is proposing funding of $25 million “
“RED FLAG” LAW CONSPICUOUSLY ABSENT
On January 8, in a press conference widely covered by the media, the Governor endorsed a “red flag” law. Under the proposed law a law enforcement officer or family member requesting an extreme-risk protection order would provide a sworn affidavit explaining in detail the facts and circumstance as to why the order is needed against a person. A judge could then issue a 15-day emergency order to seize the weapons and ammunition from that person and would schedule a hearing to determine if there was a need for a one-year order. When the court order expires, the guns and ammunition would then be returned to the individual.
During her 47-minute speech, the Governor made no mention of the “red flag” law signaling that it may no longer be on her call for the session.
COMMENTARY AND ANALYSIS
The 2020 New Mexico Legislative is Governor Michelle Lujan Grisham’s second legislative session, but she has been through sessions before as a cabinet secretary, knows the drill and knows how to count votes. In her second State of the State address, Governor Michelle Lujan Grisham has indeed announced an ambitious agenda that is still very much evolving, subject to constant change and that no doubt will include much more.
One thing is for certain, the governor’s agenda can be considered ambitious for a 30-day session. No doubt it will be hectic for all legislators. Notwithstanding, the 2020 legislative session will be made much easier because of the oil boom that has propelled New Mexico’s government revenue to record highs. The record surplus should allow the Governor and legislature to fund all the education programs, invest in capital projects and infrastructure as well as shore up the PERA pension funds, but no doubt the legislature will use extreme caution in the funding programs/
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