House Democrats rebuff GOP effort to cut dividend checks amid ongoing revenue boom

Yahoo

25-02-2025

Feb. 25—SANTA FE — A $10.8 billion spending plan that would boost New Mexico starting teacher pay levels amid an ongoing state revenue boom is headed to the Senate.
The House voted 50-18 on Monday to approve the budget bill, after Democrats rebuffed an alternative GOP spending plan that proposed lower overall state spending levels and $600 dividend checks for all New Mexico residents.
"It's obvious to me the solution to New Mexico's problems is not spending more and more money," said Rep. Cathrynn Brown, R-Carlsbad, during Monday's debate.
She said the dividend checks could be used for a wide range of expenditures, adding, "I just want to make sure we're doing something for our constituents that is going to be a very direct blessing to them."
But Democrats said the Republican plan could violate the state's anti-donation clause that prohibits state dollars being funneled to private parties. They also said it would slash funding for economic development efforts and water initiatives, before voting down the GOP proposal on a party-line vote.
"We are focused on making investments that deliver results for the people of New Mexico now, while maintaining robust reserves and investing smartly so that today's prosperity can benefit New Mexicans for many years to come," said Rep. Meredith Dixon, D-Albuquerque, after Monday's vote.
Eight Republicans ultimately joined Democrats in voting for the budget plan. House Bill 2 would boost New Mexico spending to more than double what it was just eight years ago.
Specifically, the spending plan for the budget year that starts in July would increase recurring state spending by $595 million — or about 5.8% — over current levels.
More than 40% of the proposed overall state spending would be directed at K-12 public schools, including funding to raise starting teacher pay from $50,000 to $55,000 per year. Pay levels would also be increased for veteran teachers.
The House floor debate on the budget was a wide-ranging one, touching at different points on egg prices and conservation efforts to protect beavers and bighorn sheep.
But the debate over dividend checks drew some of the sharpest remarks, with Republicans saying their plan would mean a $2,400 dividend check for a family of four.
"I would trust my neighbor more on spending money that I trust the government to spend money," said Rep. John Block, R-Alamogordo.
Democratic lawmakers have supported returning some of the state's revenue windfall to taxpayers in the form of rebates as recently as 2023, when the state issued $500 rebates to taxpayers.
But some Democrats have since changed their tune on rebates, with Senate Finance Committee Chair George Muñoz, D-Gallup, saying recently he believed the rebates were largely a waste of money.
New Mexico state spending has increased steadily in recent years, as revenue levels have surged to record-high levels due largely to an oil production boom in southeast New Mexico's Permian Basin.
The state is the second-largest oil producer in the nation — behind only Texas — and oil and gas revenue make up about 35% of the state's total revenue collections, according to legislative data.
While state spending has increased, lawmakers have also set aside millions of dollars from the revenue windfall in trust funds. The money in those funds is then invested for future use.
Looking ahead, the Senate is expected to make changes — and likely additions — to the House-approved spending plan.
Both chambers will then have to agree on a final version of the legislation in order to send it to Gov. Michelle Lujan Grisham's desk before the 60-day legislative session ends March 22.