New Mexico’s $5.39 billion fiscal 2012 general fund budget, proposed last week by the Legislative Finance Committee, is $187 million more than the current budget but 10% less than fiscal 2009’s $6 billion spending plan.

“The committee faced the challenge of building a budget that would address needs far in excess of revenue growth,” said Rep. Luciano “Lucky” Varela, D-Santa Fe, chairman of the panel. “State spending on public schools and Medicaid had to take a big jump up to cover the loss of federal funds.”

New Mexico used more than $1 billion of federal stimulus dollars over the past three fiscal years to avoid severe cuts in state spending.

Medicaid is set to receive $854.5 million from the general fund in fiscal 2012, an increase of $253 million from fiscal 2011.

The additional Medicaid funding compensates for the end of federal stimulus assistance.

Projected general fund revenue for fiscal 2012 is $186 million more than 2011 appropriations after accounting for cuts made by former Gov. Bill Richardson through executive order.

Under the Legislature’s spending plan, the state would have a general fund ­reserve of 5%, a level that Varela said was “considered less than minimally acceptable.”

The committee’s general fund recommendation of $3.1 billion for education includes an increase of $37 million for aid to local public schools and an overall decrease of about $29 million for state colleges.

Gov. Susana Martinez has proposed a fiscal 2012 budget that trims spending by 3%.

The Legislature convened Jan. 17 for a two-month session.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.