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Senate divided over budget

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Fight brews over $5.6 billion budget package

By Barry Massey

SANTA FE — A fight over spending and taxes is brewing in the Senate as lawmakers work on a $5.6 billion budget package passed by the House.

Senators are split over how much to cut the budget passed by the House and whether to go along with $300 million in tax increases that the House approved to balance its blueprint for financing public education and government programs next year.

The divisions in the Senate were on display Saturday as lawmakers were briefed by legislative staff and Gov. Bill Richardson’s administration on the House-passed budget and the state’s weak revenue outlook.

Tax increases face stronger opposition in the more conservative Senate than they did in the House. But liberal-leaning members of the Senate object to more cuts in spending to balance the budget.

“You can’t get out of this box just by cutting programs. You have to raise some revenues,” said Sen. Eric Griego, an Albuquerque Democrat.

He pointed out that tax cuts and incentives have trimmed revenues by $600 million since 2003, when Richardson took office.

“You can’t give away $600 million in revenues and then ask us to balance the budget on the backs of working families,” Griego said.

The House-passed budget provides for spending $5.6 billion in the upcoming 2011 fiscal year, which starts July 1.

That’s 1.4 percent less than what’s expected to be spent this year by state agencies, schools and colleges.

The budget also factors in more than $300 million in new revenues from tax increases, which were approved Friday by the House.

“We didn’t recommend that. The House did,” Sen. John Arthur Smith, a Deming Democrat, told his colleagues.

Smith is chairman of the committee that will handle the budget in the Senate.

The proposed tax increases represent a 6 percent in revenues from the $5.1 billion that New Mexico anticipates next year.

“It looks like the House wants to raise taxes by 6 percent and cut spending by 1.4 percent,” said Sen. Clinton Harden, R-Clovis.

Smith shot back, “That’s the resume they want to run on.”

All 70 House members are up for election this year. Senators don’t have to run for re-election until 2012.

Finance and Administration Secretary Katherine Miller told senators that Richardson favored a balanced approach to the budget with targeted spending cuts and some tax increases.

The governor recommended $200 million in additional revenues in his proposed budget sent to the Legislature. However, Richardson has not endorsed any specific tax increase proposal.

Miller said government spending has been cut by $700 million since 2009 despite a growing demand for some services, such as health care for the needy.

However, part of those cuts have been offset by federal economic stimulus money that helped pay for school operations and health care.

The House-passed budget represents a 6 percent, or $370 million, reduction from spending on education and government services last year, according to the Legislative Finance Committee.

The House-passed budget is HB2.