The House approved the financial blueprint on a 53-16 vote on Thursday, and sent it to the Senate for consideration. Only Democrats voted against the bill.
The measure will allocate nearly $5.9 billion for public schools, colleges and state government programs—ranging from prisons to health care—in the fiscal year starting in July. That's an increase of 4.2 percent, or $239 million.
The budget leaves $19 million available for additional increases by the Senate and to offset possible tax cuts. The governor has proposed $47 million in tax reductions next year, including cutting the corporate income tax rate.
The largest share of the budget—nearly $2.6 billion or a 4.6 percent increase—will go for public schools, the Public Education Department and other educational programs.
Several Democrats objected to the proposed education spending.
"You can't come up here without someone having some type of reform. I wish we would throw out that word because what we need more than reform is sufficient funding. We have been starving these schools since '09," said Rep. Mimi Stewart, an Albuquerque Democrat and chairwoman of the Education Committee who voted against the budget.
The measure provides $3 million for a pilot program of merit pay to reward high-performing teachers. The governor had requested $11 million for the pay incentives.
"The idea of merit pay implies that the teacher force is withholding good teaching until they're being given more money, and I think it's so wrong," said Rep. Christine Trujillo, an Albuquerque Democrat who is retired educator.
Rep. Don Tripp, a Socorro Republican, defended the proposal.
"I know there is some heart burn with the merit pay for teachers and I agree that we don't have enough to reward everyone that's doing a good job but we have to start somewhere. So I think the fact that we have any money in there for the merit pay is probably one of the most important things I've seen put in the budget in many, many years," Tripp said.
The House trimmed money for several of the governor's educational initiatives. Lawmakers provided $11 million to help students with reading problems in early grades but the governor wanted $13 million. The budget allocates $4 million to help struggling schools although Martinez recommended $4.7 million.
The bill will increase state aid for special education by $12 million next year and authorizes an additional $20 million if needed to help resolve a dispute with the federal government.
Stewart said that may not be enough to prevent losses of federal aid for special education. New Mexico potentially ran afoul of federal requirements for maintaining special education services when lawmakers cut state aid to public schools to help balance the budget in 2010 and 2011 when the New Mexico economy soured.
The budget provides about $35 million for 1 percent pay raises for state workers and educators and 3 percent for state police. It will be the first across-the-board salary increase for public employees since 2008.
The governor did not recommend pay raises for educators or government workers in her spending recommendations to the Legislature.
"Gov. Martinez's priorities are to keep our fiscal house in order, while investing in education reform and tax reform to create more jobs," said spokesman Enrique Knell. "The budget passed by the House represents a bipartisan compromise toward achieving our shared goals."
Besides money for yearly government operations, the budget allocates nearly $109 million to supplement agency budgets or finance one-time projects. About $20 million is for road improvements statewide, $6.5 million for legal costs to defend New Mexico's water rights, $2.4 million for state police cars, $2.4 million for a new teacher and principal evaluation system and $6 million for economic development programs.
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