SANTA FE, N.M. (AP) -- New Mexico's House on Wednesday gave bipartisan support to a proposed budget that will spend $5.6 billion on public education and other government programs next year, and provide for higher take-home pay for educators and state workers.
The measure heads to the Senate for consideration after clearing the House with the backing of all 70 Democrats and Republicans.
"This was a joint effort to do what is best for all New Mexicans," Rep. Henry Kiki Saavedra, an Albuquerque Democrat, said in a statement. He's chairman of the committee that assembled the budget.
The measure calls for a $215 million, or nearly 4 percent, increase in spending out of the state's main budget account in the fiscal year that starts July 1. The budget doesn't spend all available revenues, making it possible for lawmakers to cut taxes or provide more money for programs before a final agreement is reached with the Senate on the spending blueprint.
Rep. Larry Larranaga, R-Albuquerque, described it as a "very cautious" budget because of uncertainty about the state's financial outlook.
"We bring you a budget in which everybody is content and everybody is equally discontent. This is the art of compromise," said Larranaga.
The budget allocates nearly $50 million for higher government payments into public employee pensions next year, allowing worker contributions to drop by a similar amount.
That pension change will boost the take-home pay of public employees for the first time since 2008, when the state began struggling with budget shortfalls as the economy deteriorated. The budget doesn't provide for a direct salary increase for state workers, however.
To save money and help balance the budget, the Legislature last year reduced government payroll contributions for public employee pensions and workers had to offset that by putting an extra 1.75 percent of their salaries into their pension funds. However, that pension swap is to expire because state finances have improved.
The budget doesn't allocate nearly $42 million in revenues the state expects to collect next year. That money can be used by the Senate to increase spending on some programs or lawmakers can cover the cost of tax cuts proposed by Democrats and Republicans. Any tax reduction will be handled in separate legislation.
Republican Gov. Susana Martinez has proposed $55 million in tax cuts for businesses and veterans.
Saavedra said he hoped lawmakers didn't spend all available revenues because he's concerned the state might end up with less money than expected next year. Taxes and royalties on oil and natural gas production are a large source of revenue for New Mexico, and gas prices have dropped recently.
Despite such concerns, state economists recently affirmed a revenue forecast for New Mexico to collect nearly $5.7 billion next year in its main budget account.
Key provisions of the House-passed budget:
— About $2.4 billion for public schools, a 3.8 percent or $89 million increase. Schools account for the largest share of the budget, slightly more than $2 of every $5 in proposed spending. The measure finances several of the governor's initiatives, including $8.5 million to ensure students can read proficiently in early grades.
— About $756 million for higher education, a 5.5 percent or $40 million increase. The University of New Mexico will receive almost $285 million and almost $186 million will go to the New Mexico State University.
—Almost $905 million for Medicaid, which provides health care for the poor and uninsured children and services for the disabled. That's a 4.4 percent or $38 million increase. Included is $8 million to raise reimbursement rates for nursing homes to cope with federal cutbacks, which industry officials say could force some facilities to close. About a fourth of New Mexico's population receives health care through Medicaid, which is jointly financed by the federal government.
If the budget is enacted, the state expects to have reserves of $558 million at the end of the 2013 fiscal year — the equivalent of 9.9 percent of state spending. State officials consider it prudent to maintain reserves close to 10 percent to provide a cushion in case of unexpected financial problems, including a drop in revenues.
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