On Wednesday, the Senate Finance Committee (SFC) heard from both the Legislative Finance Committee (LFC) and Department of Finance and Administration (DFA) on their respective budget recommendations for the coming year. Legislators will use these as baselines when crafting the FY 15 state budget.
Going straight to the bottom line, committee members wanted to know the differences between the two recommendations. The biggest is compensation, with the LFC recommending a 1.5 percent increase across the board. The Executive (DFA) takes a targeted approach which does not provide any pay increase for approximately two-thirds of state employees, including those in higher education. In response to committee questions, DFA Secretary Tom Clifford said it was difficult to justify a pay increase for state employees when private sector pay remains flat.
The LFC recommendation features about $25 million more for higher education overall, which includes compensation. While both recommendations cover the shortfall in lottery scholarship funding for this spring, the DFA provides a bigger cushion, to give reforms to the lottery program time to kick in by the fall. Secretary Clifford did say the Governor “was supportive of the direction the LFC is going” in recommending reforms like a higher GPA and scholarship caps.
A joint hearing of Senate Education and House Education heard this afternoon from Education Retirement Board Director Jan Goodwin. As you know, the big ERB battles occurred last session and over the summer, so there was blissfully little new to report.
Goodwin noted that there is $10.7 billion in the fund, which is an all-time high. She also reviewed the NM Supreme Court’s unanimous opinion last December that said the Legislature can legally make changes to the COLA as necessary. In addition, there has been no dramatic increase in retirements as yet noted due to ERB changes, but it is still early in the year.
Both the LFC and DFA have funded the .75 percent employer contribution for FY 15.
HAFC, SFC and the Education committees will meet for the rest of the week. The session begins next Tuesday.