Legislature finishes politically heated session

SANTA FE — Lawmakers adjourned Thursday in an election-year session dominated by a clash of political wills between Republican Gov. Susana Martinez and Democrats controlling the Legislature.

Key parts of the first-term governor's legislative agenda died upon adjournment, including educational initiatives and a proposal to stop New Mexico from issuing driver's licenses to illegal immigrants.

However, the governor won a last-minute victory as lawmakers agreed to a tax incentive that's a centerpiece of her plan to help create jobs and stimulate the economy. The bill provides a tax break for the construction and manufacturing industries that could cost the state about $31 million in reduced revenues over two years. Also approved was a governor-backed bill to provide a tax break for businesses that hire returning veterans.

Winning final approval was a package of measures to overhaul a scandal-plagued agency that regulates utilities, telecommunications and insurance. Voters will decide in the November general election whether to adopt the constitutional amendments, including one to establish minimum qualifications for Public Regulation Commission members. Other changes will create an independent insurance regulator and transfer the registration of corporations from the PRC to the Secretary of State's office.

Among casualties in the session was an educational proposal sought by the governor to implement a new teacher and principal evaluation system tied to student achievement. Also failing was a governor-backed measure to hold back third-graders if they can't read proficiently rather than letting them advance to the next class. Supporters said it's critical because students are at a high risk of dropping out of school if they can't read by the third grade.

Democratic opponents contended that governor's educational initiatives were conceived more as campaign slogans than as meaningful fixes to the problems schools confront in a state with one of the nation's highest rates of poverty. In particular, they argued that the plan to retain struggling students lacked the funding to provide needed intensive instruction and could end up doing more harm by holding back children early in their school career.

Lawmakers took care of perhaps the most essential piece of business by approving a $5.6 billion state budget earlier this week. However, Martinez has raised the prospect that she might veto all or parts of the spending blueprint if lawmakers fail to act on some of her tax cut measures. The budget provides for a nearly $220 million spending increase next year for operations of public schools, colleges and government programs ranging from prisons to health care for the needy.

In the final hours, lawmakers passed a measure that's dear to members of the House and Senate because it finances capital improvement projects across the state, including in the home districts of legislators. The bill provides about $30 million for a large road project in Albuquerque at the interchange of Interstate 25 and Paseo del Norte. Also approved was a bill financing nearly capital improvements for colleges, universities, senior citizen projects and libraries.

Clearing the Legislature in the closing stretch were proposals to:

• Roll back a tax increase on businesses to shore up the state's unemployment compensation fund. Rates paid by businesses will return to what were in effect last year, saving employers nearly $82 million.
• Change the public records available on the state's "sunshine portal." Names and other information about certain public employees, such as those with protective orders in domestic violence cases, could be excluded to protect their confidentiality. The website provides a list of all state workers and financial information about state government.
• Extend a tax credit for "angel investors" who help finance technology and manufacturing businesses.
• Allow voters to decide whether to make the public defender department an independent agency rather than having the governor appoint its top administrator. The agency provides lawyers for criminal defendants who can't afford them. As a constitutional amendment, the measure doesn't go to the governor for her signature. Instead, it's placed on the November ballot.

The political tug-of-war between Martinez and Democrats resembled the legislative standoffs when Republican Gov. Gary Johnson sparred with the Democratic-controlled Legislature during his two terms in 1995-2002. Unable to push through his proposals, Johnson frequently resorted to vetoing scores of bills passed by Democrats.

A stalemate over high-profile issues, such as driver's licenses for illegal immigrants, isn't without risks for Democrats in an election year. All 112 seats in the Legislature will be on the ballot. Republicans have their eye on trying to pick up seats in the House and potentially gain a majority for the first time in more than a half century. Democrats hold a narrow 36-33 majority in the House, which also has one independent.

The governor's driver's license proposal would have overturned a 2003 law allowing licenses for people without Social Security numbers, including illegal immigrants. The measure passed the House but stalled after running into stiff opposition in the Senate, just as it did last year.