Archives for February 2019

TIDBITS FROM THE ROUNDHOUSE

The official tally for the number of bills introduced is this session is 1,563. 778 in the House and 785 in the Senate. This compares to 1,473 introduced at the last 60 day session in 2017. We estimate there are about 100 dummy bills dropped. What is a dummy bill? At the bill introduction deadline, several bills are introduced in each house that generally are entitled “to protect the public peace, health and welfare.” These are what are known as dummy bills. Think of them as just placeholders or a shell into which a real bill can be dropped at some point in time. They are given to the leadership of both parties and committee chairs for their use or the use of their colleagues as they see fit. Dummy bills come in very handy after the bill introduction deadline has been crossed. If something comes up for which a bill is needed, presto, stuff it into a dummy bill and it’s suddenly a smart bill. As of today, only about 10% of the bills have passed the first house and less than 3% have passed both houses, not surprising for this stage of the session, in fact, the “rocket docket” has boosted this percentage compared to previous sessions. In past sessions, about 35% of bills introduced passed their house of origin, about 12% passed both houses and about 9% actually reached the Governor’s desk (even though both houses have passed them, it may be that time ran out before concurrence in amendments could be obtained, etc.) and normally about 7.5% are signed into law. In other words, slim chances that a bill makes it to the Governor’s desk and is signed into law.

HB 31, Minimum Wage Bill was brought to the House floor late Wednesday night. The House passed the amended bill 44-26, it now goes back to committee and if it passes will head to the Senate floor. The bill would increase the statewide minimum wage from $7.50 per hour to $10 per hour on July 1, 2019; to $11 per hour on July 1, 2020, and; to $12 on July 2, 2021. Beginning on July 1, 2022 and every year thereafter, the wage would be adjusted upwards based on the consumer price index for urban areas (CPI-U). Wages would not fall should the cost of living decline year over year. It also includes that tipped wage earners would be raised to $5.00 per hour July 2019 with increment adjustments until July 2022, when all tipped employees shall not be paid less than the minimum wage rate. SB437 would raise the minimum wage to $10 per hour by 2020 with no indexing and create a separate minimum wage for high school students. This bill has not yet been scheduled to be heard.

RECREATIONAL CANNABIS LEGALIZATION GETS GREEN LIGHT BY HOUSE HEALTH AND HUMAN SERVICE COMMITTEE ON A VOTE OF 5-2

HB 356, was given the green light by the House Health and Human Service Committee on a vote of 5-2, D’s in favor, R’s opposed. The bill next moves to the House Judiciary Committee. What the bill does. The bill is a 140-page product that would legalize the recreational use of cannabis and establish a regulatory framework for licensing and taxation. While 140 pages, there are still many issues to be dealt with. Here is a summary of the bill: Persons must be 21 in order to purchase and consume cannabis or to work in the industry. A 9% state excise tax is imposed at the retail level but does not apply to medical cannabis sales. Cities and counties may each impose up to a 3% excise tax. By 2023, $33.9 million of state revenue would be generated and $22.2 million of local government revenue if all local governments imposed the maximum tax rate. In addition, the gross receipts tax is applicable. State revenues are distributed to several funds to help medical users, to do research on use, to local DWI programs, community reinvestment and the balance to the general fund. The Regulation and Licensing department bears the burden of determining those qualified for licenses and issuing licenses. A new Cannabis Control Division is created in the department, which also would regulate health and safety standards, advertising and packaging, quality control, etc. Licenses would be issued January 1, 2021. Local governments may control hours of operation and place of operation rules and may prohibit local sales at the retail level. Personal possession and consumption is limited to two ounces of cannabis or 16 grams of extracts. Different types of licenses are to be issued for cannabis: couriers, testing laboratories (which can hold no other license), manufacturers, micro-businesses, producers, retailers and personal producers. For conduct allowed under this act or the medical cannabis act, employers may not take adverse employment actions against an employee not acting in a safety-sensitive position but does not require an employer to commit any act in violation of federal law. Workplaces must have signs posted of potential impairment effects of cannabis.

AFTER LENGTHY DEBATE, HOUSE VOTES TO TAP PERMANENT FUND

HJR 1, was approved by the House Friday night by a vote of 41-27. The measure, which is a proposed constitutional amendment, now goes to the Senate for further consideration. If approved by the Senate, the proposed amendment would be submitted to voters for their consideration in 2020. The Governor has no formal role in the enactment of constitutional amendments but has indicated her strong support for this measure.

Pros

Proponents want to draw down an additional $150 million a year for expenditure on early childhood programs. They argue that there’s plenty of money in the fund and that New Mexico’s children need the money now. By paying for early childhood services, they assert that money will be saved in the long run from less crime, less public assistance and increased economic activity from a better educated workforce.

Cons

Virtually no one opposes increased funding for early childhood services and the Legislature has increased funding to over $300 million for this purpose over the last several years. In this session, it’s likely that hundreds of millions more could be added. The debate, therefore, is not about the value of early childhood programs but rather the method of funding. Those who oppose the measure believe that reducing the growth of the permanent fund that supports public and higher education is not the right course to pursue.

How the Permanent Fund works

The Land Grant Permanent Fund (LGPF), also known as the school permanent fund, receives revenues from oil and gas production, which are invested to provide ongoing financial support for public and higher education, providing some $800 million per year. Under the current state constitution, the annual payout is 5% of the average of the last five years value of the fund. HJR1 would increase that payout to 6% per year. The philosophy behind the fund is to maintain a financial reservoir that will forever grow and provide money for education, long after natural resources like oil and gas, are gone. Countless financial advisers have determined that a 5% payout rates is the maximum prudent payout rate – higher rates of payout will drain the reservoir over time.

SENATE COMMITTEE ADVANCES BILL TO CHANGE SCHOOL GRADING SYSTEM

SB 229, known as the School Support and Accountability Act, would replace the A-F system with a new “dashboard” to present data about student performance (and other factors) at schools across the state. The State Department of Education is also proposing to end the A-F grading system by administrative action as part of revisions to the state’s Every Student Succeeds Act plan, which must be approved by the US Department of Education. Having already passed the Senate Education Committee, a bill that would replace the state’s current school grading system passed unanimously out of the Senate Public Affairs Committee Friday afternoon.

The official tally for number of bills introduced is 1,563, 778 in the House and 785 in the Senate. This compares to 1,473 introduced at the last 60 day session in 2017. We estimate there are about 100 dummy bills dropped. You can think of dummy bills as just placeholders or a shell into which a real bill can be dropped at some point in time. These are given to leadership of both parties and committee chairs for their use or the use of their colleagues as they see fit. Dummy bills come in very handy after the bill introduction deadline has been crossed. In case something comes up for which a bill is need, presto, stuff it into a dummy bill and it’s suddenly a smart bill (we guess that would be the alternative).

MAJOR EDUCATION LEGISLATION ADVANCES IN HOUSE – CHARTER SCHOOLS VOICE CONCERN ABOUT FUNDING CHANGES

SB1 the Senate’s attempt to respond to the district court ruling in what is known as the Yazzie/Martinez lawsuit. The court found that New Mexico was not sufficiently funding its public school system. Addressing this court ruling is one of the key tasks ahead of the Legislature this session.

HB 5, the House version of the bill, was considered by the House Education Committee in a special hearing held in the House Chamber. Like SB 1, the House legislation has a number of elements – an across-the-board pay increase for teachers, counselors, and principals; an increase in the minimum salaries for each educator license level; an increase in funding for programming that extends the school year for grades K through 5; and adjustments to the school funding formula to provide more funding for at-risk students – all these provisions directly address elements of the district court’s ruling.

These elements have broad support and are likely to proceed quickly through the legislature, though concerns were raised about the adequacy of the nearly $500 million in the LFC budget proposal to cover the bill’s requirements.

However, not everything in HB 5 attracts broad consensus. For example, the measure contained a charter school enrollment cap that was stripped out of SB 1 after concern from charters, families, and the Chamber during that bill’s hearing in Senate Education. Thankfully, the sponsors of HB 5 heard that concern as well and removed this onerous cap also.

There’s another controversial issue, not directly related to the Yazzie ruling, included in this education package. The bill proposes to phase out the small school size adjustment in the school funding formula for mostly non-rural schools. This would take away a funding mechanism that helps small schools and districts compensate for not having the economies of scale that the larger districts in the state enjoy. It also is what supports many charter schools – and charter schools are not happy.

Since the hearing was held on a Saturday, many charter school leaders were able to attend the hearing and express their concern about the impact that losing small school size adjustment funding would have on their schools. Several, stated that their school would not be able to survive without this funding.

Despite these objections, the bill passed out of the committee on a 9-2 vote, and now heads to House Appropriations and Finance (HAFC) for alignment with the budget bill. From HAFC the bill would go nest to the House Floor. Meanwhile, SB 1 is sitting in the Senate Finance Committee. Both HB 5 and SB 1 are the outgrowth of interim committee work by both the Legislative Finance Committee and the Legislative Education Study Committee. We would not expect to see either measure move much further until the budget is resolved by both houses.

For those interested and want to search for and keep up with bills, watch live webcasts, find committee schedules, contact information for legislators, etc. etc. visit New Mexico Legislation. Further, if there are bills you would like the Chamber to follow, for or against, please email Jo at manager@angelfirechamber.org.