Spending on Social Welfare Programs in Rich and Poor States. Final Report.. State Budget Development and Implementation

07/01/2004

New Mexico's budget cycle begins with the executive budget agency sending funding targets to state agencies for their budget requests. The executive budget proposal typically includes agency budget recommendations by functional category. The Legislative Finance Committee, the fiscal arm of the state legislature, releases its budget proposal at the same time the governor releases the executive proposal. The executive budget agency and staff of the Legislative Finance Committee present their budget proposals to members of the state legislature in public hearings. State legislators then negotiate and pass a budget bill that is sent to the governor for signature.

Several characteristics of New Mexico's budget process provide the governor significant authority in budget development. Many state officials cited the governor's line item veto authority, which in New Mexico includes the ability to veto selected lines and items in any bill that appropriates funds, as the primary source of the governor's authority. For Governor Johnson, New Mexico's governor from 1995 to 2003, this authority was enhanced by his ability to sustain vetoes from legislative overrides. Johnson vetoed more than 700 bills while in office, including budget bills and social welfare proposals. Several state officials interviewed characterized Johnson as a "fiscal conservative" who used his veto authority to suppress social welfare spending. For example, the governor vetoed a 2002-03 budget bill because it did not sufficiently control Medicaid spending, among other reasons.

New Mexico's treatment of federal funds in the budget process also provides the state's governor increased authority over spending decisions. New Mexico is one of few states that does not appropriate all federal funds, thus limiting the legislature's ability to influence spending decisions. Additionally, the governor has authority to spend unanticipated federal funds without the legislature's approval.

The New Mexico Human Services Department administers the state's TANF, Medicaid, and SCHIP programs. Other public welfare programs such as child care, child welfare, adoption, and foster care are administered by the Children, Youth and Families Department, a separate state agency.

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