The New Mexico Supreme Court on Thursday rejected a request to override budget vetoes, leaving negotiations about how to solve the state's budget crisis — and restore funding to the Legislature — in the hands of the governor and lawmakers.
In a two-page order, the court said it was too soon to consider any possible constitutional violations related to Gov. Susana Martinez's vetoes of all funding for the Legislature and state universities in the coming fiscal year.
The order said the Legislature's lawsuit was "not ripe for review," siding with attorneys for the governor who cautioned justices against an abuse of their judicial power.
The Republican governor has called a special session for May 24 in an attempt to resolve the state budget crisis linked to faltering tax revenues and a weak state economy.
The Democratic-led Legislature had argued that Martinez overstepped her authority by defunding the legislative branch of government and all state institutions of higher education.
Martinez had urged the state Supreme Court to stay out of budget negotiations and said her vetoes were made in pursuit of reductions to state spending and never sought to abolish the Legislature.
Thursday's ruling sent lawmakers and the governor back to the negotiating table with no signs of agreement on how to shore up wobbly state finances.
"We need to have a little love, and there is not much love going around right now," said Republican Sen. Bill Sharer, R-Farmington, describing distrust that stands in the way of a budget deal and related tax reforms.
For the upcoming special session, Martinez has outlined rough proposals to restore most vetoed funding for the fiscal year starting July 1. Democratic lawmakers say the proposals are linked to untenable tax revenue increases on nonprofits and food.
The governor's office issued a statement praising the court decision and prodding legislative leaders to abandon a proposed tax increase on gasoline sales designed to shore up state finances.
"They want to raise gas taxes, and she is the only one standing in their way," the governor's office said. "Having been rebuffed by the court, the governor hopes Democratic legislators will now come to the table and actually negotiate in good-faith."
Martinez recently has indicated a willingness to raise some taxes — including reinstatement of taxes on groceries — to avoid further state spending cuts, but only if lawmakers agree to reforms that do away with a variety of tax breaks and lower the state's overall gross receipts tax rate on sales and business services.
Leading Democrats renewed criticism of the governor's vetoes and cast blame on her for the budget stalemate.
In a statement, Senate President Mary Kay Papen and House Speaker Brian Egolf said the vetoes "have created unprecedented instability in our economy."
In mid-March, lawmakers sent Martinez a budget package that would slightly boost state general fund spending to $6.1 billion and included several tax and fee increases. She rejected the tax hikes, while also signing line-item vetoes that scratch funding for the legislative branch and cut $745 million in annual general fund spending to state universities, community colleges and specialty schools.
The simmering feud over New Mexico's budget shortfalls has triggered tuition increases at several public state colleges, layoffs at museums and a shortage of public defenders.
State university presidents warned the Supreme Court that the budget impasse already has caused harm by frightening off prospective students and undermining efforts to recruit faculty and research scientists.
A hiring freeze is in place at most state agencies, and Martinez has ordered them to draw up plans for possible unpaid staff furloughs, citing thin cash reserves.