April 8, 1999

The Honorable Raymond G. Sanchez and

Members of the House of Representatives

Executive-Legislative Building

Santa Fe, New Mexico 87503

Honorable Speaker and Members of the House:

I have this day VETOED and am returning HOUSE BILL 255, as amended, HOUSE BILL 256, as amended and HOUSE BILL 857, as amended, enacted by the Forty-Fourth Legislature, First Session, 1999.

These bills were intended to address unmet needs for construction and maintenance of public school facilities. As a prerequisite to a major increase in state investment in public school infrastructure, I believe that the legitimate needs of local districts should be rigorously identified and carefully documented. This has not yet occurred. Secondly, I believe that the responsibility for improving public school infrastructure should by shared more equitably by local districts as well as the state. Finally, I believe that state aid should be granted to school districts that are not able to raise sufficient funds locally and that have serious infrastructure deficiencies.

In the case of House Bill 255, the bill provides for supplemental severance tax bonding capacity. However the appropriations for school capital outlay did not increase as a result of the increased borrowing authority contained in this bill. The appropriations, which presumably would have been forthcoming from conventional severance tax bonds, were simply moved to supplemental bonds. Therefore, it appears that the primary effect of this bill would have been to increase public debt incurred for non-school projects.

House Bill 256 would have amended the Public School Capital Outlay Act to allow all school districts to participate in the "critical capital outlay" program. This bill does not improve on the existing program that requires local tax effort and a rigorous justification of proposed projects. Regardless of the merits of the bill, it would have substantially increased demands on the critical capital outlay program without a commensurate increase in appropriations.

House Bill 857 would transfer a portion of the Motor Vehicle Excise tax from the General Fund to the New Mexico Finance Authority for public school infrastructure finance. This legislation would reduce general fund revenue, from which public schools derive the vast majority of their operating funds. Existing infrastructure programs should be adequately funded before establishing new ones.

Sincerely,

Gary E. Johnson

Governor