Benefits January 10, 2011

Lawmakers Propose Increase in NM Workers’ Pension Contributions

January 10, 2011 (PLANSPONSOR.com) - New Mexico’s state Legislative Finance Committee has put forth a proposal to balance next year's budget in part by requiring government workers to contribute more to their pensions.
Reported by

The Associated Press reports that under the pension change, government workers and educators would contribute an extra 1.75% of their salaries. The panel said the pension change — intended to be in effect for just one year — would save nearly $50 million. 

According to the AP, a similar 1.5% pension shift was enacted in 2009, and the committee’s budget assumes that will continue next year.  

Lawmakers said the pension contribution change would be less painful to workers than unpaid furloughs, layoffs or a permanent salary cut.  

The Legislative Finance Committee wants to cut state spending by an average of 3.5%. It recommended spending $5.4 billion next year on public schools, higher education and general government programs ranging from prisons and courts to health care for the needy, according to the news report.  

No tax increase would be needed to balance the budget under the committee’s plan.

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