Governor has until Nov. 12 to consider legislative measuresWhen legislators meet for their regular session in January, they must come to grips with a projected $1 billion deficit in a $5.5 billion spending plan. They moved money around and made some cuts in October to trim as much of a $650 million deficit as they could. Among others, Sen. Peter Wirth, D-Santa Fe, voted for the budget bill that passed.
Included in the budget bill, legislators told Gov. Bill Richardson to cut 102 “political hires,” employees who work at the pleasure of the governor. The average salary of those employees is $105,000. That’s a potential savings of $10 million. “We have too many exempt employees, many hired by the governor,” said Rep. Jeannette Wallace, R-Los Alamos, who represents parts of Santa Fe County. “We do need to reduce that number.” Wallace said she’s “just a little grumpy after the worst session I have ever seen.” She predicts many tax bills will be introduced in January, “which ones I may or may not vote for will depend on many things, including whether we are looking at bills such as increased alcohol or cigarettes, business incentives, large corporations, personal income tax, taking away the food exemption (and more). “We all have to remember tax increases are not quick fixes,” she said. “The money comes in over a period of time, and if we need to cut another possible $500 million, we still may do cuts.”
“Critical services”
The Legislature’s bill cut spending, including a $16 million cut to the Medicaid program, although the Medicaid cuts were offset by an increase in a federal match given to New Mexico, Wirth said. Richardson sees the budget bill differently. “While the Legislature made minimal cuts to education, legislators targeted state agencies under the control of the governor for the most drastic cuts,” Richardson said in a statement. “That means critical services will be cut.” To augment their argument regarding cuts to critical services, the governor’s staff released a statement from Acting Human Services Secretary Katie Falls. She said the budget bill would slash services such as children’s health care; behavioral health care; health care for developmentally disabled people; those who are medically fragile; those with HIV/AIDS and nutrition assistance for seniors. “These services are critical for New Mexico’s low-income residents,” Falls said. “Cuts to these programs can result in devastating consequences for New Mexico’s most vulnerable population.” Deb Denison with the New Vistas Legislative Action Team urges everyone to call Richardson at (505) 472-2200 and urge him not to cut Medicaid.
Current deficit
In their attempt to balance the budget, legislators mostly moved money from one fund to another and used one-time funds to plug holes in the budget. The bills call for numerous ways to reduce the budget shortfall: - Cutting k-12 education by nearly 2 percent. Educators had feared a cut of as much as 10 percent. But the smaller cut comes from the state paying a big annual expense for local school districts — property insurance premiums – out of a little-known state fund. It is one-time money, meaning next year school districts won’t see their premiums paid.
- Not proceeding with brick-and-mortar projects that were in the budget but that are not ready.
- Using federal stimulus money.
- Cutting most state agencies by 7 percent, including children services and state prisons.
- Spending as-yet unused state funds for certain expenses.
Richardson wants New Mexicans to contact his office with their opinions about the budget bills passed Oct. 23 by the Legislature. While $211 million in recurring cuts in the current budget bill leave the state with a structural deficit going into the 2011 budget year, “it was the best we could do with the options we were given during this session,” Wirth said. State Rep. Janice Arnold-Jones, R-Albuquerque, disagreed, saying Democrats operated behind close doors, “in the dark” to hammer out bad budget deals. “With only the smallest amount of light, everyone can see that the 2009 budget was overspent, and spending against the 2010 budget exceeds expected revenue,” said Arnold-Jones, a candidate for governor in 2010. “This type of irresponsible management and abuse of the taxpayers must stop.”
How about 2011?
What will the budget deficit be for 2011? That depends on assumptions made. Current estimates assume 7 percent growth and natural gas at $5.20. Using these numbers, the state must come up with an additional $374 million in recurring money for 2011 to balance the budget and replace one-time stimulus money it used to balance the 2009 and 2010 budgets, Wirth said. But if New Mexico’s population stays steady or decreases, the size of the deficit will go up quickly. Wirth is pushing a bill to close a corporate tax loophole which allows some multi-state corporations to avoid paying tax on income they earn in New Mexico. While the governor’s staff wouldn’t comment in the days immediately following the special session that ended Oct. 23, Richardson announced three days later that he ordered a freeze on capital outlay projects to save as much as $150 million. The freeze will apply to projects initiated by the Legislature and the governor and it will remain in place through the January legislative session when the issue can be revisited. The governor has 20 days to sign, veto or partially veto the budget bills. That time expires Nov. 12. Meanwhile, he’s looking for your input. New Mexicans can contact the Governor’s Office with their thoughts about the budget bills by e-mail:
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or by phone at (505) 476-2210. Also, the Lt. Diane Denish is asking New Mexicans to help indentify wasteful spending. She has an “Efficiency Hotline” at (505) 750-4684, and she is asking people to call in with ideas to save the state money. Contact Brad Buck at (505) 629-4408 or
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