Democrat questions budget item veto

SANTA FE – A top-ranking Democratic lawmaker has called into question Gov. Susana Martinez’s approach to an accounting problem that has made balancing New Mexico’s checkbook a difficult proposition.

Rep. Luciano “Lucky” Varela, D-Santa Fe, said he is concerned by the Republican governor’s line-item veto of language in this year’s budget bill that would have allowed the Department of Finance and Administration to address the ongoing problem by adjusting the state’s reserve levels downward by as much as $70 million.

“We may want to take a look at that,” Varela said of Martinez’s decision last week to strike the language out of the budget bill.

Varela, vice chairman of the influential Legislative Finance Committee, said the executive branch generally needs legislative approval to make adjustments to the cash reserves.

However, Martinez administration budget officials said this week that the authorization was unnecessary, because the state is not technically spending money to address the cash reconciliation issue.

In addition, Finance and Administration Secretary Tom Clifford told the Journal the $70 million reduction to the state’s cash reserves was already entered into the state’s financial books for the 2012 fiscal year, which ended in July.

Although more adjustments to the reserves – which are projected to exceed $600 million for the coming budget year – might have to be made, Clifford said the approach taken by the Martinez administration puts the state on more firm fiscal footing moving forward.

“We came to the conclusion that there was a likelihood that our books were overstating how much cash was on hand,” Clifford said.

The DFA has blamed poor implementation of a new state computer program in 2006 for the cash reconciliation problem, which has led to discrepancies between the state’s general ledger and records maintained by the Treasurer’s Office. State budget officials have worked in recent months to try to match up the entries.
— This article appeared on page C01 of the Albuquerque Journal