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Thursday, January 15, 2009
Lawmakers Discuss Budget Cuts
By Barry Massey
Associated Press
SANTA FE — Lawmakers began considering cost-cutting proposals Wednesday for closing a projected $450 million budget deficit this year and they are looking at taking almost $56 million from a rainy day fund to offset a tax rebate approved last year.
Gov. Bill Richardson and staff of the Legislative Finance Committee outlined separate plans for cutting government and public education spending, chopping state and local capital improvement projects, tapping into cash balances and collecting more revenues without a general tax increase.
The one-time rebates for lower- and middle-income New Mexicans were approved during a special session last year that Richardson called when it appeared the state would receive a revenue windfall because of high prices for oil and natural gas. However, the state's finances have deteriorated as energy prices plummeted and the national economy soured.
The Legislature convenes Tuesday.
Once lawmakers and Richardson agree on legislation to eliminate the deficit, there's still more difficult budget work to do, Smith said. There are no new revenues to pay for growth in services and programs. That means agencies and programs can expect more spending cutbacks in next year's budget.
LFC staff outlined a plan that trims $188 million in spending this year — about $80 million more than Richardson has proposed.
The LFC proposal includes a net reduction of 1 percent in Medicaid; 1 percent from public schools; reductions of 1.35 percent in the court system; and 2.5 percent cuts in other government spending.
The LFC plan also calls for scrapping $163 million in previously approved capital projects — about a $100 million less than Richardson has recommended.
Richardson and the Legislature also are looking at proposals to generate more than $100 million in revenue this year.
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