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Saturday, October 24, 2009
Budget Bills in Gov.'s Court
By Dan Boyd And Sean Olson
Journal Staff Writers
SANTA FE — New Mexico lawmakers adjourned a seven-day special session Friday night after finishing a patchwork of bills to help cover a $650 million budget deficit and sending the plan to Gov. Bill Richardson.
The Democratic governor, who could use his veto power and call lawmakers back to work on the revenue-short $5.5 billion budget, sounded as if he already had deep reservations.
"I will take my time to carefully review the budget bills and listen to what New Mexicans have to say about these dramatic cuts to Medicaid and other services," Richardson said in a prepared statement after the state's 112 part-time lawmakers left the Capitol.
"I am also interested in hearing from state employees about the excessive cuts to state agencies," the governor said.
Richardson said cuts in education "were kept to a minimum and kept out of the classroom." He said he appreciated that the Legislature resisted political pressure to increase taxes.
"However, I am deeply concerned that protecting capital outlay projects seemed to take priority over protecting people," the governor said. "The drastic cuts to state agencies will likely lead to dramatically reduced critical services, such as Medicaid funding for behavioral health care, children's health care and programs for the elderly.
"Layoffs are also likely under the Legislature's plan."
Richardson has 20 days to act on the legislation.
The budget-balancing package was estimated to provide $526 million. Cash reserves, if needed before the end of the fiscal year, would make up the rest.
Small cuts to public education and Medicaid were included in the legislation to balance the state's $5.5 billion budget, but were whittled down to a level acceptable to most Democrats by using federal money to offset the cuts and giving school districts more financial flexibility for the rest of the school year.
State agencies would receive much deeper cuts, which union leaders said could lead to furloughing government employees.
The spending cuts passed by the Legislature would also require Richardson to eliminate 102 political hires, or exempt employees.
Only about one-third — or $206 million — of the savings carved out by legislators came from cuts in programs financed with recurring revenue dollars, or those that come in annually. The rest of the deficit was covered with one-time cash-saving maneuvers.
Legislators will probably have to replace those one-time dollars with more cuts or tax increases during the regular legislative session that begins in January.
Lawmakers estimate they will face another budget shortfall of at least $400 million for the fiscal year that begins next July, although some believe that number could grow much larger.
"We can't walk away from here tonight pounding our chests talking about how we fixed this, because it isn't fixed," said Sen. John Arthur Smith, D-Deming, chairman of the Senate Finance Committee.
Republicans in both the House of Representatives and the Senate roundly opposed the reduced scope of the budget cuts, arguing that the Legislature should do more to address what they see as a structural deficit of yearly state spending outpacing regular, incoming revenue.
"We're fooling ourselves," said Senate Minority Leader Stuart Ingle, R-Portales, after the bill passed the Senate. "We've got some hard stuff coming up in January."
Even before legislators convened in Santa Fe, Richardson and top-ranking lawmakers ruled out tax increases as a budget-balancing solution for the special session.
Self-described progressive Democrats tried to fight the ruling by introducing a slew of tax hike proposals during the seven-day session, but were ultimately thwarted in their attempt to push them through the Legislature.
However, Richardson has said he will consider tax increases to boost the state's recurring revenues during the coming regular session and will create a working group to study different possibilities.
"It's not going to be us just coming in there and raising every tax identifiable," said House Speaker Ben Lujan, D-Santa Fe.
After the House voted 37-31 late Thursday on a budget-cutting bill to slash $212 million in recurring spending, the Senate spent most of Friday debating changes to the measure.
The Senate, on a 31-9 vote, passed a revised version that reduced the amount of recurring spending cuts to about $206 million.
"We might not have solved the problem, but we worked as hard as we could work to get something done," said Senate Majority Leader Michael Sanchez, D-Belen.
"The next step is going to be even tougher when we come back in January," Sanchez said.
As for rank-and-file classified workers, public employee union leaders said they received assurances from legislators that the spending cuts to state agencies wouldn't result in widespread layoffs of employees.
"We just want to make sure no one loses their jobs," said Josh Anderson, political coordinator of American Federation of State, County and Municipal Employees Council 18, who went on to say, "There are definitely concerns that there could be at the very least furloughs."
Business leaders, who spoke out against tax increases before the special session, said they were bracing for tax hike proposals in January but largely satisfied with the special session budget package.
"These two bodies have just gone through what businesses across the board has been going through for the last six to seven months," said Terri Cole, president of the Greater Albuquerque Chamber of Commerce.
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