UPDATED: N.M. Budget Deficit Estimated at $452M

 

SANTA FE — New Mexico’s financial problems are larger than expected, with a budget shortfall of at least $452 million next year, according to a new estimate by Gov. Bill Richardson’s administration.

The gloomier budget outlook adds to the headaches for Republican Gov.-elect Susana Martinez, who takes office in January.

Finance and Administration Secretary Dannette Burch outlined the latest budget shortfall estimate to The Associated Press, calling it “daunting.”

“It’s going to be a challenge for both the Legislature and the new administration to tackle,” said Burch.

The latest budget information sparked a sharp exchange between Martinez and the Richardson administration, which had mostly remained silent during the campaign when Martinez repeatedly criticized the Democratic governor and his policies.

Martinez said Thursday the higher shortfall figure “confirms our suspicions” that the Richardson administration “has been hiding the ball all along with respect to the true budget deficit.”

Richardson’s deputy chief of staff Gilbert Gallegoes fired back, saying “it’s not surprising that Susana Martinez doesn’t understand the state budget and the growth of Medicaid since she ignored it during the campaign and has not yet accepted our offer for a thorough briefing.”

Richardson’s administration had prepared the latest budget shortfall estimate to provide the Martinez transition staff with an up-to-date and broad picture of the state’s financial problems.

Much of the shortfall is attributed to federal stimulus money, which New Mexico used to pay for programs, such as public schools and Medicaid. The federal aid is drying up and won’t be available in the next budget year, which starts July 2011 and runs through June 2012.

“I think everybody thought … that state revenues would recover around the time these funds started going away. And it’s obvious that’s not happening right now. I think no one anticipated the recession would be as deep as it was,” Burch said.

The Legislative Finance Committee has estimated that New Mexico will be at least $260 million short of what’s needed next year for a no-growth budget to maintain current services. The committee used a different approach in making its estimate than the administration.

The legislative committee assumed that laws will be enacted next year to continue about $90 million in savings that helped to balance previous budgets, such as requiring government workers to pay a greater share of pension contributions as the state lowered its payments.

The administration’s budget shortfall estimate does not make those assumptions because the budget-balancing measures expire unless the Legislature and next governor renew them.

The Richardson administration’s figures also include higher costs for Medicaid next year based on up-to-date projections and there’s about $35 million in growth in spending for agencies for rising insurance and other expenses. In comparison, the committee’s budget shortfall estimate assumes that agencies will find ways to absorb inflationary costs next year.

Under the current budget, the state expects to spend about $5.6 billion this year. Almost $400 million of that is federal economic stimulus money.

Medicaid, which provides health care for about one-fourth of the state’s population, accounts for the largest piece of the budget shortfall — nearly $397 million, according to the administration. The program covers the poor and uninsured children.

Martinez has pledged to protect Medicaid and public schools from budget cuts when she takes office. Those programs account for nearly 60 percent of state spending this year.

The incoming governor also has promised not to increase taxes.

“The long-term solution to our budget crisis is to get our economy moving again and that is why I will oppose efforts to raise taxes,” Martinez said Thursday. “We must put an end to the financial shell games that have been played for far too long.”

“Susana Martinez can go with the Legislature’s assumptions,” Gallegoes said. “That’s her choice. But she can’t keep her unrealistic promises and still balance the budget.”

Martinez said at a news conference this week that her transition staff is starting to work on budget issues and they plan to meet with Richardson administration budget officials.

The Legislature convenes Jan. 18 and the new governor will be required to submit budget recommendations to lawmakers before the 60-day legislative session begins.

 

Thursday, 11 November 2010 16:20

 

SANTA FE — New Mexico’s financial problems are larger than expected, with a budget shortfall of at least $452 million next year, according to a new estimate by Gov. Bill Richardson’s administration.

The gloomier budget outlook adds to the headaches for Republican Gov.-elect Susana Martinez, who takes office in January.

Finance and Administration Secretary Dannette Burch outlined the latest budget shortfall estimate to The Associated Press, calling it “daunting.”

“It’s going to be a challenge for both the Legislature and the new administration to tackle,” said Burch.

Martinez said Thursday that the higher shortfall figure “confirms our suspicions” that the Richardson administration “has been hiding the ball all along with respect to the true budget deficit.”

Richardson’s administration had prepared the estimate to provide the Martinez transition staff with an up-to-date and broad picture of the state’s financial problems.

Much of the shortfall is attributed to federal stimulus money, which New Mexico used to pay for programs, such as public schools and Medicaid. The federal aid is drying up and won’t be available in the next budget year, which starts July 2011 and runs through June 2012.

“I think everybody thought … that state revenues would recover around the time these funds started going away. And it’s obvious that’s not happening right now. I think no one anticipated the recession would be as deep as it was,” Burch said.

The Legislative Finance Committee has estimated that New Mexico will be at least $260 million short of what’s needed next year for a no-growth budget to maintain current services. The committee used a different approach in making its estimate than the administration.

The legislative committee assumed that laws will be enacted next year to continue about $90 million in savings that helped to balance previous budgets, such as requiring government workers to pay a greater share of pension contributions as the state lowered its payments.

The administration’s budget shortfall estimate does not make those assumptions because the budget-balancing measures expire unless the Legislature and next governor renew them.

The Richardson administration’s figures also include higher costs for Medicaid next year based on up-to-date projections and there’s about $35 million in growth in spending for agencies for rising insurance and other expenses. In comparison, the committee’s budget shortfall estimate assumes that agencies will find ways to absorb inflationary costs next year.

Under the current budget, the state expects to spend about $5.6 billion this year. Almost $400 million of that is federal economic stimulus money.

Medicaid, which provides health care for about one-fourth of the state’s population, accounts for the largest piece of the budget shortfall — nearly $397 million, according to the administration. The program covers the poor and uninsured children.

Martinez has pledged to protect Medicaid and public schools from budget cuts when she takes office. Those programs account for nearly 60 percent of state spending this year.

The incoming governor also has promised not to increase taxes.

“The long-term solution to our budget crisis is to get our economy moving again and that is why I will oppose efforts to raise taxes,” Martinez said Thursday. “We must put an end to the financial shell games that have been played for far too long.”

Martinez said at a news conference this week that her transition staff is starting to work on budget issues and they plan to meet with Richardson administration budget officials.

The Legislature convenes Jan. 18 and the new governor will be required to submit budget recommendations to lawmakers before the 60-day legislative session begins.

 

 

 

Thursday, 11 November 2010 14:42

 

SANTA FE — New Mexico’s financial problems are larger than expected, with a budget shortfall of at least $452 million next year, according to a new estimate by Gov. Bill Richardson’s administration.

The gloomier budget outlook adds to the headaches for Republican Gov.-elect Susana Martinez, who takes office in January.

Finance and Administration Secretary Dannette Burch outlined the latest budget shortfall estimate to The Associated Press, calling it “daunting.”

“It’s going to be a challenge for both the Legislature and the new administration to tackle,” said Burch.

Much of the shortfall is attributed to federal stimulus money, which New Mexico used to pay for programs, such as public schools and Medicaid. The federal aid is drying up and won’t be available in the next budget year, which starts July 2011 and runs through June 2012.

“I think everybody thought … that state revenues would recover around the time these funds started going away. And it’s obvious that’s not happening right now. I think no one anticipated the recession would be as deep as it was,” Burch said.

The Legislative Finance Committee has estimated that New Mexico will be at least $260 million short of what’s needed next year for a no-growth budget to maintain current services. The committee used a different approach in making its estimate than the administration.

The legislative committee assumed that laws will be enacted next year to continue about $90 million in savings that helped to balance previous budgets, such as requiring government workers to pay a greater share of pension contributions as the state lowered its payments.

The administration’s budget shortfall estimate does not make those assumptions because the budget-balancing measures expire unless the Legislature and next governor renew them.

The Richardson administration’s figures also include higher costs for Medicaid next year based on up-to-date projections and there’s about $35 million in growth in spending for agencies for rising insurance and other expenses. In comparison, the committee’s budget shortfall estimate assumes that agencies will find ways to absorb inflationary costs next year.

Under the current budget, the state expects to spend about $5.6 billion this year. Almost $400 million of that is federal economic stimulus money.

Medicaid, which provides health care for about one-fourth of the state’s population, accounts for the largest piece of the budget shortfall — nearly $397 million, according to the administration. The program covers the poor and uninsured children.

Martinez has pledged to protect Medicaid and public schools from budget cuts when she takes office. Those programs account for nearly 60 percent of state spending this year.

The incoming governor also has promised not to increase taxes.

Martinez said at a news conference this week that her transition staff is starting to work on budget issues and they plan to meet with Richardson administration budget officials.

The Legislature convenes Jan. 18 and the new governor will be required to submit budget recommendations to lawmakers before the 60-day legislative session begins.

“The first thing we have to do is balance the budget,” Martinez said. “The New Mexico Constitution requires us to balance the budget, so we have to tackle that between now and the session ending. So there is no rest for that one issue.”

 

 

 

 

Thursday, 11 November 2010 13:42

 

SANTA FE — The top financial official in Gov. Bill Richardson’s administration estimates New Mexico faces a budget shortfall of at least $450 million next year, which is larger than previously projected.

The worsening budget outlook adds to the problems confronting Republican Gov.-elect Susana Martinez, who takes office in January.

Finance and Administration Secretary Dannette Burch outlined the latest budget shortfall estimate to The Associated Press. The figures include higher Medicaid costs and some growth in spending for agencies for insurance and other expenses next year.

The Legislative Finance Committee has estimated that New Mexico is at least $260 million short of what’s needed next year to maintain current services. The LFC uses a different approach in making its estimate than the administration.

 

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