ALBUQUERQUE, N.M. — Governor-elect will use the proposals from the agencies in preparing her budget recommendations that will go to the Legislature
SANTA FE — Republican Gov.-elect Susana Martinez has asked state agencies for proposals to cut “low priority” programs and save 10 percent in their budgets as a way to eliminate a budget deficit projected to potentially top $400 million next year.
The Martinez transition team made the request last week in a directive to agencies, boards and commissions, a copy of which was obtained by The Associated Press. The proposals for cutbacks will provide policy options for Martinez to use in preparing budget recommendations that will go the Legislature soon after she takes office next month.
“Gov.-elect Martinez believes it is important that state government look for ways to become more efficient, and setting priorities is part of that process,” Martinez spokesman Danny Diaz said Tuesday. “This exercise is one aspect of the transition review and does not mean these programs will necessarily be eliminated. This portion of the review ensures agencies are thinking critically about how to best spend taxpayer dollars and gives them input into which programs should be prioritized.”
Diaz reiterated that Martinez wants to “protect core functions like classrooms and basic health care spending for those most in need,” which is provided through Medicaid. She also opposes tax increases to balance the budget.
The request for cutback proposals excludes colleges and universities, the judiciary, the Legislature, and independently elected state offices, such as the attorney general.
The governor must submit budget recommendations to the Legislature by Jan. 10. A top assignment for lawmakers is approving a budget to pay for public education and general government in the 2012 fiscal year, which starts next July.
Sen. John Arthur Smith, a Deming Democrat and vice chairman of the Legislative Finance Committee, said 10 percent budget cuts are a “realistic scenario” if Martinez sticks to her campaign promises of safeguarding public schools and Medicaid, and taxes aren’t increased.
“That might even be a little light, but it could be in that ballpark,” Smith said.
The state is spending about $5.2 billion this year. Schools and Medicaid account for almost 60 percent of that, leaving about $2.2 billion for the rest of government, including higher education, courts, and programs ranging from prisons and law enforcement to tourism and environmental regulation.
A 10 percent spending reduction in all of government except schools and Medicaid would provide enough savings to eliminate a $215 million revenue shortfall projected by the finance committee. Cuts of nearly twice that amount would be needed to wipe out a $450 million shortfall forecast by Gov. Bill Richardson’s administration.
The LFC’s projection assumes a no-growth budget and passage of legislation to continue more than $70 million in budget-balancing steps used this year, such as allowing the state to trim its pension contributions while workers pay more. The administration has said the shortfall could exceed $400 million if those cost-cutting steps aren’t continued and budget increases are provided for Medicaid, schools and other programs for inflation and expected growth in services.
Agencies are to submit their annual budget requests to the Department of Finance and Administration. To prepare for that, the Richardson administration had told agencies to provide “no growth” budget proposals that would freeze spending at current amounts.
The directive from the Martinez transition team made clear that additional savings will be needed. It told agencies to consider whether “programs are core or essential to the agency’s mission” and whether programs are required by state law.
Agencies are to provide “the goals and activities associated with each program that has been identified as a low priority program, as well as a description of the programmatic impact if the suggested budgetary savings recommendation was actually implemented,” the directive said.
New Mexico faces a budget deficit in part because the state is using nearly $370 million in temporary federal aid to pay for schools and Medicaid this year and the money won’t be available next year. State revenues are projected to grow about 4 percent next year but that’s not enough to offset the loss of the federal economic stimulus aid.