Editorial: Another 9-figure shortfall requires a special session - Albuquerque Journal

Editorial: Another 9-figure shortfall requires a special session

“State government is spending more money than it is taking in, and by law, we cannot do that.”

– Sen. John Arthur Smith, Finance Committee chair

State expenditures from July 2015 to July 2016 have exceeded revenue by $600 million.

– State Treasurer Tim Eichenberg

While New Mexicans depend on their leaders to remain cool, calm and collected in a crisis, when oil and gas prices drop to the point that the state burns through $400 million in cash reserves in one budget year and takes those reserves down to just $63 million, it sure looks like it’s time for a serious family discussion about finances around the kitchen table.

Smith, D-Deming, warned last week that despite burning through much of our reserves the state is still facing a $150 million-plus deficit for the budget year that ended June 30, and a $300 million to $500 million deficit next budget year. He says a special session is in order – as early as next month.

Republican Gov. Susana Martinez is right to emphasize any move be “cautious, diligent and responsible” because taxpayers will have to live with it, but deciding sooner rather than later how to cover or cut the bills should help mitigate future red ink and the need for more crisis management.

“I understand the rub with the election year,” Smith says, “and I don’t think anybody wants to have a special session, but we have to have a balanced budget.” He is proposing “all remedies … not just cuts, but new revenues,” be considered. (It bears noting that a repeat nine-figure deficit is exactly why the annual proposed raids on the state’s permanent funds to grow ill-defined programs are the wrong way to budget.)

Smith doesn’t say if he has anything specific in mind, although you can bet he does. Reinstate the gross-receipts tax on food perhaps? The repeal was terrible policy fueled by political opportunism and ended up hurting the people it was supposed to help. How about raise the gasoline tax? The question should be if it would go to the cash-strapped road fund. Meanwhile, the governor ran on a platform of no tax increases.

But given the current numbers, and especially because the call for action comes from Smith, a fiscal pragmatist who has advocated for sustainable state budget practices since his election in 1989, New Mexico needs a plan sooner rather than later. The administration and lawmakers should get ready to mark off time in Santa Fe on their 2016 calendars.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.


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