Legislature urged to act fast to fix state budget - Albuquerque Journal

Legislature urged to act fast to fix state budget

Copyright © 2016 Albuquerque Journal

SANTA FE – An influential New Mexico state senator is warning that a failure to act quickly in the coming 60-day legislative session to address persistent budget woes could lead to the cancellation of public school days and unpaid furloughs for teachers.

Sen. John Arthur Smith, D-Deming, chairman of the Legislative Finance Committee, pointed out that the state’s budget year will already be more than half over by the time lawmakers convene in Santa Fe next month – the state’s budget year ends in June – and waiting until late in the 60-day session to approve a solvency fix would make it difficult to come up with necessary savings.

New Mexico is on track to have a deficit of about $69 million for the current fiscal budget year even if all cash reserves are spent, according to new revenue estimates unveiled last week.

“We’ve got to save money fast,” Smith told the Journal in an interview this week. “If we can’t get a consensus and find some corners that still have money in them, we’re going to have to take drastic action.”

“The last thing I want is a furlough of classroom teachers for three days,” he added.

However, a spokesman for Gov. Susana Martinez called Smith’s warning “absurd,” saying the two-term Republican governor believes classroom spending and economic initiatives can be spared from further state government belt-tightening.

“We have serious budget challenges, but it’s counterproductive to resort to scare tactics in order to push an agenda that would raise taxes on our families,” Martinez spokesman Michael Lonergan said Tuesday.

Although no solvency package has been put forward publicly, Smith earlier this year proposed an increase of 5 cents a gallon in the state’s gas tax as a way to help balance the budget.

Meanwhile, the Governor’s Office also said state lawmakers left various solvency options on the table during a special session held this fall, including a proposal to divert money from their retirement accounts.

During that session, legislators slashed spending for universities, public schools and most state agencies – by as much as 5.5 percent in some cases – in response to the ongoing budget crunch, which is largely due to low oil and natural gas prices and their ripple effect on the state’s economy. Lawmakers also signed off on several one-time fixes during the special session.

Currently, K-12 public school spending makes up about 44 percent of state spending – or nearly $2.7 million. Although education has had smaller budget cuts, percentage-wise, than other agencies and programs over the last year, protecting school funding could prove difficult if the revenue downturn persists.

Unpaid furlough days for state workers have been used as a budget-balancing tool in the past – most recently in 2010 under then-Gov. Bill Richardson – and have been mentioned as a possibility for some agencies, including the judicial branch, for the current budget crunch.

Furloughing public school teachers would likely have a big impact on families and educators around New Mexico. There are currently about 23,000 public school teachers statewide, according to the Public Education Department.

In hopes of avoiding such a drastic move, Smith and others would like for lawmakers to approve an emergency solvency package for the current budget year in the session’s opening days. It could then be sent to the Governor’s Office for final approval.

In a rare move for a 60-day session, the Legislature’s two budget-writing committees – the Senate Finance Committee and the House Appropriations and Finance Committee – will begin meeting the week before the session starts on Jan. 17, after leading legislators gave authorization earlier this week. That could pave the way for a quick vote once the full Legislature convenes.

Smith is widely regarded as one of the Legislature’s top budget gurus. He has clashed with the Martinez administration over budget issues in recent years, but he called last week on the executive branch and legislators to work together on a solvency plan for the latest budget crisis.

In addition to a short-term budget fix, lawmakers will also have to approve a budget for next fiscal year during the session. The total revenue projected to be available for the budget year starting in July 2017 – slightly more than $5.9 billion – is nearly $300 million less than original state spending levels for this year.

Senate Minority Leader Stuart Ingle, R-Portales, said lawmakers will face hard decisions about whether to sign off on steeper cuts or raise revenue levels through tax increases or other mechanisms.

He also said changing state law to pass some of the state’s financial burden down to cities and counties – presumably by getting rid of a state subsidy for those local governments that have recently raised their tax rates – could be an option.

“We’ve got to do the best we can to make sure the ship’s right, and still floating,” Ingle said. “We don’t have a choice.”

Journal Capitol Bureau reporter Deborah Baker contributed to this report.

 

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