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Governor looks at merging some departments

Copyright © 2017 Albuquerque Journal

SANTA FE – With New Mexico caught in an ongoing budget crunch, Gov. Susana Martinez is dusting off an old plan to streamline state government by merging agencies – but with a few new twists.

Gov. Susana Martinez

Gov. Susana Martinez

In her State of the State address last week, the two-term Republican governor called on legislators to consolidate state agencies, saying her plan would save “tens of millions” of dollars per year and claiming New Mexico has nearly twice as many agencies as the federal government.

“Right-sizing government means reducing the size of government and developing efficiencies,” Martinez said in her Jan. 17 speech.

No bills have been filed since then, and the Martinez administration has offered few specifics, but one potential merger has already raised concern in the state’s hospitality industry.

Industry leaders say they were taken aback earlier this week when Tourism Secretary Rebecca Latham told them the administration is considering merging the Tourism Department with the Economic Development. They fear it could hurt a thriving business around the state, one of relatively few bright spots in the state’s economy.

No such bill has been introduced, and Latham said Thursday in an interview that any such plan is still “just an idea.”

New Mexico Tourism Secretary Rebecca Latham

New Mexico Tourism Secretary Rebecca Latham

However, Latham said a merger could create marketing “efficiencies” between two departments, both selling the idea of New Mexico.

And some top-ranking lawmakers have expressed wariness about merging agencies, saying the mergers might not be worth the effort.

“We’ll take a look at those proposals, but I’m not sure they’d increase efficiency,” said House Appropriations and Finance Committee Chairwoman Patricia Lundstrom, D-Gallup, during a Thursday radio interview on KUNM-FM.

Senate Minority Leader Stuart Ingle, a Portales Republican, told the Journal this week that he would be willing to consider the restructuring proposals, given an ongoing budget crunch that’s already prompted sweeping budget cuts and other one-time fixes.

But he cautioned that the plan might be a tough sell during the 60-day legislative session that ends in March.

“Lots of governors try it, and it seldom gets anywhere,” Ingle said.

In a statement Thursday, Martinez spokesman Michael Lonergan said Governor’s Office staffers have been working with House and Senate leaders on ways to streamline government and improve state services.

However, he cited one potential restructuring move: shifting the state Motor Vehicle Division to the Department of Transportation. The MVD is currently part of the Taxation and Revenue Department.

“Not only would this save taxpayer dollars, but it would also make services even more efficient,” Lonergan said.

Previous agency merger proposals have not been shown to have big savings.

A failed 2011 bill to combine the Energy, Minerals and Natural Resources Department with the Environment Department and the Department of Game and Fish would have generated $200,000 a year in savings, while initially costing the state $250,000 due to transition expenses, according to a legislative analysis.

Public-private entity

In considering a possible merger between Tourism and Economic Development, officials are also discussing the possibility of moving the marketing efforts to a new public-private entity to which industries with a vested interest in tourist traffic could contribute, Latham said.

But New Mexico Hospitality Association President and CEO Jen Schroer said the possible consolidation – which she said Latham described with few details at NMHA’s board meeting earlier this week – makes little sense, given the industry’s performance.

“Right now, the Tourism Department is providing such a great return on the state’s investment, and all of our indicators and statistics are showing tourism is up in New Mexico,” she said. “It seems like it’s not wise to dismantle or retool or somehow change something that’s working so well.”

Gov. Martinez herself has routinely touted tourism’s impact on New Mexico throughout her two terms in office.

In announcing a report last summer that showed the industry had experienced its sixth straight record-breaking year, Martinez described it as a key component of a diversified economy.

The Tourism Department has a general fund budget of $12.8 million annually, and $9.7 million goes to marketing and promotion. It has 54 full-time employees, and Latham said it is “too soon to tell” whether consolidation would mean staff cuts. She said that there is no talk of slashing marketing expenditures, but that cost savings might occur by sharing expenses like website development contracts with the Economic Development Department.

Schroer said the state has not provided enough specifics to know what impact its plan might have on the tourism industry. But she said she fears the idea has not been carefully considered. She and other members of the industry said they were surprised when Latham discussed the possibility this week.

Charlie Gray, executive director of the Greater Albuquerque Innkeepers Association, said the proposal came “out of the blue.”

“I didn’t have any inkling this was coming,” Gray said, adding that the group of local hoteliers opposes any such restructuring.

23 departments

In all, the state currently has 23 Cabinet-level departments and more than 40 administrative agencies, as several new Cabinet-level departments were established under Martinez’s predecessor, former Democratic Gov. Bill Richardson.

The last sustained effort to consolidate state government ended with a whimper in 2011, when lawmakers didn’t pass any of the 25 or so bills dealing with merging agencies or consolidating government functions that were introduced after a task force was convened to study the issue.

While the governor has the authority to authorize changes in administrative functions, any agency mergers or eliminations have to be authorized by the Legislature.

Martinez’s claim that New Mexico has nearly twice as many agencies as the federal government does appear to have some merit, as there are 15 executive departments in the federal government, according to the White House website.

However, the White House also says that in all, there are “hundreds” of federal agencies and commissions,

Meanwhile, Senate Finance Committee Chairman John Arthur Smith, D-Deming, a key budget voice at the Legislature, expressed skepticism earlier this week about the restructuring proposals, saying he’s not sure how much savings such moves would generate.

“If (the governor) really wants to be saving money, she should be proposing consolidating higher education institutions and school districts,” Smith told the Journal.

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