Gov. Susana Martinez says her administration is preparing to order state employees to take unpaid days off as soon as next month to help save money as New Mexico faces a budget crisis.
And she plans to call the Legislature back into special session soon, she said, to work not only on next year’s budget but to fix this year’s.
It would be the third time lawmakers and the governor have made adjustments to this year’s budget, with the goal of sweeping unused cash into the general fund to pay state bills.
Without more budget changes, “furloughs will start next month,” Martinez, a Republican, told reporters after a speech in Albuquerque. “Parks and museums will start closing because there is no cash on hand to continue all of these systems operating through the end of June.”
Democratic lawmakers say they’re surprised by the talk of employee furloughs and government closures. The Legislature adopted a solvency package earlier this year – in addition to changes made in a special session last year – aimed at providing enough money to get through June 30, the end of the fiscal year.
House Speaker Brian Egolf, D-Santa Fe, said Monday that the governor never bought up problems with this year’s budget once the solvency package was adopted in late January. The legislative session continued through mid-March.
Lawmakers, he said, have no reason to believe furloughs or other dramatic steps are necessary to balance this year’s budget.
“The solvency package is still totally adequate, according to everything we know,” Egolf said in an interview. “If she’s got data that contradicts that, she should tell us.”
Sen. John Arthur Smith, a Deming Democrat and chairman of the Legislative Finance Committee, said the state government would have had more margin for error this year if the governor hadn’t vetoed parts of the solvency package adopted by the Legislature. But even so, he said, there’s been no indication the state’s financial situation has deteriorated substantially since then.
“I think we can squeeze by unless she’s aware of other revenues that aren’t materializing,” Smith said.
Martinez, in turn, said it was lawmakers who didn’t go far enough to shore up this year’s budget, discarding some of her ideas without much debate.
“Many in the Legislature failed to do their job,” she said.
Her remarks came in a speech to about 400 business leaders gathered for a luncheon sponsored by NAIOP, the commercial real estate development association. She received a standing ovation as she took the stage for a 25-minute speech.
Employee furloughs – or unpaid days off – could begin as early as next month, the governor said. Law enforcement officers and employees in other critical functions could be spared, Martinez said.
The governor has already imposed a hiring freeze for agencies under her control.
“It is a dire situation,” Martinez told the audience, “and it’s up to us as leaders to fix it.”
The hiring freeze and furloughs are intended to help ensure the government has enough cash to continue paying its bills through June 30.
The governor and her staff said they’re still calculating how much money they need to save this year through furlough days.
They also said some of the savings produced by the solvency package won’t happen in time to help pay this year’s bills.
“This is completely unacceptable,” Martinez said of the budget trouble. “New Mexicans everywhere deserve better.”
Two budget battles
The Legislature and governor have not agreed on a budget for the next year, either. The new fiscal year begins July 1.
State lawmakers adopted a $6.1 billion budget this month that relies on about $350 million in tax increases to help pay for the spending and build reserves. Among the new revenue would be an increase of 10 cents a gallon in the state gasoline tax.
The budget passed with a bipartisan majority in the Senate and then along party lines in the House. Democrats control both legislative chambers.
Outside the Marriott on Monday, about 50 protesters gathered, carrying signs urging Martinez to sign the budget approved by the Legislature and avoid spending cuts.
Inside, however, Martinez vowed again to veto tax increases.
“I will not let politicians bail out big government on the backs of New Mexicans,” she said.
She said she plans to call lawmakers into a special session soon to craft a new plan to balance the budget. That means legislators would have two budgets to work on – shoring up this year’s spending plan and adopting a new one for next year.
The agenda may go beyond that, too. Martinez said she is weighing other topics for the Legislature to consider in a special session, such as stiffer penalties for people who harm employees of the Children, Youth and Families Department. A similar proposal won overwhelming approval in the House this year but didn’t clear the Senate before the end of the session.
The budget trouble comes as the state is squeezed by low oil and gas prices – a critical part of New Mexico’s economy and an important source of revenue for the state government.
Martinez described it as a “historic crash” in oil prices.
New Mexico already has faced a downgrade in its credit rating, and the state’s unemployment rate is the highest in the nation.