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Friday, February 26, 2010
Gov.'s Aides Defend Revenue Forecast
By Dan Boyd
Journal Capitol Bureau
SANTA FE — Economic analysts for Gov. Bill Richardson's administration said Thursday they remain confident that New Mexico revenues will increase by nearly $300 million next year, a day after legislators voiced doubts about significant rebounds in the state's economy.
The revenue estimates, which don't factor in proposed tax increases, are key to ongoing budget negotiations between top-ranking Democrats in the House and Senate.
The Democratic leaders met all day Thursday behind closed doors in a Capitol annex in hopes of coming up with a budget agreement. New Mexico lawmakers are scheduled to begin a special session on the budget on Monday.
Senate Finance Committee Chairman John Arthur Smith, D-Deming, said Wednesday that overly optimistic revenue projections for the coming year could cause the state's budget deficit to grow by $200 million. Senate President Pro Tem Tim Jennings, D-Roswell, has stated similar concern.
Two members of Richardson's Cabinet, tax Secretary Rick Homans and finance Secretary Katherine Miller, met with Democratic leaders Thursday to underscore the executive branch's more optimistic revenue projections.
Homans said a recent review of the projections — which predict revenue will increase by more than 6 percent in the fiscal year that starts in July — showed no need for revisions.
"There is good reason for the anticipated increase," Homans said. "The forecast has been agreed to. ... In our mind, it's time to move forward."
Lawmakers were unable to approve a budget during the 30-day legislative session that ended Feb. 18, in large part because of disagreements over how to balance a budget deficit that, even with the projected revenue increase, is estimated to be between $500 million and $600 million short.
A lack of confidence in the revenue projections has complicated talks undertaken by legislative leaders this week.
Little progress was reported Thursday, though lawmakers intended to continue their discussions into the evening hours.
"It's very shaky ground, and the numbers haven't stabilized," said Rep. Luciano "Lucky" Varela, D-Santa Fe, deputy chairman of the House Appropriations and Finance Committee.
Republicans, who say they haven't been invited to take part in the negotiations, are also skeptical of the revenue projections.
"Even a compromise on something that's inaccurate isn't going to last long," said Senate Minority Whip William Payne, R-Albuquerque.
While personal income and gross receipts tax revenues are down, Homans said, increases in the royalties brought in by natural gas and oil production are keeping next year's revenue projections on track.