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Gov. Pushes for Budget Solution

By Dan Boyd
Journal Capitol Bureau
          SANTA FE — Gov. Bill Richardson urged lawmakers Tuesday to find a compromise budget solution that could prevent the 30-day legislative session that wraps up at noon Thursday from ending in a stalemate.
        If the impasse isn't broken, however, Richardson warned he could call legislators back to work next week — even though he believes that is "unacceptable and unnecessary."
        The House and Senate have both passed spending plans — and tax increases to help pay for them — but differ in their approach to balancing a budget deficit for next year that's projected to be between $500 million and $600 million.
        At a Capitol news conference, Richardson laid out several potential ways tax increases could be scaled back and made more palatable, and he said there's still ample time for a budget deal to be struck.
        He said the Senate-approved proposal to reinstate a tax on certain food items could be scaled back to target only junk food.
        "You don't want to tax tortillas and red chile in New Mexico," he said.
        The House-approved temporary increase in the state's gross receipts tax rate could similarly be reduced from its current half-percent rate hike to a one-quarter or one-eighth percent increase, Richardson added.
        Richardson also reiterated support for the smaller spending cuts included in the House budget plan.
        "Now we're at a point when some legislators are saying they can't get the job done and a special session is inevitable and unavoidable," Richardson said. "I say that a special session is unacceptable and unnecessary."
        But he added he's prepared to call lawmakers back to Santa Fe for a special session if a deal isn't agreed upon or he doesn't approve the final budget plan.
        Democratic leaders of the House and Senate, who have held closed-door budget talks this week, have remained tight-lipped on the status of negotiations.
        A special session, if it's called, would cost about $50,000 per day.
        "I'm hopeful we can come up with something (to avoid a special session)," said Senate President Pro Tem Tim Jennings, D-Roswell, who's participated in the budget talks.
        The House approved cuts of about 1 percent for public schools and government services, while the Senate budget package calls for reducing spending levels by about 3 percent.
        The shallower cuts in the House plan would be made possible by more than $300 million generated by tax hikes, primarily the gross receipts increase. The Senate plan relies on $180 million in new tax revenue.
        However, Jennings said he's concerned revenue levels might end up being even lower than projected and said Richardson has criticized more tax ideas than he's offered.
        "The food tax is the only one that's been a stable tax in the past," Jennings said. "We need to cut and raise taxes, too."
        Before the Legislature adjourns, Richardson said he also wants to see legislation to revamp the structure of the State Investment Council, create a Hispanic Education Act, address property tax lightning, create an ethics commission and more.
        He said it should be evident whether those bills and a budget deal will be forthcoming by midday today, the last full day of the 30-day session.
        "I believe we still have time for a suitable compromise I can sign," Richardson said.

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