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Saturday, March 8, 2003

Budget Wrinkles To Be Ironed Out

By David Miles
Journal Capital Bureau
    SANTA FE The central task remaining for New Mexico legislators before they adjourn their 60-day regular session on March 22 is approving a $4 billion state budget.
    The pie charts here provide general illustrations of where the money comes from and where it's spent.
    Because the budget legislation, called the General Appropriation Act, is still being developed, the spending numbers are approximate. And, because the budget is for the next fiscal year, starting July 1, the income numbers are projections.
    A state budget bill has been approved by the House and sent on to the Senate, where the Senate Finance Committee soon will begin amending the House plan.
    This year's budget wrinkles include some guessing about income and costs.
    Some legislators have expressed concern about projected budget shortfalls in coming years because of possible declines in oil and natural gas markets, causing drops in state income from oil and gas taxes.
    There also are questions about how to deal with rising costs of the state's Medicaid health care program for low-income New Mexicans: whether to find more money or cut spending. The current House budget proposal assumes that the state will save about $20 million in Medicaid spending through administrative efforts.
    In addition to the traditional general fund spending illustrated here, the pending budget bill includes nearly $43 million in spending from New Mexico's share of money from a multistate settlement with tobacco companies. Gov. Bill Richardson has another proposal that includes even more spending from tobacco settlement funds.
    Richardson's budget recommendation also assumes $90 million in savings in overall state spending reducing the need for a like amount of income and the collection of $50 million in delinquent state taxes.
    The basic state budget arithmetic really is not much different than household budgeting: income and spending are the key factors.
    But the state budget gets more complicated because there seem to be more ways for lawmakers to find, or create, income.
    At the same time, the state Constitution requires that income and spending be balanced in the state budget.