Show Us the Money

Oh, wait—there isn’t any

This year’s budget talk: déja vu. In January 2010, the New Mexico Legislature convened to deal with a $454 million budget shortfall. Though New Mexico wasn’t in the hole as deep as, say, California, the shortfall still made up roughly 10 percent of the state’s total budget.

It took two special legislative sessions to settle partisan differences over how to close the gap. The divide was classic, with Democrats arguing for higher taxes (euphemistically termed “revenue enhancements”) to keep services intact while Republicans advocated for across-the-board cuts.

By March, a compromise was reached, and the budget was balanced—for the moment.

Over the next few months, though, the gap between the state’s revenues and expenditures crept back up. In October, the Legislative Finance Committee put the 2011 budget shortfall at $260 million. A month later, Gov. Bill Richardson’s office issued its own estimate—$452 million—setting off a statement war between incumbent and incoming administrations.

Richardson’s late-in-the-game estimate, Gov.-elect Susana Martinez announced, “confirms our suspicions that the Richardson/Denish administration has been hiding the ball all along.”

Richardson Deputy Chief of Staff Gilbert Gallegos fired back with fervor: “It’s not surprising that Susana Martinez doesn’t understand the budget,” Gallegos’ own statement read.

State Rep. and LFC Chairman Luciano “Lucky” Varela, D-Santa Fe, says the discrepancy exists because Richardson’s estimate doesn’t take into account legislative cost-saving measures enacted last session, such as shifting the burden of contributions to public retirement funds from the state to individual government employees.

“The LFC number says we’ll continue those [cost-saving measures],” Varela explains. “That’s the one we’re using to build our budget.”

Varela also sits on the interim Government Restructuring Task Force, which, in advance of its final meeting in December, floated a range of ideas to improve government efficiency by consolidating state agencies and eliminating certain committees, advisory boards and task forces.

The Martinez camp has so far been quiet on its plans for 2011.

Harvey Yates Jr., the former chairman of the Republican Party of New Mexico and a member of Martinez’ Government Efficiency Task Force, tells SFR the task force has met only once.

“I’m not very well-informed on this,” Yates says. “We’re in the process of reviewing various ideas. I’ve been told we’re going to meet again next week but, beyond that, I don’t know.”

During her campaign, Martinez promised to avoid cuts in the two heftiest budget arenas—education and Medicaid—without raising taxes.

Those promises are now fluid.

“The Governor-elect intends to protect core functions like classroom spending and basic health care for those most in need, but given the fact that the budget deficit nearly doubled since the election, she recognizes that it might become necessary to look for savings in certain bureaucracies in order to maintain core functions,” transition team spokesman Danny Diaz writes in an email to SFR.

Martinez plans to release “a balanced budget that does not raise taxes” before the start of the next legislative session on Jan. 18, Diaz adds.

While the two administrations exchange words, intimations of real change trickle out from state law-makers.

One proposal, by state Sen. Tim Keller, D-Bernalillo, removes the governor from the State Investment Council—a move Keller describes as the final step in ensuring state investment decisions aren’t political.

Keller says he anticipates sup-port for the bill—largely because corruption, investment-related and otherwise, continues.

“Another summer of scandal has proven the need to further separate politics from investments,” Keller says.”

According to the Center on Budget and Policy Priorities, only four US states don’t currently face budget shortfalls—a reality Keller says helps draw attention to the need for reform.

“One of the few upsides of a budget deficit is that it really focuses people on less glamorous issues like taxes and investments and, obviously, the budget,” Keller says. “In a surplus budget year, it’s like, what cool program can you develop that will use up the surplus? In down years, you’ve got to look at the things that are a lot less sexy, like investments and taxes.”

Get ready for an un-sexy 2011.

CONSIPIRACY THEORY: Richardson has been siphoning money to book a seat on the first Spaceport flight.