Tuesday, October 20, 2009
Emotional Impact: New Mexicans Absorb Budget Debacle, Also: One Session Not Enough To Close Gap? And: Guidance For Libs, Plus: Sloppy Kiss For Jeff
The high drama and real human impact behind the gargantuan state deficit numbers are now becoming manifest in all four corners of New Mexico as the State Legislature's Special Session begins its penultimate chapter, with a grand finale coming perhaps near week's end.
Proposals surfacing at the Roundhouse are now calling for as much as a jarring six percent across-the-board cut in our public schools, amounting to $150 million less for public education (Big Bill proposes $40 million in cuts) and over a $50 million hit to higher education. Any cuts approved would all be made by June 30, 2010, making the prospect even more unsettling.
The fiscal emergency, previously confined largely to paper, is now ever so close to being fully codified into actual law, galvanizing not only special interest groups, but average citizens who are now closely following developments with a sense of profound morbidity and fear for the state's future.
Interviews with various lawmakers reveal deeply affected citizen legislators, many of whom are seriously troubled over the budget votes to come. The numbers and what they mean to this state are even rattling seasoned lobbyists, who contrary to popular perception, are not without a conscience. Several of them suggested to your correspondent that solving the entire $650 million shortfall in this emergency session could come off the table. The alternative would be to find savings in the neighborhood of $400 million and address the rest of the deficit at the regular 30 day session in January. (All special session bills found here.)
YOUR CALL, GUV
Governor Richardson, the repository for the state's now roller-coaster emotions, may need to make the call that this session is only part one. If not, efforts to get to $650 million could end in disaster--with no agreement except to solve the $200 million plus deficit left over from last year's budget. (If they can eat the whole enchilada all at once, more power to them. They might get in the Guinness Book of World Records. The AP budget roadmap here).
That first $400 million is reachable by tapping cash reserves across state government, that 1.5 percent cut in public education offered in the Richardson compromise, canceling capital outlay (pork) projects and adopting other much-discussed budget measures. Getting another $200 to $250 million is where stomachs start to turn and even hardened budget cutters have a hard time looking you in the eye.
The compromise reasoning we are putting forth says it is not mandatory that we eat all our spinach at one setting. The budget year goes until June 30. We might get a bounce in tax collections over the holiday period that could give us some relief and reduce the deficit number. Also, a cut of $650 million now threatens to create even deeper and more bitter fissures in the Santa Fe body politic. That may be inevitable, but warding it off for a few months can't hurt and we would start round two in January with at least some comity. (House audio stream and Senate video stream found here.)
Conservatives seem to have the momentum in this special session because they have been proved right--they warned we would be here and we are. However, liberals (progressives) have painted themselves into a corner with the public by saying raising taxes is the only way out. We have a suggestion for them.
It's hard to believe, but the Legislative Finance Committee reported this summer that the Legislature has funded $1.3 billion in capital outlay (pork) projects that remain stalled or not even needed anymore. Not all that $1.3 billion is up for grabs, but Big Bill has already proposed that at least $60 million of it be canceled and the money sent into the general fund to plug the deficit hole. Our suggestion to the progressives is that they get aggressive--go after more of that money.
PORK VS. PUPILS
Capital outlay is money that goes to construction projects, not classrooms or social services. Progressives should feel comfortable cutting more of it to save education from the severe cuts being proposed. This money is prized by lawmakers who hold on to it as tight as a drunk clinging to a lamp post. But no jobs are at stake until the projects are started and it 's questionable how much this pork aids lawmakers' re-election efforts. If we were a fly on the wall at the progressive caucus, the rallying cry we would look for would be "Pork Vs. Pupils."
The conservatives will argue that using the capital outlay money is a temporary solution and does not address the need to cut recurring revenue for the schools and government. They are correct, but the progressives can argue they are buying time and if that means not cutting teacher salaries and classroom needs until after June 30, it is time worth buying.
Just a thought on one of the innumerable angles created by this most gripping budget debacle.
BUZZ WORD IS: RESTRUCTURING
When you hear talk about the need for "restructuring" the New Mexican government for a new economic era, here is an example:
Rep. Cote (D-Dona Ana-Otero) introduced a bill that calls for the Governor to reduce the number of exempt employees in cabinet departments and state agencies with salaries over $50,000. According to the bill, cutting at least 180 of these positions would save $8.1 million for the rest of this year and $19 million in the next fiscal year.
The Governor said he would trim salaries of 470 exempt employees but, in the past year alone, the number of Governor exempt employees has risen by 27 positions from 789 to 816, while the number of state classified employees has stayed the same. Over the past seven years the Governor’s exempt positions has risen by 281 positions.
ABQ GOP Senator Wilson-Beffort has been carrying water on this in the Senate. The burgeoning of political positions at high salaries is another reason why the public is not yet ready to entertain tax increases to bail out the budget. But Governor Bill had some push back on the matter, coming with this strike:
Governor Richardson announced that the hiring freeze...as well as other cost saving measures...has saved the state millions of dollars in payroll. Biweekly payroll is down $1.3 million since November. “I am disturbed that some lawmakers have seriously mischaracterized the results of these important cost cutting measures...
The Guv's office added that "the state has nearly 1,300 fewer employees than when the hiring freeze took effect on November 15, 2008.
But there are not fewer Governor "exempt" positions that are now in the crosshairs of populists bearing pitchforks.
TAX MAN COMETH?
Gov. Big Bill's office also announces, "he will form a working group to analyze revenue measures that can be considered during the regular legislative session in January."
It won't be easy getting any tax hikes in that election year session, but the crisis is of such a magnitude that the Governor has no choice but to look at them. Our state budget peaked at $6 billion. If we correct the $650 million shortfall for this budget year, it will be down to about $4.8 billion. That's a 20 percent bite. Clearly, the pain is here.
Dona Ana County Dem State Senator Mary Kay Papen may need a security escort around the Roundhouse. That's because she introduced a resolution that asks lawmakers to voluntarily give up 10 percent of their $159 per diem to show solidarity with other state workers and agencies taking big hits. That cut would amount to about 16 bucks a day. We've talked on the blog about lawmakers making such a symbolic gesture. Now that Mary Kay has gone along, we are sending her the number for AKAL security forces.
On a more serious note for Papen, our wall-leaners report her constituents at New Mexico State University are keeping a close eye on how she votes on cuts for higher education. It is a tricky place for the conservative Democrat.
How about this one? State House Majority Leader Kenny Martinez introduces a bill that would cut the legislative branch budget by 5.3 percent to help balance the budget this fiscal year. He said that in a news release. Kenny, don't forget to put another release out when we get the final budget for legislative operations. Will the proposed cut make it all the way through?
GETTING NITTY GRITTY
We've talked here about too many administrators with too high salaries in the public schools as the state works to trim their budgets without harming the classroom and teachers. The administrative excess has been a running joke for years. Mike Kakuska, executive director of the NM Association of Secondary School Principals, isn't going there, but he does email a specific list of cuts that he says save money without hurting education:
...Instead of concentrating on cutting salaries, which are critical to bringing and retaining quality educators into the state, we should look at programs and unfunded mandates first...
Cut back on testing to grades 3/8/11; we are over testing and have more data than we need to make sound judgments on curriculum; do away with required short cycle assessments in the high schools, the cost savings here would be substantial; cut out the required teacher mentoring program and the money that goes with it
Combine the lower 48 school districts administration functions; school districts are being forced to increase administration with the myriad of new regulations from the Public Education Department; a review of these non-funded mandates need to be undertaken and done away with in many cases...
THE BROOKS VIEW
Did we hear ABQ Public Schools Superintendent Winston Brooks say there was no money to be saved by cutting administration at the state's largest school system? Did he also say only 1 percent of the APS $1.3 billion budget is going to administration--or about $13 million? Okay, Win. Cut 10 percent of the $13 million and you have a savings of $1.3 million a year. Of course, the Alligators would welcome the Superintendent's definition of "administration." Do you think their definition might be a lot broader than his? Maybe someone at the Roundhouse can ask the Super...
Will some city services be privatized when ABQ's new GOP mayor and GOP majority city council takes over Dec. 1? Reader Mike Kitts is first to broach the issue that we may be hearing more about:
Will this City Council, and Mayor work to privatize the city services and eliminate such things as the cultural affairs department, in deference to a budget crisis? I can see the Kimo Theatre and the South Broadway Cultural Center, along with the Bio-Park and other features of this city, being sold for the lowest bid, to the private sector. We'll see what's in store for this city, won't we?
Mayor-elect Berry has not yet addressed the privatization issue, but with the city facing a budget shortfall and a more conservative council, we might be hearing something soon.
Some readers are downright eloquent in expressing their views on the state's current budget predicament. Here's Gary from Taos:
They (Democrats and Republicans) have spent and invested funds irresponsibly by increasing the size of government through adding new programs and increasing existing programs, making bad investments, embarking upon a number of capital programs whose financial enormity all but equals the current shortfall (i.e. Spaceport and Rail Runner), and made purchases in the millions (state jet for one) with very little oversight.
This took place with absolutely no regard to future revenues and during a time when one of our largest sources of revenue, the oil and gas markets, were showing signs of instability. They spent money on the come and hoped the money would be there.
Gary is right to spread the blame around. The state budgets of the boom years passed with hardly any opposition from D's or R's. However, Governor Bill has a point as well when he points to the national recession that has ravaged tax collections. On the other hand, he and the Legislature rolled back income tax rates in 2003 that also trimmed state revenue.
It's "Sponge Bond" not "Sponge Bob." But it's easy to get confused following the complex financial machinations going on in Santa Fe to solve the state's mammoth budget shortfall. The novel concept of "sponge bonds" has suddenly entered the media lexicon and the best explanation of them that we've seen comes from syndicated columnist Jay Miller. Not interested in sponge bonds? Then enjoy Sponge Bob stuff.
Okay, so the Journal's Coleman gives NM Senator Jeff Bingaman a sloppy journalistic kiss. But the state's senior senator is due the accolades. The 27 year Democratic Senate veteran has worked his butt off on the health care bill, with not really much notice. As for the future, as far as we can tell Bingaman, chairman of the energy committee, will run for re-election in 2012.
THE BOTTOM LINES
Charlie Tipton has resigned as chairman of the Bernalillo County Republican Party. He says his work as a physicist is keeping him busy. Rick Abraham has been named to fill out Tipton's term.
All 70 NM House seats are up for re-election in 2010. R's hope they can take back a few seats they lost, including the one picked off by Dem Bill O'Neill in the ABQ NE Heights and North Valley. Republican biz lawyer Justin Horwitz declared his candidacy for House District 15. Horwitz is an attorney at the Rodey law firm. O'Neill beat R Teresa Zanetti in '08. The seat is seen as "in play" by both R and Dem observers...
Worst budget crunch since the 80's? We think the ABQ Journal is understating the case, but that is often their tendency when it comes to bad economic news. We were here in the 80's. That budget crisis was child's play compared to this.
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(c)NM POLITICS WITH JOE MONAHAN 2009
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