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Tuesday, January 05, 2010

Battle Of The Budget: Salary Cuts & Tax Hike Proposals Dominate Debate, Plus: UNM's PR Reprieve, And: Spacing Out In T Or C 

Rep. Varela
Viewed from the perspective of a severely battered private sector, the recommendation from the Legislative Finance Committee that all state employees take a two percent salary cut to help balance the budget isn't especially Draconian. After all, six percent of the state's non-government work force--or some 40,000 jobs--have gone by the wayside in the past two years alone. Still, is it fair that a $30,000 a year janitor take the same salary hit as a $90,000 state employee? What happened to the proposal to have the highly paid workers share more of the burden as the state wrestles with its epic fiscal woes? And how about a proposal that workers making less than $30,000 not be cut at all?

The LFC budget for the year starting July 1, 2011 was carried on TV news by committee chair Lucky Varela (D-Santa Fe). It cuts spending by proposing those across-the-board salary cuts and eliminating about 1,000 positions, many of which are already vacant. It also calls for trimming the budget of the state's universities by four percent and cutting Medicaid, the health program for the poor, by two percent. But the LFC still leaves a $200 million deficit. Where will we get that money? Some R's say cut more spending. Governor Bill is saying a "temporary" tax increase and the LFC is leaving its options open.

Over the weekend Richardson ruled out any increase in the personal income tax for the rich as well as any increase in the capital gains tax. He was immediately castigated for it by critics who say it appears the Governor is more concerned about his wealthy campaign donors than he is the average New Mexican.

Richardson's unilateral dismissal of these tax proposals does seem to demand more explanation. He is calling the tax cuts for the wealthy economic development tools, but recently said the major economic development of his administration was the development of a Rio Rancho Hewlett-Packard call center where only half the jobs will pay $40,000 a year. Where are the $200,000 salaries the '03 cut was supposed to lure here?

The administration and its allies have yet to produce any documentation that the rollback of the top income tax rate directly resulted in any meaningful economic activity. Meanwhile, news reports continue to site the inequitable taxation rates in the state, with the middle classes shouldering a disproportionate share compared to the wealthy.

FILLING THE HOLE

A modest increase in the top state tax rate, eliminating too generous tax credits to promote various economic activities--some ambiguous--and a vigorous appraisal of state contracts--especially the giant ones going to various law firms--would raise barrels full of revenue. But these proposals--as direct and as reasonable as they may seem--are orphans in Santa Fe. They might not raise $200 million, but they would make for a good start.

The bottom line on all of this is this: Unreasonably low tax rates for the rich, tax credits for businesses with strong lobbies and the platoon of law firms with close ties to legislators has lawmakers looking the other way, and looking covetously at the wallets of the average Mr. and Mrs. New Mexico.

PSYCHOLOGY TODAY


As much as everyone dreads the 30 day legislative session that begins January 19, the release of the LFC budget proposal Monday and the one to come today from Big Bill, seems to make it more tolerable. At least we are starting to grapple with the unpleasantness and like any problem, when it's discussed openly it seems less fearsome.

We are only in the second year of a long-term psychological adjustment to a learner government and one facing continuing pressure to provide for the basic welfare of the state. But human nature gradually adjusts and the body politic is no different.

MORE RICHARDSON 59

Our search for the "Richardson 59," the group of political appointees laid off by the Guv as part of the state's budget balancing effort nets another name. Stephan Helegson sent out an email confirming he was one of those on the hit list:

I will be leaving my position as the Director of the Office of Science and Technology with the Economic Development Department on January 8th. My job was one of 50+ 'Exempt' positions eliminated by the Governor in December. Regrettable though it is, 'one door closes and another one always opens.' This downturn won't last forever, and the State's finances will surely improve.
..

The Guv's office says it is not dignified to release the names of those being dumped. But the 59 being let go reveal the administration's priorities as it goes about trimming state government. That is a public policy issue and we have the right to know--and to debate. So far, readers have helped us post 20 of the Richardson 59.

UNM'S PR REPRIEVE

A couple of months ago we suggested that the athletic department mismanagement mess at the University of New Mexico might be solved by giving UNM basketball coach Steve Alford another hat to wear by making him the athletic director. Well, we didn't expect that to happen and it hasn't. But Alford is still bailing out UNM--at least for a time. His Lobos are on a tear, compiling a 14-1 record and reviving the legendary rabidness of Lobo fans who are once again packing the fabled Pit.

The wining streak is also dominating coverage of the school, giving UNM President Schmidly a reprieve from the headlines that have battered him and UNM football coach Mike Locklsey. But the structural and management problems at UNM are deep-seated. Schmidly, the UNM Regents and the troubled athletic department should enjoy the good news--while it lasts.

NO NEW CITY?

The effort to carve out a new city in the South Valley of Bernalillo County will go down in flames, predicts Dem State Rep. Ernest Chavez. The election is today. Turnout has been trending a bit higher than expected--about 8 percent of those eligible may cast ballots. Chavez says now is not the time for a new city. He says there is not enough of a tax base to support a new city and he does not detect widespread support for the idea. We'll see for certain tonight when election results roll in.

CONTESTING THE COMMISSION

Did we shortchange the R's when it comes to the race to succeed Alan Armijo on the Bernalillo County Commission? One GOP advocate thought we did when we blogged of this race: "The Armijo district is heavy Dem. Whoever wins the nomination in June can be expected to take the prize in November." Our reader chimes in:

Joe, Don't be so sure of this! You may be very surprised next November when thevotes are counted! It's all about performance not registration when it comes
to elections. Think of the win of Dan Lewis for the ABQ city council in this same area and the trend toward Republicans in our country now.

A large swath of the West side and the ABQ North Valley are in this district. Republicans tell us attorney Simon Kubiak is getting in the race. Three Dems--Michelle Lujan Grisham, Dan Serrano and Loretta Naranjo Lopez--are campaigning. Top Dems still say the R argument is a pipe dream and can't remember when an R ever represented the district.

SPACING IN T OR C

The Telegraph in London travels to Truth or Consequences to update the activity at Spaceport America:

At the town's main drug store, Shana Curliss, a 24-year-old shop assistant, said the spaceport had captured the imagination of younger locals, if not the older ones.

"It's new and it's different. I grew up in this little town and there's not much here for the children, not much work either" she said. "And the rich people will be coming to the stores, won't they?"

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(c)NM POLITICS WITH JOE MONAHAN 2009
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