Friday, December 03, 2010
Has Bear's Appetite Peaked? State Cash Flow Has Glimmer Of Hope, Plus: Blogging UNM; Athletics Vs. Academics And Schmidly's Future
Has the appetite of the Great Bear finally been satisfied? Santa Fe announces that we are up $56 million in projected revenue for the budget year we are currently in and that the shortfall for the the year that begins next July 1 is now at around $410 million, down from the $452 million that Big Bill's bookkeepers recently predicted. This "consensus" forecast is the final one before the Legislature is gaveled into session January 18 to again deal with the deepest and most stubborn downturn in generations.
The inkling of good news is prompted by an increase in gross receipts taxes being collected. That's a leading indicator of economic activity. It may not be signaling the next roaring bull market, but maybe we've finally stopped going down?
This, of course, is a welcome development for Gov.-elect Susana Martinez, although in a backhanded sort of way. When she won election Nov. 2, the budget shortfall was projected to be $262 million. When it jumped to $452 some in her camp cried "Conspiracy!"
Of course, as much as we love a to run with the Illuminati, it isn't. It is because of differing forecasters over Medicaid and other costs. Another big reason for the all-over-the-map estimates has been due to the continued reliance on revenue forecasts that don't materialize. That's also known as pain avoidance.
Each year, the rosier predictions have allowed lawmakers to continue to kick the can down the road, reducing the amount they trim only see deficits balloon when they go back in session. Even now, Santa Fe is forecasting a 4 percent growth in state revenues for the next budget year. Again, the Walgreen's in the City Different must stock loads of those rose-colored eye wear.
If the $410 million shortfall sticks in the coming months, it looks as though Santa Fe will finally have run out of road to kick the can down. Deep cuts will have to be made. That's fine in some quarters where the budget debacle is seen as a golden opportunity to streamline and do a long overdue reorganization of the state bureaucracy.
But what if the good news on tax receipts were to turn real good and the budget shortfall shrunk dramatically? Would momentum for reform falter? The kindergarten class of your choice could easily answer that question--Yes.
Our readers over at the University of New Mexico are always eagle-eyed. Lissa Knudsen, president of the grad students, comes with her reaction to this suggestion made here:
Susana, you can trim $2 million off that $452 million projected shortfall. That's the amount the University of New Mexico Athletic Department is getting from the state General Fund. If we can't cut that out with a dull-edged butter knife, we can't cut anything.
Joe, The fear from students at both UNM and NMSU is that when state subsidies are cut from athletics those costs will be shifted to students. Last year, despite a vote by the UNM Student Fee Review Board to decrease the fee allocation to Athletics, the Regents approved a $10 student fee hike. UNM enrollment went up to 23,116 thus Athletics received a $231,000 increase to their existing $71.75 student ($1,658,573.00) student fee subsidy.
On August 11, the LFC released a report on Higher Education that stated, "The [NMSU] athletic program’s revenue is consistently insufficient to cover program expenditures, let alone to cover the previous years’ deficit fund balances. Revenue from student paid fees is anticipated to increase 105 percent between FY07 actual receipts and budgeted amounts for FY11 ($1.4 to $2.9 million)"
The NCAA reports that UNM's athletics program spent $39,368,459.00 in 2008/2009 (and that was before Locksleygate and our recent significant decrease in ticket sales). Student Activity Fees have increased (110%) at a higher rate than tuition (74%) in the last 8 years (UNM Factbook) and that 30% of that increase has gone to Athletics (UNM Bursar's Office).
This shifting of the burden of Athletics to students is a very real concern that I think your readers (especially those that are parents of potential UNM students) should be aware of.
AND ANOTHER VIEW
Now let's move it down to Las Cruces for a little comeback to that from Barbara Couture, the new NMSU president:
...Universities transfer an average of $10.2 million to athletics programs. NMSU, in fiscal 2011, transferred $4.1 million, well below the average. The fact is the vast majority of athletics programs like ours require some support from instruction and general budgets. If we look at that budget transfer in light of our overall university budget, our total athletics budget as reported to the state is $16 million, just 2 percent of our total university budget (all sources, all campuses) of $682 million. The $4.1 million transfer is less than 1 percent of that total. Yet the athletics program supports 425 student athletes whose graduation rates are 20 percent better than our overall student population...
UNCERTAINTY AT THE TOP
Meantime, the situation with UNM President David Schmidly remains dicey. He has been out on medical leave since mid-August and there is no firm idea on when or if he will return. UNM Acting President Paul Roth says Schmidly's medical and other leave won't be used up until February.
Schmidly is being treated for an abdominal tumor. It has not been reported whether the tumor is cancerous or not.
Hopefully, Schmidly will recover. But the university hierarchy remains in need of major change. That includes the presidency, the athletic department director, the football coach and a stable of highly-paid and some would say mostly unnecessary vice-presidents. (UNM announced Thursday that football coach Locksley will return next year, avoiding the axe that has been poised over his neck).
Governor-elect Martinez will get to appoint a couple of new UNM regents when she takes over next month, but the majority will be holdovers from the Richardson administration.
Big Bill intervened in university affairs more than any other Governor we've seen, especially when it came to getting jobs for his backers. Martinez should not follow that path, but the authority of the new Governor may be needed to reverse the politicization of UNM that, combined with budget cuts, has sent morale into the basement.
That plum public info officer job for Bernalillo County went to Tia Bland, the current PIO for the state corrections department but who needed to get out of there before the axe fell with the arrival of a new Guv administration. From one of our downtown Alligators we get the official word and comment:
Joe, Thought you'd like to know that Tia Bland got the Bernalillo County PIO job, despite a lame duck Governor trying to get County Manager Thaddeus Lucero to hire his buddy. She was hired Wednesday.
That "buddy" of Big Bill is his communications honcho Gilbert Gallegos who will now have to continue his search for safe harbor as time runs out for Governor Bill.
The Dems now join the R's in having a contested battle for the state chair job. Incumbent Javier Gonzales told me a couple of weeks ago he will seek re-election to the job. The challenger is longtime Santa Fe political gadfly Letitia Montoya. She says she wants to hold accountable Dems who supported R's in the recent election, a reference to Dem county clerks supporting R Dianna Duran for Secretary of state. The Dem chair election is in the spring.
Gonzales of Santa Fe is favored to keep the chairmanship, but after a tough Dem year there is room for debate--and criticism--on how the party performed and its direction going forward.
Here is the latest on the "will she or won't she?" speculation surrounding a possible 2012 US Senate run against Dem US Senator Jeff Bingaman by former ABQ GOP Congresswoman Heather Wilson. It comes from the DC Hotline:
I just have to focus on helping the governor and can't focus on that right now," she said, referring to her job chairing Gov.-elect Susana Martinez's transition team. Wilson added that "the speculation is flattering."
Does that mean Heather likes the Alligators who keep mentioning her? Well, whatever. For sure she is keeping the door wide open for a Senate bid.
As for Jeff, he says he will announce his intentions about a sixth term around March. His aides are preparing for a run. We guess he gets in after the 60 day legislative session wraps up in mid-March.
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(c)NM POLITICS WITH JOE MONAHAN 2010 Not for reproduction without permission of the author