Monday, August 22, 2016
State Budget Bomb Lighted And Set To Explode; The Latest Positioning, Some Crazy Proposals And Some Possible Ways Out, Plus: Our Toughest Photo Caption Contest Ever?
Whatever they come up with in Santa Fe, it won't be at the special legislative session the Governor says she will call for sometime in September. Senate Finance Committee Chairman John Arthur Smith has decided--and we assume with the Guv's blessing--that the special will focus solely on the estimated $200 million deficit left from the budget year that ended June 30. As for the current budget year in which the deficit is projected to be more than double that number, here's what's up:
(Smith) said he wants to patch the 2016 deficit as soon as possible but save larger budget issues for January, when lawmakers return for a regular 60-day session.
That confirms what our Alligators have been saying--no one really wants to undertake the punishing business of budget cuts and/or tax increases with the November election looming and when all 112 lawmakers face the electorate.
Senate Majority Leader Michael Sanchez felt compelled to be the first to raise the possibility of tax increases when he could have (should have?) forced the R's hand and just stayed mum. Predictably, the R's pounced:
There are responsible ways to approach closing the gap this year and it can be done without tax increases and without policies that punish businesses and New Mexicans, but once again Michael Sanchez and the Democrats have shown they lack the creativity to imagine any solution to a budget shortfall that doesn't include raising taxes.
Speaking of creativity, we aren't hearing any from Susana and her minions when it comes to the crisis. She cut agency spending five percent across the board but that's estimated to save only about $50 million, a mere raindrop in the bucket in dealing with this disaster.
Do you think before she does anything more she has Jay do some polling to see just how much budget cutting the public can stomach?
And how about this one coming from conservative corners: reinstate the tax on food. That would hit the lower strata of the state the hardest but the right wing is bound and determined to preserve those corporate tax cuts it won, despite costing the state much more than anticipated (ask the Legislative Finance Committee) and utterly failing to spark any economic development as promised.
Hmm. Would a "reinstatement" of a previous food tax be passed off by the Fourth Floor as actually keeping with Martinez's "no new taxes" pledge. All we can say is watch your P's and Q's very carefully. Before this mess is over they could rewrite the dictionary, not to mention the alphabet.
So if we're such a bunch of smarty pants around here what is the solution to this historic budget chaos? Well, since you asked. . .
---Approve a temporary increase in the state gasoline tax, enough to raise north of $200 million a year each year for two years. Devote some of it to the road fund which would stimulate this browbeaten economy. The tax is regressive but pump prices are in the cellar and this tax is much more preferable than a food tax that would hit wider and deeper. Also, a gas tax would be paid in part by our many out-of-state travelers.
---Freeze the corporate income tax cuts for two years and increase the capital gains tax. The corporate cut isn't going to be missed and the capital gains boost isn't going to do any damage.
---Increase the tax on booze and cigarettes since Santa Fe is going to raid the over $200 million state tobacco settlement fund to plug the deficit left from last year.
That's enough "revenue enchantments." They would make the cuts that need to be made much less severe. And there will need to be cuts. Could someone send that telegram to the athletic departments at UNM and NMSU?
THAT WAS HARD
The trouble was not with Vice-President Truman and Senator Dennis Chavez. Most of our entrants nailed that. It was the third man, in the forefront, who baffled most of our readers. Their guesses ranged from former NM Governor Clyde Tingley to onetime Congressman Antonio Fernandez.
The correct answer is Democratic US Senator Carl Hatch. He is probably most remembered for the Hatch Act which prohibited federal employees from engaging in partisan political activity.
But there just haven't been many photos of Hatch out there and he seems to have been overshadowed by Senator Chavez. He was appointed to the Senate in 1933 to fill the vacancy left by Sam Bratton and was re-elected in his own right in '34, '36 and '42. He chose not to seek re-election in '48 (he won the '42 race with 59% of the vote) and soon after was appointed a US District Court judge.
Terry Brunner, who served as a top aide to now retired US Senator Jeff Bingaman and who now heads the USDA Rural Development office, was familiar with the history and was the first to get it right. Richard Pugh was next with an early morning entry. Brian Tierney came later in the day with the correct caption and Rick Montoya was the fourth correct guesser. They were the only four who knew that it was the state's then sitting two US Senators in the 1940's meeting with Truman who served as a Missouri Senator, Vice-President and later President.
We're going to award all four of our winners a free lunch. They earned it. And a big tip of the hat to ABQ attorney Foster Hannett who provided us with the picture. We met up with him recently to review his treasure trove of New Mexico documents and photos and that's where we got the intriguing contest snapshot. Running a contest on the blog that can't be instantly answered by a quick "Google" is always a challenge. Thanks to Hannett for the brain teaser and to all who took time to make a guess.
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(c)NM POLITICS WITH JOE MONAHAN 2016