Inside the Capitol

Monday, August 03, 2009

8-5 Tough Times Require Desperate Solutions

Syndicated Columnist

SANTA FE -- Tough economic conditions sometimes require imaginative, even desperate, solutions. Budget crunches have hit our neighboring southwestern states with a vengeance. Arizona, California and Nevada have suffered budget deficits of 20 to 25 percent.
New Mexico has come off relatively easily with a four percent deficit. It also has more than a 10 percent cash surplus, which could be used to erase that deficit. But lawmakers like to keep a comfortable reserve just in case even worse times are to come.
So New Mexico legislators are talking about furloughs and layoffs of state employees rather than use of cash balances or repealing Gov. Bill Richardson's tax cuts for the wealthy or requiring out of state corporations to pay taxes equal to instate businesses.
They call those "painful" remedies. Any kind of tax increase is painful, even if it is on rich people or rich corporations. Those same rich people and corporations also tend to make big donations to political campaigns.
And we wouldn't want to create an unfavorable business climate for big corporations. Wal-Mart might move out. A host of small local businesses would cheer that.
Our neighbors to the west already have tried the less painful options and are having to get more creative. California has okayed some offshore drilling and may have to do some more, even off Santa Barbara.
Gov. Schwarzenegger wanted to drill there but the Democrat-run Legislature wouldn't approve, so the governor made cuts in education and children's services in retaliation. He also began issuing IOUs.
For awhile California was considering legalizing marijuana, which would have brought in big tax money but junked that while still considering auctioning off state owned items signed by the celebrity governor.
If you think that's desperate, in Arizona, they are considering selling their state capitol buildings and renting them back. Arizona's complex of state capitol buildings aren't impressive. They look just like office buildings, except the old capitol, which is now a museum.
New Mexico would have to get awfully desperate to sell its distinctive capitol, which is full of unique New Mexico art. The art may be worth more than the building.
In Arizona's capitol, we saw prints of paintings by New Mexico artists, including two in the governor's office. And that wasn't during New Mexico-raised Janet Napolitano's administration. The governor at the time was Republican Fife Symington.
Southwestern states aren't the only ones getting hit hard by this bad economy. Several southeastern states have not yet begun issuing refunds due on individual income tax returns. That is money that would go right back into the economy as a stimulus.
Although New Mexico state government revenues aren't in as bad shape as most other states, portions of our state are not as well off economically as others.
Southeastern New Mexico' economy has suffered ever since the end of the oil boom. And the outlook isn't good with many wells in secondary and tertiary recovery.
So, around 25 years ago, the Southeast began looking at the nuclear industry as a financial savior. That isn't something most of our state would accept but it is one of those imaginary and desperate solutions.
First came the Waste Isolation Pilot Plant, near Carlsbad. It has turned out to be an economic boon, while controlling for hazards. Now the Nuclear Regulatory Commission has granted its first license in 30 years for a major commercial nuclear facility near Eunice.
The plant will be the nation's first private fuel source for commercial nuclear power plants. Many other states had turned it down. With the nuclear enrichment plant on its way, talk has turned to construction of a nuclear power plant nearby.
Concerns have been raised about disposal of the waste for which there is no depository in the nation. And that has begun talk of a high-level New Mexico depository. Gov. Richardson has opposed the idea but if the locals and the federal government want one, they might be difficult to stop.
WED, 8-5-09

JAY MILLER, 3 La Tusa, Santa Fe, NM 87505
(ph) 982-2723, (fax) 984-0982, (e-mail)



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