Inside the Capitol

Saturday, October 31, 2009

11-04 Cutting to the Bone

Syndicated Columnist
SANTA FE -- The parade of Gov. Bill Richardson's department secretaries has begun. Each tells a story of what a 7.6 percent cut will do to the governmental services they provide.
Most have been a little to a lot over the top. But remember, these agencies sustained a four percent cut from the 2009 Legislature which ended last March. And each will be in for more cuts come the 2010 Legislature beginning in January.
Lawmakers are squealing about the scare tactics but one purpose they do fulfill is providing the public a picture of what is at risk either now or after the 2010 Legislature.
Much was said about how many legislators didn't comprehend the extent to which state government had to be cut during the special session. Now the public is learning the extent of those cuts and the cuts to come.
Of course, the cuts to state agencies had to be extra big because the governor wanted to leave education alone. That angered many legislators, including Senate Finance Committee Chairman John Arthur Smith, a Deming Democrat, who said, "That's what the governor gets when he walks the plank for education."
Gov. Richardson also wanted no tax cuts. The majority of lawmakers were thrilled about that but that made the executive agency cuts have to be even deeper.
The governor was counting on much of the deficit being made up with unused capital outlay money. But the Legislature put a stop to that. On the final day of the special session, an Albuquerque Senator managed to tack on an amendment saying next January's regular session would at least consider transferring up to $150 million of unused pork into the general fund.
That was the vote on which Lt. Gov. Diane Denish broke a tie. The Senate leadership was livid but has now transferred its anger to Gov. Richardson, who subsequently froze that $150 million so it doesn't get spent before January.
Now Senate leaders have changed their tune and say they were planning to transfer the $150 million to the general fund in January anyway so there was no good reason for the governor's action.
Capital outlay "pork" is likely to be even more controversial in the 2010 Legislature than tax increases. Reportedly there is over $1 billion in capital outlay funds sitting unused. But capital outlay is the Holy Grail of nearly every legislator.
They will do anything to get it and keep it because they believe pork is what keeps getting them reelected. They take great pride in pointing to a building, park or stretch of highway as being the bacon they brought home. Even better is to get one's name on a project. Then one doesn't have to point. Everyone knows pointing is impolite.
Pork comes from three sources. General fund money that otherwise could be used for ongoing governmental activities, severance taxes and bond issues approved by voters in November elections.
It shouldn't surprise you to learn that capital outlay projects voted on in bond elections are for popular projects such as school buildings, senior centers and public safety projects.
Projects financed with general fund or severance tax money likely would never survive a statewide vote of the people.
Severance taxes paid by the oil and mining industries are recurring revenues. The amount varies depending on the price of the oil, gas and minerals extracted from New Mexico soil but there always will be a good stream of income.
That means it would be possible to use severance taxes for operational expenses without running into the argument that it is one-time money.
So two of the sources of pork could be used to plug the big hole in our budget. That still would leave bond issues approved by voters to finance capital outlay projects -- as long as they are approved by voters.
WED, 11-04-09

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



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