2-19 We Haven't Hit Bottom Yet

By JAY MILLER
Syndicated Columnist

SANTA FE -- They just don't get it. New Mexico is in a Great Recession that won't be solved by quick fixes or nickel-and-dime fixes. And yet Santa Fe seems to be in denial.
I don't know how the Legislature ended yesterday but it doesn't matter. We are still at the beginning of a long road. We'll have many more special sessions and regular sessions before we're out of this hole.
Sooner or later our governor and lawmakers will have to face the fact that minor surgery is not going to cure our budget problems.
It didn't help that our revenue for next year was projected at a six-percent increase over this year. The rationale was that the economy is so bad now, it can't get any worse.
Well, it can. A forecast made last week showed that we haven't hit bottom yet. We'll need another $50 million just to make the current year's books balance.
You know what that's going to do to next year's budget. That $600 million hole they've been talking about has gotten even deeper. The answer to this major problem is some major solutions.
Instead our governor and lawmakers are arguing over whether to tax tortillas and eliminate double-dippers. That will produce about two handfuls of dirt to fill that gaping hole.
Granted, a big budget deficit is the ideal time to see if we're running government as efficiently as possible. Let's keep it up. But we must also be extra careful that our spending and our cuts make sense.
Since Gov. Bill Richardson took office in 2003, the state has spent over a billion dollars on economic development. The governor says the investment has paid off big time. Some of us aren't too sure.
It's too late to get our money back on some of the big items but other big outlays could be stopped. Film incentives have been questioned but beaten back by expertly produced protests.
New Mexico was one of the first states to take on Hollywood. It worked. So, many other states copied us. Some are granting even bigger incentives. Now they're wondering if they did the right thing but no one can figure out a foolproof way to measure it. We should keep trying.
The state also is doling out big sums to attract other business. At a time when nearly every public service is being cut, Gov. Richardson is asking for millions more to grant the wishes of Hewlett Packard and Fidelity Investments corporations.
So what happens if we start cutting back on our dole to those corporate giants? Will they leave? Did they come here for any reasons other than getting on the corporate dole? Maybe not.
A well-trained workforce always helps. Singapore, once so poor that no one wanted them, decided to become its own city-state and force the most rigorous education in the world on its children.
Companies now flock to Singapore for the best-trained workforce in the world. And their personal income is one of the highest in the world.
But our Legislature is cutting school budgets. One Senate Finance Committee proposal is to no longer fund 12th graders. Think of what that will do for our unemployment rate.
While the film industry receives many millions, the state Tourism Department, created to help out New Mexico's largest private-sector employer, is seeing over a 50 percent budget cut.
Prior to the Legislative session, all sectors of the tourism industry in New Mexico united behind a request to the Legislature for a small gross receipts tax on themselves to fund additional tourism promotion. It was an attempt to gain some ground on neighboring states which pour many times more into tourism promotion than New Mexico does.
Lawmakers killed it. After all, it was a tax. No matter that it was a tax on an industry willing to pass it on to tourists. And then they cut Tourism's $2.6 million budget down to $1 million.
Instead of New Mexico paying rich corporate giants millions to put a plant in our state, how about a little help for an industry already in our state that has a $1 billion payroll?
FRI, 2-19-10

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