Inside the Capitol

Wednesday, September 29, 2010

10-4 Few Ways Left to Balance Budget

Syndicated Columnist
SANTA FE -- If traumatic was the proper description for the past two years of budget-balancing legislative sessions and special sessions, dreadful might be the term for what will happen next January.
The one-time fixes are all used up. Departing employees have not been replaced for two years, salaries have been frozen, benefits have been cut and many programs have been reduced or eliminated.
Both gubernatorial candidates first pledged not to increase taxes next year. Now they have upped the ante to no increases for their entire four-year term.
Economists say fiscal recovery in states lags about three years behind national recovery. Odd as it may seem, they have declared the national economy to be recovered. That leaves three more years for New Mexico to keep digging itself out of its hole.
All the cuts the state has made during the past two years have resulted in reducing the budget from $6 billion to $5.2 billion. Projections right now indicate a budget deficit next June 30 of about $450 million. Figure that amount increasing to around $500 million by the time the next budget estimates are made.
If the state was able to cut its budget $800 million in two years with much kicking and screaming and some tax increases, what is it going to take to cut it maybe $500 million a year for the next three years with no tax increases?
The only item left to cut is employees. Reducing them through attrition the past two years hasn't been enough to make a dent the size we will need.
Employees comprise most of a state's budget. Yes, we spend large amounts building roads but that money comes from state and federal gasoline taxes that aren't part of the general fund budget we are talking about.
The easiest employees to cut are the political appointees. They are at-will employees anyway, with no job security other than being on the governor's good side.
At one time, there reportedly were over 500 such people working for state government. That has reportedly been reduced down to somewhere in the 300s during the budget tightening. Exact numbers, much less names, are difficult to obtain since the payrollers aren't part of the personnel system.
It would be easy to cut this number much more and save quite a bit of money. Everyone will be gone at the end of the year anyway and the next governor isn't required to hire anyone to fill those positions.
No one will complain about the governor hiring her own people for her office staff and to head cabinet level departments and agencies. But that could easily be kept under 100.
When I arrived in Santa Fe in the mid-1960s, governors had very small staffs, maybe 10 people in a small suite of offices. That number has grown to fill almost half of the fourth floor of the Capitol Building.
The governor's cabinet has more than doubled from 12 at the end of Gov. Jerry Apodaca's administration in 1978. If the top posts in each department were filled by advancing present classified employees, it would further reduce the number of political appointees and would mean the executives already would know their jobs.
Even with these cuts, the really big bucks still have to be found. Layoffs are a very distinct possibility. Middle management is a good place to start. They mostly attend meetings. Travel expenses to those meetings are a big item, which could be eliminated and the state car pool reduced.
A return to $4 a gallon gasoline would solve the state's budget problems but wouldn't do anything good for the driving public.
Blogger Joe Monahan reports talk of a more concerted effort this year to use the state's permanent fund income to help plug the gap. Using any of the fund, itself, requires a constitutional amendment but current royalty money can be diverted by the Legislature from going into the fund.
Lawmakers already do that with severance taxes going into our other permanent fund.
MON, 10-04-10

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



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