Inside the Capitol

Wednesday, September 08, 2010

9-13 Gov. Hopefuls Can't Keep Promise

Syndicated Columnist

SANTA FE -- It's nice to see our battling gubernatorial candidates agree on something, especially something as big as no tax increases next year and no cuts to schools or Medicaid.
The only problem is that it's not going to happen. It can't. We have a deficit of about $230 million to make up for the current fiscal year ending next June.
Education and Medicaid make up about 56 percent of the state budget. Cutting $230 million out of 44 percent of the state budget that already has been severely cut just can't be done.
I hope the loser in the gubernatorial contest curbs her temptation next spring to criticize the winner for signing a budget that likely will have some tax hikes and some cuts to schools and Medicaid.
It's going to get worse. Public safety is seven percent of the budget and that has always been pretty sacred. Colleges and universities aren't included in what we've talked about so far.
They get 15 percent of the state budget. Add those two in and we're up to 78 percent of the state budget. And we really don't want to short the Corrections Department, do we? Also, next year we are told we won't receive the federal stimulus funds we have received the past two years.
This next legislative session may be one in which the targeting of cuts gets much more precise. So far most cuts have been mainly across-the-board. Gov. Bill Richardson did come through with $1.4 million in stimulus funds to help some executive and judicial branch agencies.
The federal stimulus funds allocated to governors for their discretionary use have been a real goodie bag. Some governors have opposed stimulus funds but none have turned them down. Although some are pretty quiet about where those funds are coming from when they are handing them out.
In states suffering even more than New Mexico, one of the last refuges before enacting tax increases is creative fund raising projects. A few bake sales have been reported.
California has one of the world's biggest garage sales of surplus government equipment. Gov. Arnold Schwarzenegger offers to autograph the items for an add-on fee.
Advertising has become popular. Gov. Schwarzenegger has proposed selling ads on highway signs and license plates. The Mississippi House has passed a bill to put ads on school busses.
A number of states are trying out corporate sponsorships. Some states offer advertising space on state park signs or on park promotional materials.
Some states are selling state airplanes, as New Mexico may do. The Albuquerque Journal's Thom Cole suggests we might sell ad space on the state jet if we decide to keep it. Several states are now looking at Arizona's idea of selling their state office buildings and leasing them back.
The New Mexico Department of Health wants to raise the application fee for prospective medical marijuana growers from $100 to $1,000.
It also wants to impose a seven percent gross receipts tax to help the program become self sufficient.. The department estimates each of its 11 growers generates $300,000 to $400,000 in revenues and more growers will be certified.
It seems to work well in Colorado, which has created quite a slush fund from medical marijuana growers. The state currently is looking at a second $9 million raid on the fund.
Perhaps surprisingly, New Mexico's counties have not been hit as hard by economic problems as state or municipal governments have been. That is because counties are more dependent on property tax instead of sales tax or income tax.
When incomes go down or when people lose their jobs, the effect is felt quickly, especially in sales tax receipts, which are paid monthly. But when property values decrease, property assessments don't immediately fall, so property tax receipts remain steady.
Some counties have even been able to give modest salary increases.
MON, 9-13-10

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



Post a Comment

<< Home