URGENT: NM budget deficit NOT $260 million — try $452 million!

From Capitol Report New Mexico - New Mexico’s budget deficit has been revised upwards from an estimated $260 million for next year up to $452 million, according to outgoing Gov. Bill Richardson’s financial expert. The revision — which equates to a staggering 74 percent increase — means the state legislature and incoming Gov. Susana Martinez have a much more daunting task to balance the state budget for the next fiscal year which starts July 2011 and ends in June of 2012. The disclosure — reported by Barry Massey of Associated Press following an interview with Finance and Administration Secretary Dannette Burch – led to sharp exchanges from the incoming and outgoing gubernatorial administrations. The Martinez camp issued this news release late Thursday afternoon:

“The revelation of a near half-billion dollar deficit is far worse than expected and confirms our suspicions that the Richardson/Denish administration has been hiding the ball all along with respect to the true budget deficit. This clearly has very serious implications for all New Mexicans. I will work with the legislature to make the tough decisions necessary to balance the budget by getting spending under control. The long-term solution to our budget crisis is to get our economy moving again and that is why I will oppose efforts to raise taxes. We must put an end to the financial shell games that have been played for far too long.”

Richardson spokesman Gilbert Gallegos then issued his own statement saying:

“[I]t’s not surprising that Susana Martinez doesn’t understand the state budget and the growth of Medicaid since she ignored it during the campaign and has not yet accepted our offer for a thorough briefing.”

AP reports that Medicaid costs account for most of the budget shortfall — $397 million, according to Burch. Medicaid provides health care for roughly one-fourth of the state’s citizens. Read more

URGENT: NM budget deficit NOT $260 million — try $452 million!