© 2016 Michael Swickard, Ph.D. New Mexico Governor Susana Martinez
will call a special legislative session because of lower oil and gas revenues
than projected. If there are budget cuts, will some government workers get
fired? Or will there be a tax increase a month before the November election?
Both solutions may cost votes for legislators in close races.
Cutting the budget usually means
someone loses their government job because much of the state’s budget is used
to hire people. Often the way those people in charge respond to budget cuts is
to fire the most crucially important people first because the citizen outcry may
protect their budget.
Organizations often target doctors,
EMTs, fire and police along with in-classroom educators. That always gets lots
of citizen outcry and media attention.
Years ago in Albuquerque there was a
budget crunch in the police department so they fired the street policemen in
the worse section of town. Did they touch administrative people? No, because
the citizens of Albuquerque wouldn’t care if those employees were fired.
The citizens of Albuquerque capitulated
and added more tax revenue to the budget rather than lose critical police
protection. Some politicians claim that everyone employed by the State of New
Mexico is essential to the state. They proclaim loudly to the media that taking
any money away from existing programs will result in catastrophic damage to our
state.
The talking point: there are no workers
on the state’s payroll who are not completely essential. Further, we citizens will
be told we must consider that state employees are just like us with bills to
pay and kids to raise so being fired is featured in the media reports letting
us citizens know that firing state workers will destroy lives.
Another option being discussed is to
increase taxes. That way no one is fired. But in the middle of an election
voters can express displeasure quickly. Increasing taxes is unlikely this time.
One thing not being discussed much
is that they can raid the New Mexico Permanent Funds. Some people call them
“Rainy day funds.” The quick way is to confiscate needed financial resources
from the New Mexico Tobacco or other small funds.
The two funds with plenty of money are
the New Mexico Land-Grant Fund created in 1912 and the 1973 created New Mexico
Severance Tax Fund. It is dangerous to take money from these funds because these
two funds are set to provide about one seventh of the entire New Mexico budget
next year.
It is not easy to raid these funds
because legislators in the past realized the glimmering pot of money would be
quite attractive to politicians who only thought short-term. States like
California had vast financial resources which were taken in a short-term political
frenzy years ago. Now California is close to bankruptcy.
New Mexico’s budget increased more
than fifty percent under former Governor Bill Richardson from 2003 to 2010. It
went from about four billion dollars to almost seven billion dollars a year.
The long-term solution is to
increase the economy and the budget will be corrected as long as New Mexico
doesn’t elect another free spender like Richardson. There is never enough money
for free spenders.
New Mexico revenues are down because
the oil and gas industry is cyclically at a low point. It is a cycle but the government
increase is linear. There are always difficulties when the energy resources go
down.
Roy Blunt wrote, “The shortest path
to more American jobs is more American energy and more jobs that relate to
American energy.” That is what New Mexico needs however the problem for New
Mexico politicians is that the environmental lobby has lots of power and does
not want New Mexico to increase energy jobs.
So the source of money from the energy
sector may not be politically available to some legislators. There are no other
easily increased revenue sources. Raising taxes usually results in people and
businesses leaving the state thereby actually lowering collected revenues.
New Mexico’s government is still far
larger than just a few years ago with the same number of citizens. Ultimately New
Mexico’s state government is about creating jobs and political power. Tough decisions
cannot be avoided at this time.
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