© 2016 Michael Swickard, Ph.D.
Running for office has little to do
with fixing New Mexico’s financial problems. In fact, it may make our problems
worse since running for office often entails making elaborate promises to spend
more money. We don’t have more money, we have less. The problem is two-fold.
First, in the last New Mexico Legislative
session in January New Mexico legislators put in the budget a far rosier revenue
projection than what has actually been collected this year. No amount of posturing
by politicians can change this shortfall. Hard choices must be made since New
Mexico is spending more money than available.
New
Mexico’s budget is unlike the federal government since New Mexico cannot spend
more money than it has. The New Mexico Constitution is clear that New Mexico
cannot deficit spend.
The
New Mexico 2016 budget is running in the red and it is likely the same problem
will be for the 2017 budget when the Legislature meets next January. Some
people running for office have not worried about this problem since they put their
entire attention on winning their election. Now the price for victory will be
paid.
One
of two things must be done. New Mexico must spend less or collect more. Perhaps
they could do both. Raising taxes is problematic since it is dynamic. The
higher the tax rate goes up, more New Mexicans will take legal actions to avoid
those taxes. I didn’t say evade which is illegal, rather, they will avoid them.
One
dramatic way is to move to a state with no state income tax such as Texas.
While a pain in the keister to move, it does happen and the New Mexico budget
suffers. The legislators could retroactively tax which would make it hard to
avoid paying the tax but that would also drive taxpayers out of the state.
New
Mexico has a great climate and yummy green chile but there are states near that
have good climates and no state income tax. Yes, you would have to change the
spelling to chili which doesn’t impress me. The state could tax businesses more
but again it causes some businesses to leave and therefore less rather than
more money to be collected.
The
sensible thing would be to cut the budget down significantly but the big
spending party ran the political table in much of the recent election so I do
not expect this to happen. Promises of more money for many things were made and
were rewarded with election victories.
What I am hearing is that these are
extraordinary times so extraordinary actions are needed. New Mexico has lots and
lots of money in Permanent Funds which are not supposed to be touched. But this
is extraordinary.
Some people wish to spend money from
NM’s Permanent Funds. It won’t be easy but it can be done. Should it be done is
a better question. In a word: no. Alaska is in a big political whirl because
the residents are used to getting lots of money for being a resident and the
decline of oil revenue is making this impossible.
New Mexico’s troubles likewise go to
oil and gas revenue which is not providing as much support as the legislators
want to spend. The budget over just a few years has gone up fifty percent but
going down ten percent for some legislators is out of the question.
This January New Mexico has the best
chance to solve their financial woes without an election immediately on the
horizon. Regardless, some wish to confiscate NM’s Permeant Funds and go on a
spree of spending the likes of which this state has never seen.
One day the Permanent Funds will be
gone. These politicians will sneak out of public service with their retirement.
It will be our children’s problem. I refuse to betray them this way. I hope you
will refuse also.
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