Lawmakers, gov get NM on better financial ground

This week the state Legislature and Gov. Susana Martinez got New Mexico a step closer to budget solvency — actually $190 million steps.

Did lawmakers give the governor everything she wanted in three solvency packages? No. Did the governor rubber stamp all of their suggestions? No. And in a multi-branch system of democracy, that tends to be how things should work: Nobody gets everything they want so that most people get what they need.

First, kudos to all of the lawmakers who attacked the current fiscal year’s $69 million budget shortfall even before the legislative session started Jan. 17. They deserve credit for their service to taxpayers, and for focusing on the job at hand.

Martinez took her veto pen to their carefully crafted solvency plan and sliced around $26 million worth of proposed cuts and other budget fixes from one of the three solvency bills.

Senate Finance Committee Chairman John Arthur Smith, D-Deming, a fiscal pragmatist, says cutting those cuts won’t do “a lot for our reserves and our bond rating.”

And in the short term he’s likely right. The deals mean the state has just $120 million in reserves — or less than 2 percent of spending — for fiscal 2017, which ends in June.

But when average New Mexicans are faced with the choice of dipping into their savings or cutting essentials, they do the former. That’s exactly what Martinez asked school districts to do — to use their cash balances that are over the amount they are recommended to keep in reserves to cover some of their operational obligations.

State lawmakers agreed, albeit at a lower amount ($46 million vs. $120 million).

Reducing a school district’s savings account should not adversely affect classrooms — despite the hue and cry the Albuquerque Public Schools administration raised earlier this month, complete with offering teachers and parents the scare tactics of looming layoffs and furloughs.

APS had cash reserves of $53.9 million at the end of last fiscal year.

As for the Martinez line-item vetoes, they are judicious and aimed at investing in the state’s job and built environment.

She restored a cut to the Local Economic Development Act (aka the closing fund) that is used to brings jobs and business to the state and is how we can compete for and seal deals with companies looking for places to develop or expand operations. A couple of recent examples include Facebook in Los Lunas and Safelite AutoGlass in Rio Rancho.

Those deals in turn create jobs, as shown by Wednesday’s announcement of a $37 million contract with two Albuquerque solar companies to build Facebook’s power system. The so-called “Facebook effect” means paychecks and infrastructure that go beyond the sought-after company.

The governor also rejected a $4 million cut to the state 911 fund, likely because public safety is front and center in most New Mexicans’ minds. And she vetoed a $9 million raid on the state road fund, which is already severely depleted by annual payments to finance the Rail Runner commuter train and other projects. As roads deteriorate they only get more expensive to repair/rebuild, and New Mexico cannot drive into the future on crumbling highways and bridges just so two state agencies don’t have to face budget cuts with everyone else.

The governor also rejected an additional automatic 1 percent spending cut for state agencies that would have kicked in if projected revenues again fall short — new numbers are expected next month, and declining oil and gas revenues are what got the state here in the first place. Martinez said, “If further budget cuts are required, the Legislature should perform that function.”

And more cuts will likely be needed, as current projections for fiscal 2018 are for a $300 million to $500 million shortfall. But if the first two weeks of the 2017 legislative session show anything, it’s that when the budget going gets tough, New Mexico’s lawmakers and governor can make the required tough decisions.