Invest new dollars in New Mexico

There’s an old proverb, “No cuentes los pollos antes de nacer” — one shouldn’t count their chickens before they’re hatched. Meaning that it’s foolish to assume that every egg laid is going to result in a healthy chicken that you can sell at market.

It’s a cautionary adage that the state Legislature would be wise to follow.

New Mexico lawmakers are now gathered for the annual creation of the state’s budget. They have an estimated $330 million more in state funds than they did last year. The federal tax package that recently passed also might bring more new money into the state’s coffers.

Despite the fact that this money has yet to materialize, some lawmakers have been talking about sending it back to the taxpayers in the form of a rebate. But the preemptive chicken-counting doesn’t end there. Some lawmakers also want to give some of the money away in the form of tax cuts that business lobbyists have been pushing. (We’re always told that these tax cuts will lead to new jobs, but those jobs haven’t materialized yet, either.)

There are so many reasons that these are both bad ideas. It’s hard to know where to begin, but we’ll start here: The $330 million in additional money is based on estimates, which in turn are based on the fact that oil and gas prices are higher than they’ve been for a while. While that’s been good news for the state, oil and gas prices are notoriously volatile. What’s more, a significant downturn in the stock market, predicted by some, could send those revenue estimates over a cliff.

We’ve been here before. Toward the end of the Richardson administration, the state was flush with funds, thanks in large part to even higher oil and gas prices and the housing bubble. Lawmakers decided to return some of that money to the taxpayers as tax rebates. Not long after, the housing bubble burst, the stock market crashed, and the state went from flush to flat broke.

The resulting recession led to nearly a decade of spending cuts that have devastated our schools and universities, hollowed out our court system and crippled the state’s ability to provide critical services, which has severely affected New Mexico families. To make matters worse, massive tax cuts for corporations were enacted. Not only did they end up costing the state more than was estimated, they also failed to produce any of the promised jobs. While the state was pulling in significantly less revenue in corporate income taxes, oil and gas prices took a dive, killing a big portion of those revenues.

We seem to finally have crawled out of the revenue ravine, and some legislators want to place us back on the edge of that same fiscal precipice? Sounds suicidal.

If that history lesson doesn’t sway you, consider this: The state is facing hundreds of millions of dollars in backlogged tax refund claims because it doesn’t have the staff to process tax forms in a timely manner; these same staff shortfalls have also led to problems collecting taxes that are owed to the state; we won’t really know how the federal tax changes will impact the state’s bottom line for at least another year; and congressional leaders are talking about greatly reducing the money sent to states to cover health care and other services, which would blow a serious hole in the state budget.

But here’s the most important argument for not giving unrealized revenue away: New Mexico is in desperate need of investments in its vital systems, such as education, health care and public safety. We’re funding our K-12 education system at lower levels than before the recession on a per-pupil, inflation-adjusted basis. On that same basis, we’ve slashed higher education funding by nearly one-third, causing tuition to skyrocket. We’ve made New Mexico a less attractive place to practice medicine by slashing Medicaid reimbursement rates for doctors. And our court system has been bled so dry that, in some jurisdictions, public defenders are unable to take on any more new cases. Unable to provide a constitutionally mandated public defense, or to hold people indefinitely, the courts will eventually have no choice but to release individuals in custody.

So we’re not only counting our fiscal pollos before they’ve hatched, we’ve also been starving the hens. If we’re not careful, we’ll end up collapsing the whole coop.