New Mexico’s next governor and the Legislature, and the people they both represent, will face a monumental fiscal challenge in just a few short months.
The recent news from Santa Fe has been grim — a worse-than-predicted state economy is forcing more spending cuts in already underfunded agencies — but the reality is that the news will only get worse. Budget cuts to a few critical, high-profile programs have been lessened by an infusion of federal stimulus money, but that dwindling pot of money will soon be gone and, with it, the temporary relief it provided.
Gone also will be the healthy cash reserves in the state’s coffers, as well as the money transferred from several funding sources to the general fund.
During the upcoming session, legislators and the governor will be forced to make the tough decisions that up to now have been avoided by using those temporary fixes. The options that remain are cutting expenses, raising more money, or a combination of both. But, the real challenge for policymakers is how those options will be implemented.
Honesty, collaboration and cooperation
As the next governor and the Legislature face this challenge, they must do so with an unprecedented level of honesty, collaboration and cooperation. There will be no room for grandstanding or blaming others, and all opportunities to further delay making the real decisions to solve this problem will have evaporated. Politics plays an important and valuable role in our society, but it has no place in the serious business of governance. Successfully dealing with the challenges will require the work of policymakers, not politicians.
Every New Mexico family that has ever faced stagnant household income knows what awaits policymakers. While there are no easy answers, there are opportunities for smart decisions. Just as eliminating non-essential spending is prudent for a family, eliminating wasteful spending in government is critical to solvency. Policymakers should know, as New Mexico families do, that some cuts are feasible, but not all cuts.
For example, shutting off electricity may save money in the short-term, but it is not a viable option in the long-term. Similarly, cutting education or health care for the indigent may save money in the short-term but will have long-term negative effects.
Optimistic that we will succeed
Even after making all sensible cuts, families (and government) can still be in financial peril. At that point, raising money isn’t an option; it is a requirement. The challenge is to find ways to increase revenue without placing additional burdens on those already struggling. Meeting that challenge requires a candid look at our resources and an environment that welcomes innovation. Policymakers, like families, must determine the best use of assets accumulated during better times.
That is not to suggest that assets be sold or diminished. Rather, leveraging assets to produce additional revenue, such as selling bonds against the permanent fund, needs to be fully explored.
While I am concerned about the challenges we face in the next few months, I remain optimistic. New Mexico has a long and proud history of confronting and overcoming adversities. Our strength is best demonstrated when we work together to achieve our goals. By considering every option to cut unnecessary and wasteful spending, striving to minimize harm from spending cuts that are impractical and irresponsible, and exploring alternatives to revenue-raising while avoiding actions that threaten New Mexico’s economic recovery, we will succeed.
Sanchez is the Senate majority leader.