Guv wants to spend windfall revenues on health care

The battle over health-care reform continued today when Gov. Bill Richardson announced a large revenue windfall attributable to rising oil and gas prices and said that means the state has the money to fund universal health care.

The chairman of the Legislative Finance Committee disagrees, and says some of the money should be given to taxpayers to combat high gas prices and some should be used to fix roads.

Richardson announced today that executive- and legislative-branch analysts project that the state will have $392 million in new money for the upcoming budget year and another $1 billion for one-time spending projects. A news release from the governor’s office said the new money “will be on the table when he calls the Legislature into a special session to address access to universal health coverage.”

Richardson has vowed to call a special session later this summer.

“We can invest in health coverage in a fiscally responsible way,” Richardson said in the release. “While cynics will no doubt complain about using revenue from oil and gas, I am confident — as I have been for the past six years — that New Mexico’s economy is performing well and will allow us to expand health care coverage to all New Mexicans.”

Richardson pointed to a national report that said New Mexico’s economic growth was the 12th strongest in the nation in 2007. He also pointed out that the state’s unemployment rate is lower than the national average.

Sen. John Arthur Smith, LFC chairman, told The Associated Press that the money should instead be used to provide a tax rebate to New Mexicans and to help cover a highway financing shortfall of at least $500 million. He told the news service that oil and gas revenues are too volatile to use for a permanent health-care expansion.

“If the governor still wants to stay that course on health care, I think he needs to suggest how he wants to raise taxes to the tune of $165 million a year,” Smith told the news service. “We need something that is reliable and recurring to satisfy that need. The dollars that we have, by my way of thinking, are not going to be sustainable. I wish they were but I am just very, very apprehensive about it.”

The new money would grow the state budget from $6 billion to about $6.4 billion in the 2010 budget year, according to the new projection. Richardson’s finance secretary, Katherine Miller, said in the news release that the state’s economy continues to grow “despite national conditions that are resulting in severe deficits in other states.”