By Dan Foley
Now that the election is over and attention can once again focus on our great state of New Mexico, I would like to bring attention to the impending doom facing all of us. After six years of growing government, expanding programs and investing in things like a spaceport, the bill is coming due. We are beginning to hear reports of deficits reaching as high as $1 billion, all this in a state that has a budget of a little over $6 billion. The first question we have to ask is: How did this happen?
Of course I already alluded to the “how.” Over these past six years, we successfully did away with the surplus we inherited from Gov. Gary Johnson. Everyone liked calling him “Governor No,” but at the end of the day our state was fiscally sound with money in the bank, ready for any bump in the road.
Soon after the Richardson administration came into office, we once again filled all the state jobs Gov. Johnson had cut, and then some — nearly 2,200 altogether. Then the administration decided to take credit for all the surplus dollars the public school districts had rat holed, leaving them with nothing for a rainy day. (By the way, it’s about to start pouring.)
Then we up and got a train — tracks, rail beds, locomotives, everything — but no one knew who was planning to pay for it, or how much it would cost. (Turned out to be about 400 million bucks — coincidentally just about exactly the amount that was suddenly lifted out of the highway construction plans.) Then we were hit with the “spaceport” idea. Somebody convinced the governor and many members of the Legislature that it would be just dandy — and a “great investment” to boot — to build a takeoff and landing hub right in the middle of nowhere. They would call it “economic development” because rich people from all over the world would come to New Mexico to travel into space. And back down again too, they hope. Beam us up, Scotty. Take us out.
And those are just the discretionary spending disasters.
The rolls of Medicaid have grown almost out of control. Now people making even more than the median income in our state can have their insurance paid for by hard-working folks like you and me. Predictably, many people who could afford to have insurance in one way or another, most commonly through a payroll deduction plan with their employer, have dropped that, and have signed up — or at least signed their children up — for “free.” (It’s not really “free,” by the way.)
Meanwhile costs continue to skyrocket for regular taxpayers who are either paying as they go or footing their own families’ insurance costs. I have to tell you, the one thing the folks who champion these programs like to say is “Hey, it’s a three-to-one match for our state!” (They mean the federal government pays $3 for every $1 our state budget allocates for Medicaid.) This really exposes the thinking of these folks. First of all, three-to-one or not, our state treasury is now hemorrhaging cash for this program like never before. And second, it isn’t like the money from Washington isn’t our tax money too! It’s as if the liberals in Santa Fe somehow see the federal government as a going concern, making money hand over fist. Go figure.
A huge deficit
Add all these disastrously managed fiscal issues up and now estimates show we are staring at a $400 to $500 million deficit for next year, and maybe as much as $1 billion in the next 18 months. And no, it didn’t just sneak up on us. Everything I have just described was the result of ponderously careful, well-studied planning, lobbying and voting. It was dumb, but it has been carefully done. No accidents involved. No surprises either. There were voices and objections, counter-arguments and facts presented every step of the way.
We also need to ask ourselves how a state like ours that depends so much on oil and gas revenue gets into this situation? We were just experiencing record prices for oil and natural gas. We’ve had every opportunity, even with the horrible budget management, to build up enough revenue, just through our extractive industries, to weather even the ridiculous spending that I have described. But we haven’t done it. We haven’t taken advantage of the blessings God has bestowed on our land.
I can write about this for an hour, but let me just say that we have not been friendly to the very industries we rely on to fund all these hare-brained programs. The very folks in Santa Fe who love to spend money left and right couldn’t wait to kill the goose laying the golden egg. Why haven’t we experienced the record revenues other states with oil and gas reserves have experienced? The answer is simple. We alone have radical extremists in our state Environment Department, as well as in the Department of Energy, Minerals and Natural Resources.
These bureaucrats hate the very industries they are supposed to “regulate” and they pursue policies with a truly religious fervor. It isn’t theologically-derived religion, but one based on ideology. As a result, New Mexico extractive industries work under “rules” unique in America. These rules do nothing to help the environment, but they do everything to raise costs, discourage investment and drive exploration to Wyoming, Texas, California, Louisiana, Oklahoma, Colorado, offshore, and to many other emerging opportunities. As a result of this administration’s policies, our revenues are only a fraction of what they would otherwise be. And, most important, our environment is no better off.
The state should cut spending
I could go on and on about the things we have done to get us to this point, but I don’t have enough space to cover everything. So I guess I’d better move on to asking you, the readers, what you think legislators should do. Do you think they should raise taxes? Should they cut spending? Or an age-old favorite: “try to find ways to make government more efficient?”
I say start cutting spending. But I doubt the Legislature will have the ability — make that the will — to cut anything. As a matter of fact, I bet they just keep spending until we can’t pay the bills anymore. With the impending lawsuit coming from our public schools, that moment may be here sooner rather than later.
The Legislature should look at hiring a good bankruptcy lawyer. Maybe with all the new Democrats in D.C. and with President-elect Barack Obama in charge, we can have our rich uncle, you know the one, “Uncle Sam,” bail us out of this. We are at least as deserving as the auto manufacturers and credit card companies. That’s for sure. That’s probably a better approach than hoodwinking the voters in a special election again to raid our permanent fund, like the Richardson Administration did in 2003. Oops, I probably shouldn’t have brought that up. That’s where they’ll go next.
Foley, a Republican, is the outgoing minority whip in the New Mexico House of Representatives.