By Tom Taylor and Keith Gardner
On behalf of the House Republican caucus
New Mexico is in the middle of a fiscal crisis and, once again, the Democrat majority refuses to make the necessary changes to ensure we have enough money for the next year. The House Republican caucus voted “no” last week on House Bill 2, the budget bill, because it will not fix New Mexico’s fiscal problems.
The Legislature had a choice — use a Band Aid and temporary money or set a new course of change for the way business is done. This budget is unfair to New Mexicans and depends too heavily on the federal stimulus money that has not yet arrived.
The state is gambling on the future based on overly optimistic projections of oil and gas revenues. There was a $450 million budget shortfall this year because, last August, the Legislature predicted oil and gas revenues to bring in more money than they actually did, then continued to spend that extra money without restraint.
Instead of learning the lesson, once again the budget is based on rosy projections from oil and gas revenues, depending too much on the one-time, non-recurring federal stimulus money. Instead we should build state reserves to prepare for the day when the stimulus money runs out or we face another economic slowdown.
Relying on the federal stimulus package to help close the budget gap is like spending your Christmas bonus six months before Christmas. The just-approved budget spends $164.7 million in federal stimulus money for the state equalization guarantee and $166.5 million for Medicaid. Without this federal money, general-fund spending would be considerably higher, and now we are using federal dollars to pay for recurring spending — a recipe for disaster when the stimulus money evaporates in 27 months.
Government needs to go on a diet
As the Republican caucus has said before, government needs to go on a diet. We are overweight and are doing nothing to make us healthy. There is little effort to reduce spending to address declining state revenues. Combined with the federal stimulus money, the general-fund spending contained in House Bill 2 for 2010 is nearly identical to the level of spending for 2009, post-solvency. Although state revenues are still declining, state spending (with the help of federal stimulus dollars) remains unchanged.
In other words, we need to look at the budget like a household budget: When there is an unexpected decrease in the money coming into the family, unnecessary expenses are cut in order to pay for the mortgage, car payments, etc.
The Legislature missed another opportunity to change the way the state does business. The newly passed budget contains no reforms in how we educate our kids, deliver cost-effective health care, improve public safety or provide a whole range of others services. The House Republican caucus believes New Mexicans deserve a fiscally responsible budget — a budget that sets aside money to deal with state emergencies, and does not borrow from future budgets and improves state services.
New Mexico state government needs to change and the business-as-usual approach to spending must stop if we want New Mexico to be a thriving state with unlimited opportunities for future generations.
Rep. Taylor is a Farmington Republican and the House minority leader. Rep. Gardner is a Roswell Republican and the House minority whip.