Tim Jennings
Current fiscal-year shortfall could top $700 million; reserves also need to be drawn down another $224 million to deal with last year’s shortfall
As New Mexico’s economy continues to worsen, every New Mexican needs to prepare for the tough economic times ahead. It is unfortunate, but New Mexico’s fiscal situation is getting worse and I think we need to be prepared.
Everyone needs to understand and take note that we all must make wise economic choices individually, as a family, and in government — the last for which the Legislature is primarily responsible.
There is no easy way out of the state’s fiscal crisis in the short run. We must open our eyes and move forward to deal with this situation in an expeditious manner. Putting our heads in the sand will not work. Making piecemeal decisions in government spending will ultimately visit us again and again, causing more pain in the future.
We are short huge amounts of recurring dollars and so we must make huge recurring expenditure cuts. We need to return to the core budget and deal with the problem there, not cover a recurring problem with non-recurring dollars. Glossing over the facts or wishing it away will not work.
Recent revelation that the executive still does not have a clear understanding of what New Mexico’s prior fiscal year tax collections are leads me to believe that the Legislature is not receiving accurate information from the executive. There appears to be a need for greater shared responsibility for developing revenue projections and the proper disclosure of these estimates in a timely manner.
One possible solution would be to expand the Legislature’s oversight powers of the executive branch by establishing an independent accounting office to ensure that the best information is available as we make the hard decisions with which we are faced.
Recently, the Department of Finance and Administration revealed that New Mexico’s fiscal crisis has worsened since the last revenue projections were released just two months ago. New Mexico’s shortfall in the prior fiscal year (FY09) has probably increased by an additional $107 million to a staggering $400 to $450 million. It appears now that the FY ‘10 budget is at least $550 million short of recurring revenue and possibly could grow to $700 million or more below the current year budget.
The executive will need legislative authority to draw down reserves by an additional $107 million just to close the prior year fiscal year (FY’09). This is in addition to its August estimate of $117 million, for a total of $224 million.
We cannot ignore this crisis, and must deal with it in a caring but prudent manner. This drastic decline in revenue means that we all must be prepared for substantial budget cuts to all of state government, including public schools and higher education.
These are tough economic times and we must pull together to solve this problem with the least amount of harm to all New Mexicans.
Jennings, a Roswell Democrat, is the president pro tem of the New Mexico Senate.