The Roundhouse in Santa Fe (Photo by Peter St. Cyr)
Some senators want to consider revenue-raising measures; others think salary cuts may be necessary. Will they come together to reject the limitations the governor has placed on the session?
In his proclamation calling the Legislature into special session to address the state’s massive budget shortfall, Gov. Bill Richardson did his best to take tax increases and other revenue-raising proposals off the table. He did the same with salary cuts.
“Legislation concerning the objects in this proclamation shall not include measures reducing salaries or raising tax rates, reducing or eliminating tax credits, rebates, exemptions, or deductions, or imposing new taxes,” the proclamation states.
By law it’s up to Richardson to decide what topics can be considered during special sessions. The question now is whether Richardson’s attempt to limit the options for lawmakers tasked with plugging the budget shortfall will lead to the usual fight between him and the Senate.
That chamber’s majority leader, Michael Sanchez, D-Belen, hinted it might in a statement Saturday. Sanchez said the limitations the governor created “have raised some serious concerns in the Senate.”
“We are reviewing those limitations to determine whether there they are so restrictive that the Legislature will be able to adequately explore available options and fully carry out its constitutional duty to address the state’s budget issues,” he said. “We are hoping that we can work with the governor to find reasonable solutions for these serious fiscal issues.”
Lawmakers’ options
In an interview with the New Mexico Independent, Sanchez elaborated: Any lawmaker can introduce a bill. The Committee’s Committee decides whether it’s germane to Richardson’s proclamation and can be considered.
Several bills that would raise taxes or increase revenue in other ways have already been introduced.
Asked if the committee can overrule the governor’s proclamation, Sanchez replied, according to the Independent, “My understanding is that we are bound by the constitution. … We can make a political decision if that is what we want to do.”
If the Legislature passes a law not allowed by the governor’s proclamation, Sanchez said, “it would become subject to a lawsuit,” according to the Independent.
The other option, should the Legislature want to consider a broader range of measures than the governor has allowed, is for lawmakers to adjourn the governor’s special session and call their own extraordinary session, in which they make the rules. That would require the votes of 60 percent of the members in both chambers.
Of course, even in that scenario the governor would have to sign off on any bill that’s approved, unless lawmakers have the votes to override a veto.
Richardson’s budget proposal
Lawmakers and the governor are working to plug a shortfall of more than $200 million in last fiscal year’s budget — which many expect them to do with cash reserves — and a shortfall of $660 million in the current year budget.
While some have suggested raising new revenue to do so, Richardson has rejected calls to eliminate the 2003 tax cuts, close a loophole that allows out-of-state corporations to avoid paying state taxes and the raising of new revenue in any other way that involves new or increased taxes or fees.
Richardson had also, until Saturday, rejected calls to include public schools among agencies that would face cuts. But his new proposal would:
• Cut agency spending by 3.5 percent.
• Cut education spending by 1.5 percent, with a stipulation that cuts “must include safeguards that classrooms, kids and teachers will not be affected.”
• Use federal stimulus dollars “to prevent further cuts to education.”
• “Divert available short-term bonding proceeds from future capital projects to reimburse general fund for existing capital expenditures.”
• De-authorize “stalled” capital outlay projects.
• Delay fund increases to retirement and Retiree Health Care Authority funds.
• Taking unspent money out of state accounts.
Richardson said his plan would keep the state’s cash reserves at 5.5 percent.
And while he didn’t close the door entirely on approving revenue-raising measures in the future, he stood firm to his insistence that they won’t be considered during the special session.
“It would be irresponsible to rush into any revisions to the state’s tax code, and any changes now would have little effect on the current budget year,” Richardson said in a news release. “I will consider revenue enhancements during the January session as long as they have gone through a thorough review between now and then and can be proven to have a lasting, positive effect on the budget.”
An alliance of fiscal conservatives, progressives?
Richardson and the Senate have often been at odds, but the fight has usually been with the fiscal conservatives who control the chamber. Some of those members have insisted that there’s a need for across-the-board cuts that include slashing education and salaries.
The population of more progressive senators, which has grown in recent years, has been talking loudly and often about raising new revenue to address the current situation.
That’s what may be different during this session: Those two groups, which might not agree on how to fix the budget, may have a common interest in fighting the limitations Richardson is placing on the special session. Sanchez acknowledged the complexity of the situation in his news release.
“The drop in expected state revenues has left the Legislature with nothing but agonizing choices,” he said. “There is no easy path to a sound budget if we are going to address the approximately $660 million needed for 2010 Fiscal Year and not cause even greater problems for the 2011 Fiscal Year.”
The wrangling comes as a poll, conducted for an alliance of school groups by a respected polling firm, found that the vast majority of New Mexicans oppose public school cuts, while the majority are OK with some types of tax hikes.
Some 81 percent said they think lawmakers should balance the budget “without cutting public school funding,” according to a separate article by the Independent. Meanwhile, 70 percent backed a tax hike on alcohol and tobacco products and 61 percent supported increasing taxes on out-of-state corporations.
The poll of 400 registered voters, conducted by the Albuquerque-based Research and Polling Inc., has a margin of error of plus or minus 4.9 percent.
So the question now: Will the Senate pick a fight with the governor? We’ll know more today. The House is scheduled to convene at 1:30 p.m. The Senate’s session is scheduled to start at 2:30 p.m.