Tim Jennings
The New Mexico Legislature returns to the State Capitol this week to complete work on a budget for the upcoming fiscal year amid certain unyielding realities: State tax revenue is way down, federal funding that helped the state get by, so far, is ending soon and the economy is not recovering nearly as fast as anyone had hoped.
The New Mexico Senate recognizes these realities and, while taking no joy in it, is committed to approving a responsible state government spending plan that relies just as much on less spending as it does on more taxes.
The fiscal crisis in which New Mexico government finds itself is not temporary and will not be overcome with temporary solutions.
The state is expected to receive just $4.8 billion this fiscal year – $1.2 billion less than two years ago and a level not seen in years. Revenue for the next fiscal year – the budget that the Legislature is working on right now – is projected to be $5.1 billion, or 6 percent more than the state is receiving this year.
But no one I know who runs a business is planning on revenue growth of 6 percent, and no workers I know are counting on getting a 6-percent pay raise next year, so it is hard to imagine that state revenue from personal income taxes, corporate income taxes and gross receipts taxes will grow that much next year. If growth is only 2 percent, the state will be short $200 million.
Compounding the problem is that the state is counting on $200 million in federal funds for next year’s state budget that will not be available after that year. The state will have to make this up in fiscal year 2012’s budget.
I applaud and am proud of the Senate’s resolve to responsibly address this fiscal crisis. New Mexico government will continue to play a strong role in educating our children, providing health care and healthy meals for residents who would otherwise go without and protecting our streets and neighborhoods.
But there is a limit to how much taxes can be raised to cover state government spending. Now is the time to balance tax increases with spending cuts and enact a sustainable state government spending plan.
Working together, we will get through these difficult times.
Jennings, a Roswell Democrat, is the president pro tem of the New Mexico Senate.