{"id":4045,"date":"2008-12-05T16:30:00","date_gmt":"2008-12-05T22:30:00","guid":{"rendered":"http:\/\/www.nmpolitics.net\/index\/2008\/12\/nms-money-woes-will-force-painful-choices\/"},"modified":"2009-08-22T14:46:39","modified_gmt":"2009-08-22T20:46:39","slug":"nms-money-woes-will-force-painful-choices","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2008\/12\/nms-money-woes-will-force-painful-choices\/","title":{"rendered":"NM’s money woes will force painful choices"},"content":{"rendered":"

New Mexico really is in a dire financial situation, and solving it is going to be painful, not just for government bureaucracies but also for average New Mexicans.<\/p>\n

The bottom line is this: The sharp drops in oil and gas prices mean the state has a current fiscal-year budget shortfall of about $500 million — in a budget of about $6 billion. But that\u2019s not the extent of the problem. Forecasters predict that in the next fiscal year, the shortfall will be at least another $200 million.<\/p>\n

So the state has to come up with something along the lines of three quarters of a billion dollars during the 60-day legislative session that convenes on Jan. 20 — a session in which it has to figure out how to make ends meet in this year\u2019s budget and set the budget for the next fiscal year all at once.<\/p>\n

There\u2019s been talk about dipping into the state\u2019s reserves — it\u2019s so-called \u201crainy-day\u201d fund — to make ends meet. But that alone won\u2019t solve the problem.<\/p>\n

In October, forecasters predicted<\/a> that, at the end of fiscal-year 2009 (on June 30 of 2009), the state\u2019s reserve funds would drop to $378 million, or 6.7 percent of recurring appropriations. But oil and gas prices have continued to drop since that prediction was made. The new revenue outlook is set to be released on Monday, and several lawmakers have told me the revised number will place the reserves at 2 percent or less on June 30 unless lawmakers come up with another way to meet the shortfall.<\/p>\n

So, without budgetary cuts or tax hikes, the state will use up just about the entirety of its reserve funds by the end of June, leaving nothing in the bank and a shortfall of at least a couple hundred million dollars for the next fiscal year.<\/p>\n

And an uncertain economy that could still get worse.<\/p>\n

Oil and gas prices may drop further. The fact that New Mexico is so dependent on those volatile fuel sources for income is the very reason it\u2019s prudent to keep the state\u2019s reserves at 10 percent — something the governor and top lawmakers have wisely stated their intent to do.<\/p>\n

That leaves two options to deal with the financial situation: Make tough cuts to the budget or raise taxes.<\/p>\n

Lawmakers and the governor are already talking about capital outlay projects that can be cut, and they\u2019re hoping to come up with $200 million in one-time cash that way. But even that will be a battle. The governor is going to want to cut primarily lawmakers\u2019 projects, and lawmakers are going to want to cut primarily the governor\u2019s projects.<\/p>\n

Then there will be the question of how New Mexico comes up with several hundred million additional dollars on a recurring basis. Do our leaders slash services to New Mexicans or cut their jobs? There is some waste in government, no doubt, but I fear that important jobs and services will also be on the chopping block, unless we raise taxes.<\/p>\n

Any option is going to hit the state hard. We\u2019re all going to feel the effects.<\/p>\n","protected":false},"excerpt":{"rendered":"

New Mexico really is in a dire financial situation, and solving it is going to be painful, not just for government bureaucracies but also for average New Mexicans. The bottom line is this: The sharp drops in oil and gas prices mean the state has a current fiscal-year budget shortfall of about $500 million — […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-4045","post","type-post","status-publish","format-standard","hentry","category-haussamen-columns"],"_links":{"self":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/4045","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/comments?post=4045"}],"version-history":[{"count":0,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/4045\/revisions"}],"wp:attachment":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/media?parent=4045"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/categories?post=4045"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/tags?post=4045"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}