Budget Woes Draw Near

By Lance Chilton

What will happen with New Mexico’s endangered state budget this year? Of course, all government budgets are in trouble – federal, state, county, city, yours and mine. The federal budget will run a huge deficit, but New Mexico’s can’t – our constitution forbids deficit financing. By some estimates, the New Mexico budget for the current fiscal year 2020, ending June 30, would show a deficit of $400 million, with a $1.5 million gulf between estimated revenue and the budget for fiscal year 2021 passed by the Legislature just 2 ½ months ago. A special session of the Legislature, called by Governor Luján Grisham, is certain to occur in the next month or two to balance matters.

Voices for Children, an advocacy group for families and children based in Albuquerque, divided up the budget, and arrived at this breakdown:

  • Early education, $93 million (2%)
  • K-12 education, $2.42 billion (42.2%)
  • Higher education, $722 million (13%)
  • Health and human services, $1.4 billion (25%)
  • Public safety, $627 million (11%)
  • All other, $291 million (5%)

Although the total budget has increased from $5.6 million in 2017 to $7.6 million allotted for fiscal year 2021, the relative percentages haven’t changed much, though money has been added in each of the last three budgets for early childhood. So if the legislators and the governor want to simply cut the budget, they will be faced with only unpalatable choices: Cut health care during a pandemic when many people are out of work and suffering? Cut early childhood education, while many believe that more investment in this area will save costs and outcomes later? Cut grade school education in the wake of the court decision that New Mexico isn’t investing enough in education? Cut higher education as our colleges and universities suffer? None of those? But all the rest, including public safety are less than 20% of the budget.

Rep. Debbie Armstrong, Rep. Gail Chasey, Rep. Javier Martinez, Sen. Bill O’Neill, Sen. Jerry Ortiz y Pino, and Rep. Andres Romero, all running for re-election this year (all 112 seats in the Legislature are up for re-election or replacement this year), held a virtual town hall on May 4, and most of the 100-minute session revolved around what to do with the budget.

There appeared to be consensus among the six Democrats and most of those asking questions from the audience that the shortfall, caused by plummeting oil and gas revenue and tax collections during the shuttered economy, should be plugged by raising new revenues. Proposals by the six legislators included reversing the tax cuts for well-off New Mexicans and for corporations enacted during the Richardson administration, using “rainy-day funds” previously set aside or tapping the massive permanent land grant fund, legalizing and taxing (and regulating) recreational marijuana, and using hoped-for federal stimulus and rescue money. Increasing taxes, especially with all citizens suffering, is never popular, but the alternative, deep cuts to the budget, may be worse, the participants appeared to agree.