Editorial: No new money in the state budget
Gov. Susana Martinez laid out a number of new proposals to increase spending for worthy causes Tuesday in her State of the State address.
More family support workers for the Children Youth & Families Department, child abuse case workers, corrections staff to track court absconders and State Police officers, as well as pay raises for public safety workers. More money for mental-health treatment. More money for pre-kindergarten and reading intervention. Increased salaries for starting teachers. More money for economic development and job training. And that doesn’t count the additional money for courts and corrections that will be needed if all of the proposed crime bills go through.
One day later, New Mexico State University economist Jim Peach shot it all down.
The governor and Legislature both prepared their initial budgets based on the December consensus revenue estimate, which predicted $232 million in additional spending would be available. Both worked that new money into their initial budgets.
But Peach warned Wednesday that, because of falling oil prices, the state should not count on having any new money at all this session. The December projection was based on oil selling at $44 a barrel, Peach said. It was down to $27 Wednesday.
It is estimated that for every $1 drop in oil, the state loses $10 million to $15 million in revenue. Peach said that while the price of oil can bounce up and down in the short term, the long-term forecast is for supply to remain higher than demand, keeping prices down.
Peach also noted that revenue from gross receipts tax collections was not meeting earlier projections.
Senate Finance Committee Chairman John Arthur Smith, D-Deming, said that with new Medicaid and education commitments the governor and the Legislature both agree on, there likely won’t be much left to fight over.
The next consensus revenue estimate will come next week, but we think lawmakers would be wise to heed this warning, and be very conservative with any new spending as they begin finalizing the budget.
The governor also made mention of ethics reform in her State of the State address. Unfortunately, she has not yet issued a message that would allow for meaningful ethics reform legislation to be heard. Because this is a 30-day session, any issue not directly related to the budget must be approved by the governor before it can be considered.
She has thus far allowed for only a single piece of ethics legislation designed to restrict conflict of interest among legislators. While that bill may be a slight improvement over current law, it would do nothing to address the erosion of confidence in state government caused by the arrest and conviction of Secretary of State Dianna Duran, as well as ongoing investigations into Tax and Revenue Secretary Demesia Padilla alleging she used her office to give preferential treatment to a former employer and into the fundraising activities of Jay McClesky, the governor’s top adviser.
We believe it is important that a wide range of ethics measures be considered this year, and urge the governor to allow that to happen.
This editorial was written by the Las Cruces Sun-News.