The legislature is preparing for the last week of the session. Looks like the budget will come in at about $5.5 billion, roughly $750 million lower than the budget approved last year, which then had to be trimmed this year due to a drop in current revenues. At $5.5 billion the budget is on a rickety platform, with a lot of "ifs" supporting it. If revenue forecasts hold up (oops, the price of natural gas in Farmington went down this week), if the stimulus package from the feds prevents a further decline in the economy, and if the legislature acts responsibly this week, the state may be able to generate enough revenue to pay for the budget. If not, further cuts will have to be made down the line.
Among the things you might keep your eye on: The College of Santa Fe. Will the legislature acquire this venerable private, but bankrupt, institution? Powerful Rep. Luciano "Lucky" Varela, from Santa Fe, and the Governor would like the state to acquire it on a bailout plan, but it is $30 million in debt, and a bailout would acquire those debts. The board of regents at Highland University announced they would buy it, but the Governor would now prefer the University of New Mexico or perhaps a consortium between the University of New Mexico and New Mexico State to run it. While the House approved $3 million to run the college next year, the Senate Finance Committee pointedly removed it from their budget. Can the Governor get it brought to the floor and pass it? Sen. John Arthur Smith is concerned that the institution, which could not make a go of it charging students tuition of $26,000 per year, would end up gobbling up a lot of money out of the state's university budget. If tuition dropped to $4000, taxpayers would be, in effect asked to pick up $22 million per year just to cover those revenues for 1000 students. The bailout costs might be a lot cheaper if the insitution is allowed to go bankrupt, cancel out the debt owed, and renegotiate a buyout. But that still leaves unanswered the question of whether the state really needs to subsidize another institution of higher learning in New Mexico, even one that appears to have been quite excellent, particularly in the arts. Given the highly politicized mess that higher education has become in recent years, don't expect the Senate to give the Governor a blank check.
The Education Budget: The Governor would also like to increase funding for education by 15%, tied to a separate bill to change the formula (see the two stories, below, on HB 331 and HB 346), and yet another bill that would increase the school year by 5 days. If the Governor can get a floor vote on this bill, it could conceivably pass, since the Senate gained a couple more liberal seats this year, and the educational establishment would like to see this one pass. But don't count on it.
Ethics Reform: Recent corruption scandals have led to a good deal of posturing about ethics reform. More than 40 bills were introduced. But ethics reform bills have a way of not quite mustering enough votes, or else getting watered down with provisions that weaken the effect. The only substantively important bill that has been passed the Senate so far is a bill that would limit campaign donations for most offices to the federal limit of $2300 per person per year, and with limits on the amount that can be given to PACs and parties, from PACs to candidates, and from parties to PACs. This makes it more difficult for the kinds of creative financing that has been going on for several years in ways that severely compromise the independence of candidates from interest groups, party leaders, and PACs. But the bill will not go into effect until 2011, after the next election cycle. Senate Majority Leader Michael Sanchez has been criticized severely for arguing against some of the ethics bills, on the grounds that "we're not bad people." But it was Sen. Sanchez who took the 2013 sunset provision off the $2300 limit, which greatly strengthened the measure. When the dust settles next week, we will see how much courage the legislature had to do the right thing to reduce the chances of corruption. Don't count on too much