Bottom Line: special interests still rule the House. In the middle of the worst fiscal crisis in the state's history, House leaders stubbornly refuse to touch the fat in state government, opting instead to raise taxes to protect the accumulated pork of seven years of drunken-sailor spending. They will cut some programs for the neediest citizens, and they appear to be putting unwarranted trust in the federal government to come through with a state bailout. The Senate, far more responsible with our taxpayer money, is hoping to hold the line, but you can still expect modest tax increases and only a light trim on spending. There will still be plenty of special interest fat in the budget, and our taxes will go up.
House leaders have already killed a bill to cut out the $82 million giveaway to the Hollywood movie industry, even though we know this "incentive" to make films in New Mexico produces a return of 14.4 cents on the dollar. But this is one of the governor's pet projects, so, of course, taxpayers interests don't count. Instead, the House on Friday passed a bill raising gross receipts taxes by one half of one percent, to raise $300 million. More than one quarter of this amount will go just for the welfare check to Hollywood. Teachers unions are lobbying hard to keep salaries of teachers untouched by fiscal hardship, as though somehow they were more needy than, say, veterans or the disabled, or the mentally ill, who will all face cuts. After lavishing the governor last year with the "Best Education Governor of the Year Award," hey, aren't they entitled to more than their fair share? University professors will take a cut in salary. But who cares? They didn't do anything to make the governor feel better last year, so there!
Speaking of universities, a full year after the scandals of the unbelievably high salaries for the newly bloated top bureaucracy at UNM, nothing has happened to change this, not even the seriousness of the fiscal crisis. And after years of increasing politicization of that university, and a year after the faculty gave an unprecedented vote of no confidence for both the president and board of regents member Jamie Koch, and in the middle of other scandals at UNM, the Senate voted with only five dissenting votes to confirm Jamie Koch, the governor's buddy, to another term as regent. Rewarding failure? Yes, but only for the top levels, just like they do on Wall Street.
The Senate is likely to pass a bill (SB182) recapturing about $150 million from capital outlay funds encumbered but not used. This sounds like a sensible way of avoiding further cuts. About $11 million of this will come from Dona Ana County. Sen. Michael Sanchez has a bizarre plan to raise several hundred million through bonds that dig into the state's permanent fund, as I understand it. Knowing some of the Senate Finance Committee members, I doubt this will get very far. The governor already raided the permanent fund several years ago to raise the cost of education, and with zero accountability: we still have no idea what happened to that money, but we do know student performance did not improve one bit and that the NEA gave him a national award. Expect the Senate to raise gross receipts taxes selectively, raising maybe $75 million compared to the $300 million in the House version.
All in all expect the Senate to come up with an appropriation budgeted at about $5.2 billion, compared with a House appropriation of $5.6 billion. Let's see if the Senate has the guts to treat public education like everything else, with modest cuts. And let's see if they have the guts to cut the governor's $10 million equestrian center for Albuquerque, which was slipped in again this year.
Reps. Andy Nunez and Joseph Cervantes are sponsoring a bill to create a permanent revenue stream for colonias infrastructure. Sen. Papen will sponsor the bill in the Senate. Native Americans are asking for the same thing for their communities. A few weeks ago I posted a note about a meeting various legislators had with community leaders in Mesquite to discuss the upcoming legislative session. Basic infrastructure in the neediest areas of the county--not equestrian centers, or higher paychecks for teachers, or welfare checks to Hollywood--were uppermost on their minds, very different priorities. It's good to know somebody in Santa Fe is fighting to do right for the South Mesilla Valley.
Grades: to the House: These are not normal times. We have a fiscal crisis on our hands. For failing to cut the fat, for demanding that taxpayers dig into their pockets to keep funding fat, and for failure to spread the pain evenly: D- so far this session. I know you can do much better than this.
To the Senate: Solid B so far, in spite of the vote on Koch. Could end up with an A if leadership is willing to keep fighting the battle of the fat and hold the line on spending.