Senate Finance Chair John A. Smith: Budget Passed Requires 6% Economic Rebound This Year

Senator John Arthur Smith expressed concern that revenue projections Governor Richardson and the legislature relied on in authorizing a $5.6 billion budget two weeks ago are overly optimistic. Unless revenues increase by 6% during the second half of 2010 the legislature will have to meet again to make further cuts. Smith said at the current rate of decline, there will only be $4.8 billion in revenues--not $5.6 billion--as the price of natural gas continues to decline, and as revenues from other tax sources continue to decline. Should the governor veto the so-called "food tax," Smith said the legislature will have to meet immediately just to get us through to July 1 of this year. He also expressed concern that the stimulus package was used to "plug in holes in revenue with one-time-only money." Since the funds were used largely to maintain current levels recurring expenditures, when they run out, more cuts will have to be made unless the economy rebounds strongly.

Rep. Joseph Cervantes indicated the legislature has been "limping" along in this fiscal crisis, "just getting by" without solving the long term problems in the budget. Apart from this overall failure, Cervantes indicated the fact that everyone went home unhappy was a good sign, that pain at least is being distributed across the board.

Some of the most influential senators in New Mexico spoke at the Fire Station in Mesquite last night at a function sponsored by the Mesquite Community Action Committee. President Pro Tem of the Senate, Timothy Jennings, Senate Finance Chair John Arthur Smith, Vice Chair of the New Mexico Finance Authority Oversight Committee Mary Kay Papen, Chair of the Senate Education Committee Cynthia Nava, and Majority Whip Mary Jane Garcia, all spoke about the Special Session that ended less than two weeks ago in Santa Fe. Reps. Joseph Cervantes and Mary Helen Garcia, who represent the South Mesilla Valley, were also on hand.

Jennings defended the increase in the food tax, saying "it was the only stable tax we had" to deal with the shortfall, guaranteeing that revenues would be there to pay for state government. Other tax increases, such as increasing taxes on corporations, or the extractive industries would have left us subject to stronger declines should the economy not turn around.

Martin Lopez, manager of the Mesquite Water system (now part of the Lower Rio Grande Water Users Authority) expressed gratitude that the Colonias bill, carried by Sen. Papen in the Senate with strong support from Reps. Nunez, Cervantes, and Garcia, but added that the executive branch still has work to do in allowing water systems to seek funding from that source. Sen. Nava explained the workings of HB 100, which she helped steer through the legislature, permitting fire chiefs to use certain funds for gasoline expenses incurred by firemen in the course of their duties. This bill originated in a meeting held in Mesquite on Dec. 17 last year, at which Sen. Nava was present. Sen. Mary Jane Garcia explained her role in helping through the Colonias bill, as Majority Whip of the Senate.

Commissioners Karen Perez and Oscar Butler were present as well. Perez reiterated the need to find mechanisms to allow the efficient expenditure of funds in projects requiring county, federal, and state funds to avoid un-necessary delays duplication of efforts in projects like the Berino Road.

Butler asked the senators what they did to stop un-necessary spending, such as the "double-dipper" problem, the governor's pet film industry credit, and consolidation of agencies to save costs. Senators Jennings and Smith, while pointing out concrete steps taken to eliminate waste, such as solving the double-dipper issue, admitted more could have been done to curtail costs. Seconding Butler, Jesus Caro, Trustee in Mesilla, criticized the failure of the spaceport project to result in jobs in Southern New Mexico, and other expenditures that could have been cut, such as the film credit, especially in the middle of a serious recession.

We often complain we are forgotten in Santa Fe. Last night was a reminder that the center of gravity of power in the Senate is held by Southerners. It is up to us to try to gain access to it. The discussion was open, candid, with a lot of give and take.