ALBUQUERQUE, N.M. (AP) - State employees could face the prospect of furloughs as New Mexico considers closing museums and other cultural sites and limiting the time children are in the classroom as officials look to save cash in the midst of what Gov. Susana Martinez on Monday called a crisis.
Martinez outlined the state’s grim fiscal outlook during a luncheon attended by business leaders. She spoke about the recent legislative session and her disappointment that lawmakers crafted a budget dependent upon hundreds of millions of dollars in tax increases and fee hikes.
She vowed not to sign any of the tax measures and said she would soon be calling lawmakers back to Santa Fe to renegotiate the $6.1 billion budget for the next fiscal year and to address the shortage of operational funds for the current year.
Cash reserves are dwindling, which will soon leave state finance officials unable to cut checks. The governor warned that will affect the state’s ability to make payroll and pay contracts.
“We are facing a crisis, and this has become truly a result of the inaction of our Legislature,” Martinez said. “We are staring down the path of a government shutdown.”
The governor instituted a statewide hiring freeze for all non-critical jobs last week in an effort to stretch the state’s operating funds. The move follows cuts to executive agencies enacted late last year before the legislative session.
As the Legislature’s budget and taxation proposals for the coming fiscal year reached the governor’s desk on Monday, Democratic Senate majority leader Peter Wirth emphasized that lawmakers provided Martinez with the tools to stabilize state government finances.
“Alternatively, she can continue to jeopardize our state’s credit rating and lead our state towards the government shutdown she seems determined to make a reality,” he said in a statement.
Financial solvency was first addressed during a special legislative session last fall and again at the beginning of the 60-day session that started in January. The problem stems from a stagnant economy and the downturn in the oil and natural gas industry, which accounts for nearly one-third of revenues that bankroll New Mexico’s government programs.
Even if the governor were to back down from her promise not to raise taxes, the governor’s office says signing the proposed budget would do nothing to alleviate the current shortage.
Still, a few dozen protesters with the state Democratic Party and teachers unions demonstrated outside Monday’s luncheon. Their signs called for the governor to save school funding and not to make cuts. To the clanging of a cow bell, they chanted: “Sign the Budget.”
“We cannot just cut our way out of this mess,” Democratic Party chair Debra Haaland said. “We need some added revenue so we don’t have to cut programs and things people really need.”
The governor argued that her proposed spending plan would have protected funding for the classroom and that the measure approved by the Legislature trims $22 million that could have paid for things like social workers in schools and more meals for low-income students.
Martinez told the crowd of business leaders that the Legislature refused to sweep more excess money from the discretionary funds of school districts to help make up the difference and that they protected their legislative retirement packages.
Democrats have rebuffed the governor’s criticisms, saying they passed a balanced budget and that they had no choice but to raise taxes.
The Legislature’s package had earned broad support among Republican and Democrats in the Senate to shore up spending on public schools and state agencies by collecting new taxes and fees on nonprofit hospitals, vehicle and gasoline sales, trucking permits and online retail purchases.
Martinez said Monday that talk about raising the cost of living through higher taxes has already cost the state close to 2,000 jobs. Citing non-disclosure agreements, Martinez said she could not identify the companies that had been considering New Mexico.
While the timing of a special legislative session is still uncertain, Martinez said doesn’t want to institute furloughs next month, saying even one day off for a single parent can have a big effect on family finances.
“It is a dire situation, and it is up to us as leaders to fix it,” she said.
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