SANTA FE, N.M. (AP) - Concerns about New Mexico’s short-term cash reserves are taking center stage as state lawmakers await anticipated veto decisions by Gov. Susana Martinez on a budget for the coming fiscal year.
Top finance officials for Martinez said Wednesday that a $102 million operating reserve cushion will leave the state perilously close to insolvency when the fiscal year ends in June. Martinez is preparing plans to possibly furlough state government workers as soon as April and reduce the number of days that state museums, parks and motor vehicle offices are open to the public.
Leading lawmakers in the Democrat-controlled Legislature are questioning whether the Republican governor’s warnings of a government shutdown are justified or amount to a bargaining tactic in the larger state budget standoff. Legislators are concerned about dwindling state cash accounts as the federal government delays a major payment on an oil and gas lease sale.
Here are some things to know about the state budget and the political confrontation:
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CASH BALANCES
The Martinez administration and the Legislature are working off nearly identical estimates placing state general fund reserves at between $95 million and $102 million at the end of the current fiscal year in June.
The state has spent more than $600 million in reserves since mid-2015 because of reduced state tax revenue from a sustained downturn in oil and natural gas prices and a stagnant New Mexico economy.
Finance and Administration Secretary Duffy Rodriguez said waiting beyond April to reduce state spending puts New Mexico at risk of ending the fiscal year with a deficit, which would violate the state Constitution.
“The only thing we can do is to slow spending,” Rodriguez said.
Leading state lawmakers have said the governor agreed to current reserve levels near the outset of a 60-day legislative session that ended March 18, while vetoing additional solvency measures.
“We had an immediate budget deficit at the beginning of the session, we addressed it,” says Senate Majority Leader Peter Wirth, a Democrat from Santa Fe.
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UNCERTAIN SAVINGS
The governor’s financial advisers have said they do not yet know how much money might be saved through employee furloughs or state office closings. Critics have said the state’s vital tourism sector could be hurt by shutting state parks and museums and that savings may be modest.
The Legislature’s budget office estimates general fund savings of up to $1.5 million a day through furloughs. Crucial state services likely would be exempted from office shutdowns and furloughs - and those include government hospitals, state police, prison guards and child protective services.
Furloughs are also not planned for government agencies that receive heavy independent or federal government funding, such as the state Department of Transportation.
A network of 35 state parks costs $28.5 million to operate each year. The parks receive $8 million from New Mexico’s general fund.
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A MISSING PAYMENT
State lawmakers are calling on the New Mexico’s congressional delegation to help ensure that a $70 million federal payment arrives before June.
It is due from the U.S. Bureau of Land Management for an oil and gas lease sale in southeastern New Mexico that has triggered protests by two environmental groups who say the impacts of drilling operations have been underestimated. Bureau spokeswoman Donna Hummel said there is no guarantee to New Mexico of full payment as the agency responds to environmental concerns.
Sen. John Arthur Smith and Rep. Patricia Lundstrom, who oversee the Senate and House finance committees, have said a delay in receiving that money beyond June would leave the state with an extremely small financial cushion that could require budget cutting measures.
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END GAME
Martinez has scolded lawmakers for wasted time what she has called trivial legislation and promised to call them back to Santa Fe for a special legislative session to renegotiate a budget deal once she has reviewed all of the budget bill details. She also is calling the state’s budget difficulties as an opportunity to reduce the size of state government.
The governor has until April 7 to decide on a partial or full veto of a $6.1 billion spending plan that increases money for public schools and courts. The governor has vowed to veto tax increases in a companion bill that would raise $350 million in new revenues.
Wirth said the budget package was supported by a majority of Democrats and Republicans in the Senate, describing a “collaborative mission that said we couldn’t afford more cuts to public schools, our courts and public safety.”
He said tax hike proposals are structured so that the governor can line-item veto specific measures.
A veto override requires a two-thirds majority vote of both chambers of the Legislature.
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