Day three: Gov. Richardson, state lawmakers lock horns

Richardson's budget secretary, Katherine Miller, answers questions in the Senate.

SANTA FE — Three days into the special legislative session, a nearly $900 million structural deficit continues to confound Gov. Bill Richardson and the New Mexico Legislature.

Richardson and lawmakers face a challenge unseen in decades: a $200 million deficit for the budget that ended June 30 and another $650 million shortfall this budget year.

And the stress is showing.

“For each day we’re here, that’s one teacher and one teaching assistant,” state Sen. Howie Morales, D-Silver City, said, referring to the nearly $50,000 a day it costs to fund the special session. “What does that mean for a small school district? We’ve been here three days. It’s time we moved on to solutions.”

As of Monday afternoon, hopes for an imminent deal appeared dim. Richardson and top lawmakers seemed no closer to a agreeing how to close this year’s shortfall than when the session began Saturday.

House and Senate leaders plan to meet this morning to see how if their plans are close.

Meanwhile, Richardson, the state’s bigger-than-life chief executive and former presidential candidate, finds himself in a position unusual during his six-year tenure, attacked from both the political right and left.

Republicans and conservative Democrats blame him for not putting the brakes on spending leading up to the special legislative session, a charge his staff says misstates the facts. Progressive Democrats, meanwhile, are crying foul that he is opposing tax increases, and is only open to spending cuts.

“I think this is very irresponsible behavior,” Sen. Gerald Ortiz y Pino, an Albuquerque Democrat running for lieutenant governor, said Sunday. “He doesn’t want to be the bad buy. He wants us to be the bad guys.”

Added House Minority Whip Keith Gardner, R-Roswell: “The truth is, a real executive would have already fixed this by saying I’m cutting across the board my own budget to reduce my expenditures in order to accommodate the income coming in. The reason that we are here in special session is because the executive refuses to do what his job is, which is to cut expenditures.”

A column by Las Cruces Sun-News managing editor Walter Rubel, a former state Capitol reporter, best exemplifies the mood. Copies of the column have made the rounds with state lawmakers at the Capitol.

Rubel’s column profiles a 2005 report by the states Legislative Finance Committee that he says predicted the financial mess the state now finds itself in.

Rubel wrote:

“Projected recurring revenue growth may be too low to support the estimated recurring expenditure level in [fiscal year] 09 to [fiscal year] 10,” the report said.

Days after that 2005 report, Gov. Bill Richardson dismissed any suggestion that the state should consider reigning in spending. He had big plans and an ambitious agenda, and he wasn’t going to let any Chicken Little bean counters get in the way.”

State lawmakers and staff, especially those on the Legislature’s finance committees, view the column as a bit of vindication. Certain lawmakers for years have warned that New Mexico’s revenues weren’t stable after the 2003 state income tax cuts at the same time that state spending increased. If the price of gas and oil dropped, or the national and state economy stumbled into a serious recession, they said, New Mexico would face serious problems.

As it happened, both the drop in oil and gas tax revenue as well as a deep recession occurred.

The anger at Richardson is almost palpable in the Capitol, although most state lawmakers still decline to share their feelings publicly.

But that anger was on public display in the state Senate Monday.

State senators dragged in Richardson’s budget staff for a marathon grilling, during which budget secretary Katherine Miller deflected criticisms for nearly three-and-a-half hours.

“Since November, we’ve reduced the number of state workers by 760 employees and reduced payroll by $1.3 million on a bi-weekly basis,” Miller said in response to charges that the administration had not cut expenses.

Later in the day, the governor’s office issued a statement in response to the state lawmakers’ criticisms.

“I am disturbed that some lawmakers have seriously mischaracterized the results of these important cost cutting measures,” Richardson said in the release. “The truth is, there have been real results and savings to the State of New Mexico. In just the past eleven months, we’ve cut payroll by millions while making sure services to New Mexicans are not affected.”

The release had a different number than Miller gave to state lawmakers. The governor’s statement said “the state has nearly 1,300 fewer employees than when the hiring freeze took effect on November 15, 2008.”

State lawmakers also quizzed Miller why the state had a $200 million shortfall for the budget year that ended June 30. The state hasn’t closed the books on last year because the Legislature needs to appropriate $200 million to pay all that year’s bills.

Miller told state lawmakers that it was a revenue problem. The Legislature had allotted so much in expenses for last year, but revenue didn’t keep pace with expenses. In fact, revenues dropped precipitously in the last months of the year, in April, May and June.

Miller said the administration “does not have the authority to not allot the money the Legislature has allotted.”

That answer didn’t go over well with Sen. William Payne, R-Albuquerque.

“I don’t read the statute that the governor can spend until he says I will call the Legislature in to fix this thing,” Payne said. “It’s not the Legislature‘s job to come in and clean up” after the governor.

Also catching the lawmakers’ ire was the issue of Richardson’s political hires.

Sen. John Ryan, R-Albuquerque, questioned Miller on how many individuals Richardson had appointed to political jobs at state agencies.

Ryan and Miller sparred over the number: Ryan placed the number somewhere in the mid 500s; Miller said it was around 450.

The breadth of legislative anger over the issue manifested itself when a majority of state senators signed onto legislation Ryan plans to introduce limiting the number of so-called exempt employees to 200.