I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
Tax increases are ‘inevitable’ Richardson says
The only things Gov. Bill Richardson seemed certain about Monday were that tax increases are needed when state lawmakers convene in January to address perhaps New Mexico’s most serious financial challenge in decades. Some predict a $1 billion shortfall when state lawmakers convene in January to write a budget for the year that starts July 1.
Tax increases are “inevitable,” Richardson said Monday. During last month’s special legislative session Richardson prohibited state lawmakers from repealing past tax cuts or raising taxes.
Plus, the state’s spending has to be reduced more, he added.
As to whether Richardson will sign or veto the state budget bill that provoked a minor skirmish between him and state lawmakers after last month’s special session, he wouldn’t say, however.
In fact, he didn’t narrow his options much at all during an afternoon news conference Monday. Twice Richardson indicated he’d rather not veto entirely a state budget bill the Legislature passed during a recent special session to address this year’s $650 million shortfall. But, he warned: Don’t think it’s off the table as an option.
The bill requires him to trim 7.6 percent of spending from dozens of agencies under his control, which adds up to $93 million or $125 million depending on who you ask.
Richardson has line-item veto authority, meaning he can cancel provisions but not the entire bill. But there also Richardson wasn’t sure what might fall victim to his line-item vetoes, if anything, and what might escape.
“There will be significant cuts,” Richardson said. “We have a serious budget shortfall and we have to deal with it.”
The budget fix the Legislature passed during October’s special legislative session has been the subject of much back and forth between Richardson and state lawmakers since Oct. 23, the day the seven-day session ended.
“I am looking at every single provision in the legislation,” Richardson said. “There are going to be significant cuts. We do have a serious budget shortfall in the state. The issue is gonna be how and where and when we implement the cuts.”
Several agencies have come out in recent days with doomsday scenarios that represent what would happen if Richardson were to cut 7.6 percent from each agency under his control, something the bill doesn’t require.
The Human Services Department came out first with an announcement, saying a 7.6 percent cut in state Medicaid dollars added up to $38 million, which would result in the loss of an additional $115 million in federal Medicaid dollars. Medicaid is the state-administered low-income health insurance program.
Next the corrections department announced a 7.6 percent cut would require that agency to close two prisons and let out up to 600 prisoners.
“What I wanted my cabinet agencies to do is to show transparency in them each releasing the implications of some of these reductions and cuts are,” Richardson said Monday.
State lawmakers have said the budget bill gave Richardson broad discretion to cut where he thought best. And two legislative leaders also advised the governor in a letter Friday that it was the Legislature’s intention to protect Medicaid from cuts in the bill, similar to K-12 education and state police, which also escaped serious cuts.
But choosing where to trim appeared to be giving Richardson serious trouble Monday.
“I don’t want to close two prisons,” the governor said. “I don’t want to let 600 prisoners out. I don’t want to cut Medicaid, children’s health care. I don’t want to cut senior citizens’ meals.”
When asked if he had enumerated a list of items he would protect with his line-item veto authority, Richardson responded, “There will be cuts to those. I am not saying that they’re going to be zero cuts to them. Corrections can’t take a 7.6 percent cut. I just want to be sure we are doing the right thing.”
Richardson’s budget chief, Katherine Miller, later said exempting K-12 and Medicaid, which make up more than half of state spending, from serious cuts meant deeper cuts for other agencies. Wringing 7.6 percent in reductions out of remaining state agencies under the governor’s control was more like 16 percent cuts, she said.