A lot of speeches, but no budget plan on first day of session

Photo by Peter St. Cyr

The first day of the 2010 session ended as it began: with no clear plan to solve New Mexico’s worst budget troubles in decades.

Most everyone, meanwhile, stuck to their prepared opening-day scripts.

Republicans, and anti-tax protesters, chafed at the mention of raising new taxes to plug the budget hole, saying more spending cuts were needed. Certain leading Democrats, and advocates for the least vulnerable, pushed broad-based tax increases, saying services already had been cut too much.

It was the usual drawing of lines in the sand by state lawmakers before the serious budget negotiations commence. The state faces a shortfall variously estimated between $500 million to $900 million for next year, depending on whom you ask.

If past experience is any guide, the budget negotiations will come fits and starts over the next four weeks, with bouts of frustration interspersed with glimmers of hope.

But that deal will eventually come, said House Majority Leader Ken Martinez, D-Grants.

“There may be a group of people who will say I will not vote for X, for certain cuts, for certain increases, but I think you will see us gathering a majority in both houses that will vote for what’s necessary to govern,” Martinez said of the House and the Senate.

But on Tuesday, all the crosscurrents of rhetoric and the hard-and-fast lines drawn up, created expectations for a train wreck before the light at the end of the tunnel turns out to be a budget deal.

Gov. Bill Richardson, for his part, tried to set a conciliatory tone for the coming 30 days of budget debate in a 35-minute speech to the New Mexico Legislature’s 112 members.

Richardson said he wanted a sensible, no-frills budget that will close next year’s budgetary shortfall, a package including targeted tax increases and spending cuts.

He also set an ambitious agenda beyond addressing the state’s budgetary troubles.

Richardson told lawmakers he wanted them to pass domestic partnerships, which would extend many of the same rights that married couples enjoy to same-sex couples; a statewide ban on hand-held cell phones for motorists; a newly created ethics commission and other ethics reforms; tougher penalties for gang involvement; and stricter domestic violence legislation.

The laundry list of Richardson’s priorities left some state lawmakers predicting such hot-button issues like domestic partnerships and ethics reform would clog up the process.

“These are issues that bring a lot of attention into the Capitol,” said Sen. Minority Whip William Payne, R-Albuquerque. “They result in long committee hearings. They start backing up the process toward the end. Some people benefit from the confusion in the system. But I don’t think the taxpayers this year are necessarily needing that type of distraction.”

But the main priority Tuesday was addressing the state’s budget mess, which is so serious the Legislature met in a October special session to cut this year’s spending by more than $500 million.

The decisions made in October make lawmakers’ jobs somewhat easier, but only slightly.

Without being too specific, Richardson in his speech set parameters for what he wanted to see in whatever budget deal materializes.

“We must not turn our backs on our most vulnerable citizens, nor should we be reckless with budget cuts and reverse the progress we’ve made during the past seven years,” he said.

Further cuts to state agencies, meanwhile, “would mean certain lay-offs, closing facilities and ending public services when our citizens need them most,” he added. The governor has said he wants to avoid state worker layoffs after requiring 17,000 state workers to take five furlough days this budget year, which ends June 30.

Richardson also said he didn’t want to cut teacher salaries or classroom spending.

Richardson repeated his oft-quoted opposition to certain tax increases, like raising the state’s income tax or removing the food exemption from the state’s gross receipts tax.

Instead, he said he wanted smaller tax increases. Read so-called sin taxes, tobacco and liquor. Richardson also has indicated an openness to removing candy and soft drinks from the GRT food exemption to raise roughly $18 million in tax revenue.

Richardson’s stance on taxes puts him at odds with his staunchest legislative ally, House Speaker Ben Lujan, D-Santa Fe.

In fact, the Democrats, who control the Legislature, mostly support some package of tax increases, but are in disagreement over whether to adopt a broad-based tax increase or to target very specific taxes for increases.

Lujan has proposed a half-cent increase in the state’s gross receipts tax. It is a proposal also supported by powerful Santa Fe lawmaker, Rep. Luciano “Lucky” Varela, chair of the Legislative Finance Committee.

“If we’re going to do something with the shortfall, and we put these little pieces together, we’re going to lose some of it somewhere,” Varela said. “I’d rather have two broad-based taxes, which is the income tax and gross receipts tax.”

Sen. John Arthur Smith, D-Deming, and chairman of the Senate Finance Committee, meanwhile, has reluctantly stated a preference for raising a tax here, and a tax there, rather than passing a broad based tax increase.

Meanwhile, Republicans are marching in near unity: they don’t want tax increases, period.

“I don’t think we need to raise taxes on anyone,” said Senate Minority Leader Stuart Ingle, R-Portales. “It sends a signal that the minute that things get bad New Mexico is going to punish businesses and individuals. We don’t need to do that.”

Added Payne, Ingle’s Sen. Minority Whip: “A lot more cutting needs to be done. Certainly I agree with Sen. Ingle. Tax increases on working people and investment income is certainly not going to get us any nearer to closing the gap. But what it will do is probably retard the return to normalcy longer.”