Photo by Alfredo D. Ortiz

Waiting until January to cut capital outlay projects isn’t good enough, Governor Bill Richardson said today as he moved to cancel “pork projects.”

The move applies to all capital outlay projects except those that have already made grant arrangements with third parties.

In the final hours of the special session last Friday, Senator Eric Griego, D-Albuquerque, offered a capital outlay amendment to the final bill making cuts to state government.  Griego’s amendment directed state agencies to identify $150 million in capital outlay projects that could be cut in January when the legislature reconvenes.

During the floor debate, Griego said it was unconscionable that legislators would cut public schools or higher education instead of more capital outlay projects. His bill passed on a tie vote, with Lt. Gov. Diane Denish casting the tie breaking vote in favor of the amendment.

But January isn’t quick enough, Richardson said today in a strongly worded statement critical of the state legislature.

“I am taking this bold action since the Legislature chose not to cut even one dime of its pork projects,” Richardson said in the statement. “These pork projects should be the first to be cut before we take any action that affects people.”

The legislature, he pointed out, suggested they look at cutting projects in January, but no action was taken to actually cut the projects.

Richardson concluded that the freeze, which is effective immediately and will include both legislative and executive branch capital outlay projects, will remain in place through the regular legislative session that begins in January.

Rep. Luciano “Lucky” Varela, D-Santa Fe, urged the governor to be careful in what projects his agencies freeze.

“We may find ourselves in a confrontation in terms of folks affected by those projects,” Varela said.

Varela also urged a spirit of collaboration, especially after last week’s bruising special legislative session, in which state lawmakers criticized Richardson on numerous occasions for everything from not cutting spending enough to the number of political appointees he has.

“Let’s work together. Let’s try not to retaliate against each other,” Varela said.

But Richardson made it clear prior to the special session that he thought capital outlay projects should be a primary way that the state balances its budget.  As the Independent’s Trip Jennings reported in September, Richardson urged legislators to “cut pork” and “not cut people.”

“Let’s not make drastic cuts that hurt people. Let’s cut pork, let’s not cut people,” Richardson said Sept. 11 during an appearance at the New Mexico State Fair.

He added, “Let’s cut capital outlay. There’s about $1 billion that isn’t being used.”

Unused capital outlay money often accumulates over time because projects cost more than a legislator is able to allocate in a given year. So, other funds have to be raised, which often takes years. In this regard, while capital outlay dollars may not be spent as soon as they’re allocated,  they generally are being factored into funding efforts for local projects considered important to the communities in which  they’re located.

It was unclear how many brick-and-mortar projects would be frozen. A call to the governor’s office was not immediately returned.

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LFC Chart showing how a revenue raising package might look.

An analysis prepared for the Legislative Finance Committee—but not widely distributed—showed that at least $50 million could be raised this fiscal year through sin taxes and other measures.

The report was issued three days before the start of the special legislative session, and although several lawmakers had requested such an analysis, it just began to make the rounds of the Capitol on Wednesday.

Gov. Bill Richardson has prohibited state lawmakers from considering tax measures in the special session, despite the protests of some Democrats and at least one Republican.

“I am certainly disappointed the governor refused to put raising revenue on the table,” said Rep. Eleanor Chavez, D-Albuquerque, in reaction to the revenue chart. “It certainly seems prudent to begin planning now for the disaster that is coming. We are being put in the position of having to cut even more at the beginning at 2010.”

Despite five days of work, as of Wednesday night, state lawmakers still had not agreed on how to close a $650 million shortfall for the year that ends June 30.

The report, prepared for the chairman of the Legislative Finance Committee, Rep. Luciano “Lucky” Varela, D-Santa Fe, shows that the $53 million could be found by raising the motor vehicle excise tax by 1 percent, increasing the liquor excise tax by 10 cents a drink, and raising franchise and tobacco taxes—starting immediately.

Another $100.4 million could be raised through other measures in 2010, but the funds would be collected through income tax returns, delaying their availability.

For the year that starts July 1, the measures would raise approximately $545.8 million, including $238 million by increasing the top income tax rate by 1 percent.

Varela described the request as “well intended,” rather than a serious attempt to solve this year’s shortfall Wednesday.

“If the governor would have allowed us on his proclamation to look at revenue enhancements, then we would have been able to get some kind of number,” Varela said Wednesday.

The report’s existence comes days after state lawmakers participated in a heated debate over whether to make just deep cuts or balance with tax increases.

Richardson has said he’s “prepared to consider a comprehensive, well-reasoned revenue package,” but has told state lawmakers that he won’t consider such a package until the January regular session.

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