Posts Tagged ‘Budget’

Stitching a Budget Together With Disappearing Thread

Wednesday, February 17th, 2010

They are feeling the pressure at the Roundhouse to get a budget approved before the strike of noon tomorrow.

“I’m hopeful we can come up with something (to avoid a special session),” said Senate President Pro Tem Tim Jennings, D-Roswell, who’s participated in the budget talks.
        

The House approved cuts of about 1 percent for public schools and government services, while the Senate budget package calls for reducing spending levels by about 3 percent.
        

The shallower cuts in the House plan would be made possible by more than $300 million generated by tax hikes, primarily the gross receipts increase. The Senate plan relies on $180 million in new tax revenue.
        

However, Jennings said he’s concerned revenue levels might end up being even lower than projected and said Richardson has criticized more tax ideas than he’s offered. 

 I’d say that Senator Jennings concerns about lower revenue levels are well founded.  Consider for a moment the source of some of the revenue being expected to help plug the gap:

The Finance Committee approved the budget on Thursday and sent it to the Senate for consideration.
The committee proposed spending about $5.5 billion in the next fiscal year, which starts in July. That includes about $200 million in federal aid that’s replacing state money for Medicaid, public schools and higher education.

 Of course, there’s one obvious problem with this plan. It seems to fail to consider the reality of what is being said about the future of federal money coming to the states:

Payments to states and individuals will fall to $11 billion, from $14 billion, per month. Much of this spending — such as Medicaid funding and additional unemployment benefits — was meant to stabilize the economy during the recession.

 Yuppers, it looks like that faucet is starting to be turned in the opposite direction. So, here’s my prediction. Assuming a state budget gets approved by noon tomorrow, we will most likely see a special session before the summer is over to deal with the “surprise” lower than expected revenues.

Wall Street Versus Main Street Continues

Thursday, February 4th, 2010

I’ve wondered aloud on more than one occasion why the vast majority of stimulus efforts on the federal level were given to Wall Street versus Main Street. Of course, we all know the reason.  Democrats are providing special favors to their favorite campaign donors and making sure that big inefficient businesses with powerful unions can keep their doors open regardless of the lack of demand for their product.

Well, as near as I can tell, the same thing is happening in the New Mexico legislature – the interests of large business at the expense of small business. Only instead of giveaways of taxpayer money, we’re talking about who the Democrats in the legislature are opting to tax.  Mind you, I say Democrats because the Republicans have made it clear that reining in the size of government should happen before increasing taxes:

Republicans in both the House and Senate are expected to take a hard-line approach against tax hikes, although they bristle at suggestions they’re merely trying to block the Democratic agenda.
    

“They’ve never asked us to be part of the solution,” said Rep. Jimmie Hall, R-Albuquerque.
    

Hall said he thinks there are still ways to trim the budget — by targeting administrative and vacant positions — without hurting core services.
    

“I can’t support any tax increases until we shrink state government down to a level that a populist can support,” he said. 

So, back to the tax, tax, tax enamored House Democrats. Let’s take a look at their proposed solution:

Gov. Bill Richardson said Wednesday he supports the House’s budget approach, which includes temporarily raising the gross receipts tax rate and imposing a personal income surtax on high-earning New Mexicans. 

I’ve explained in a previous post that what is really being proposed is a tax increase on the profitable retained earnings of remaining small businesses.  In other words, the money they need to weather the storm and keep key employees at work is the target of the tax increase. Now, yes, I’m of the mind that significant spending cuts should be made before even considering any tax increase, but I can’t help but wonder if the Democrats are so bent on raising taxes, why they are targeting small New Mexico businesses instead of large Wall Street firms.


Think about it.  The general consensus is that small, not large businesses are the key to a true economic recovery. The irresponsible stimulus spending may have helped keep the doors open of those who are “too big to fail,” but it did nothing to keep your neighbors, family and friends employed:

Unemployment rates were higher in December than a year earlier in 371 of the 372 metropolitan areas and lower in 1 area, the U.S. Bureau of Labor Statistics reported today. 

President Obama is finally awakening to the fact that America (and his popularity) is hurting because he has put the interests of Wall Street and unions before that of Main Street families:

Faced with a national 10 percent unemployment rate and a corresponding erosion in his popularity, President Obama delivered his first State of the Union address tonight and offered up a laundry list of proposals aimed directly at the small businesses who do 60 percent of the hiring in America.

So, you’ve got to wonder why House Democrats in the legislature have targeted small businesses and left big businesses alone. Sure some big business tax bills were introduced, but bills like HB 62, which would could raise taxes on large out of state corporations, got a pass in favor of taking more money away from job creating small New Mexico businesses.

Come Election Day 2010 the House Democrats, all of whom are up for re-election, are going to find that it is the Main Street business owners, employees and their families that are going to vote.  You know, the ones that actually live in the state.

It’s Called Permanent for a Reason

Wednesday, January 27th, 2010

New Mexico has something called a Permanent Fund.  It is money socked away in recognition of the fact that one day the oil and gas resources that fill our state coffers will be no more. It might be worth visiting Merriam-Webster’s definition of the word permanent:

Main Entry: 1per·ma·nent
Pronunciation: \-nənt\
Function: adjective
Etymology: Middle English, from Anglo-French parmanant, from Latin permanent-, permanens, present participle of permanēre to endure, from per- throughout + manēre to remain — more at per-, mansion
Date: 15th century
: continuing or enduring without fundamental or marked change : stable
synonyms see lasting
per·ma·nent·ly adverb

per·ma·nent·ness noun

Now that we understand the word “permanent,”  I think we can all agree that there isn’t any circumstance in which “Permanent Fund” could be misinterpreted to mean “Rainy Day Fund:”

A type of contingency fund in which money is set aside to be drawn upon in case of a future budget deficit. It is often referred to as a budget stabilization fund.

Yet, that is precisely the type of convenient rewriting of the English language one legislator is promoting:

A leading state Senate Democrat says it’s time to borrow against New Mexico’s rainy day funds for a $500 million loan — a gamble he says would make it unnecessary for lawmakers to approve major tax hikes and cut the salaries of state workers this year.
    

Under the terms of a bill introduced by Senate Majority Leader Michael Sanchez, D-Belen, up to $500 million could be moved into the state’s general fund by directing the state’s Board of Finance to issue short-term revenue bonds.
    

The bonds would be paid off over five years via a special fund created for that purpose, Sanchez said, with the money coming from general fund appropriations and a portion of the state’s gross receipts tax revenues.    

Sanchez acknowledged that the bill (SB184) hinges on a wager that the state’s economy will improve in the next few years.

You might consider sending the good Senator from Belen an email letting him know that we, the taxpayers and our children and grandchildren, prefer that he keep his wagering to recreational pursuits done with his own money on his own time at any one of the fine tribally owned casinos found throughout the Land of Enchantment.

Executive Budget Recommendation for Fiscal Year 2011

Wednesday, January 6th, 2010

Governor Bill Richardson’s 181-page Executive Budget Recommendation for Fiscal Year 2011 was released yesterday, and I’m having a really hard time making it past page ten:

Governor Richardson believes government must be managed in a fiscally responsible manner, and that every government program must be held accountable to the taxpayers. Throughout his administration Governor Richardson has worked to make sure every tax dollar is spent wisely. He has required state agencies to find efficiencies, streamline existing processes, realign resources as policy priorities change, and collaborate to reduce duplication and bureaucracy.

During his first year in office, the Governor implemented a number of efficiency measures, including eliminating unnecessary contracts, maximizing federal and other revenue, shifting dollars to the classroom, executing strategic purchasing and implementing a statewide performance review that by FY07 resulted in more than $80 million in savings to the citizens of New Mexico. He also stepped up enforcement against tax fraud to collect more back-taxes owed.

The only explanation for the above excerpt actually showing up in print is that the Governor has found money to hire joke writers. After all, there is a lot that can be said about how the Richardson Administration has managed the state, but the words “fiscally responsible” don’t belong anywhere in that description.

Let’s look at some of the key points being made here.

  1. “Every government program must be held accountable to the taxpayers” – When was the last time you heard about a government program being held accountable under the Richardson Administration? The correct response would be never.  The only government programs that have been shutdown for a lack of accountability have come about as a result of external indictments. Heck, even the proposed across the board “3-percent reduction in spending” is a way of avoiding holding individual programs accountable.
     
  2. “Throughout his administration Governor Richardson has worked to make sure every tax dollar is spent wisely.” – Talk about re-writing history. I’m trying to understand how losing $90 million in an effort to fill the pockets of campaign contributors is considered spending tax dollars wisely.
  3. “He has required state agencies to find efficiencies, streamline existing processes, realign resources as policy priorities change, and collaborate to reduce duplication and bureaucracy.” Let’s see, hardly a year went by where the Governor did not create new layers of government or dole out high paying government jobs to supporters. How this can be seen as reducing duplication and bureaucracy is anyone’s guess.

The rest of his claims are just as ridiculous.  Scanning through the actual line item proposals actually leaves one scratching his head as well. Sure, there are a lot of proposed cuts, but its the proposed increases that just don’t make a lot of sense.  For example when considering must haves during a time of economic crisis, consider whether these make the top of your list?

  1. 26.2% budget increase for the Athletic Trainers Practice Board
  2. 11% budget increase for the Interior Design Board
  3. 489% budget increase for the Office of the Natural Resources Trustee
  4. 28% budget increase for the Legislature

All I can say is that’s an interesting choice of priorities when you’re going to be coming after the taxpaying public for even more tax dollars.

    Another Reason Dollars Should Follow Children

    Friday, December 18th, 2009

    Whether a charter school is succeeding or failing in meeting its students educational needs, there is one component that is undoubtedly in play that does not exist at most regular public schools – parental involvement. In order for a child to be attending a charter school, a parent or guardian had to make a conscious choice and effort to get their child into that school. And, in the end, if they are unsatisfied with the results, they can move their child out of the school and to another.

    This is a good thing. In fact, parental involvement in a child’s education is one of the key factors in improving student performance. Yet, the Albuquerque Public Schools (APS) wants to shut down opportunities for more parents to take an active role in their children’s education:


    Albuquerque Public Schools wants lawmakers to place a moratorium on new charter schools until existing schools are fully funded.

    The request is one of the items on the district’s legislative wish list, and it aims to help APS deal with a budget crunch.

    “We need to stop putting in place new programs or schools that take away from the pie of money,” APS lobbyist Joseph Escobedo said.

    The theory that moving dollars from one education environment to another is “taking away from the pie of money” is absurd. It is a redistribution of money, but it doesn’t shrink the overall pie. Kids are still going to be educated using the same amount of dollars. Actually, maybe I should reword that to say some kids will finally be educated using the same, and quite possibly less, dollars.

    Why is it that government entities always support redistribution of wealth from taxpayers to their budgets, but fight tooth and nail when the redistribution is from their budgets to another public entity budget? When that is proposed, it makes the pie smaller. Of course, we all know that it doesn’t shrink the pool of money, it just allows it to move to potentially more productive uses. Something that really ought to be the focus of the upcoming legislative session as opposed to taking more from taxpayers. But, I digress.

    This is yet another reason that taxpayer dollars allocated for educating our children should follow those children as opposed to making the children follow the dollars.

    Disclaimer: Our kids attend a fantastic charter school, Family School. So, I’ve got an inherent bias here. Plus, it would be highly hypocritical of me to take advantage of school choice for my children, but say from this point forward other people’s children should not be afforded the same opportunity.

    So Here’s a Thought

    Tuesday, December 15th, 2009

    The union appears to be a little riled with Governor Richardson over the nonnegotiable forced furlough of state employee’s as one tactic to plug the state budget gap:

    The American Federation of State, County and Municipal Employees Council 18 says Richardson’s administration violated the law by refusing to bargain with the union over five unpaid furlough days Richardson ordered for 17,000 state workers in December, January, March, April and May.

    “It’s a fairly simple complaint,” said Albuquerque attorney Shane Youtz, who is representing AFSCME and its 6,000 members. “We asked politely to bargain and were told no.”

    State Personnel Director Sandi Perez said the state fulfilled its legal duties by discussing the furloughs with union leaders in November.


    Well, here’s a fairly simple idea for union leaders. Next time, the government starts promoting spending gobs and gobs of money (translation: hundreds of millions) on things like Spaceports and trains, you might want to voice your opposition. After all, it’s things like the ongoing tens of million of dollars in losses incurred by the Rail Runner that are causing your union members to have to take unpaid furlough days:


    The red ink lubricating the wheels of the Rail Runner is getting redder. Its operating deficit for the fiscal year ending June 30, 2009, topped $19 million. It collected a mere $1.9 million in fares against $21 million in operating expenses. The losses are greater than we reported in August. Based on information provided us by the Middle Rio Grande Council of Governments, we reported then that the Rail Runner’s operating loss through May 31, 2009, exceeded $13.4 million. But data for the entire fiscal year, ending June 30, 2009, reveal a number almost 42% higher.

    Now, I realize there are several members that might be taking that train up to Santa Fe, but I’ll bet you there are even more that are not. Which mean, that the vast majority of members are going to see a cut in pay, so a handful can pay less than their full share to ride the train to Santa Fe.

    It’s just something for you to consider.

    An Interesting Choice

    Thursday, December 3rd, 2009

    Listen, I’m the first one to advocate for cutting the explosion of appointed positions from state government. But, with the culture of corruption and fraud that has plagued New Mexico under Governor Bill Richardson’s, especially in the arena of investments, this cut leaves you scratching your head:

    One employee who got a pink slip said his job probably isn’t the kind the Legislature intended to eliminate.

    Bruce Kohl, head of the Securities Division at the Regulation and Licensing Department, said he’s a recognized expert in his field who has put in 15 years at the division under several governors.

    “I think they intended to get rid of political deadwood, not the technical professionals needed to run state government,” he said.

    “I think the public has the perception that exempts are a bunch of political hacks who can’t be touched, but there are some very good people who serve as exempt employees,” he said.

    Kohl, an attorney, worried more about what’s next for the division than his own future. Among other things, the division brings securities fraud cases.

    This is right up there with those that were looking to gut the State Auditor’s office. There is only one way I think this makes sense. That is if the Governor’s office is going to release a statement that says Mr. Kohl was guilty of looking the other way while the Richardson Administration allowed political connections to be used to guide investment contracts that resulted in millions upon millions of dollars in losses for New Mexico taxpayers.

    Of course, if the opposite were true, and Mr. Kohl played a role in bringing these practices to light, well, then it sure would appear that the Richardson Administration is going after the good guys. I don’t know which it is, but someone’s got some explaining to do.

    Taxes Before Responsibility

    Friday, November 20th, 2009

    There’s a war brewing for the 2010 Legislative Session. The battle lines have been drawn, and on one side are those that believe government excess should be pared down, and on the other side are those that want to see the tax and spend party to continue by raising even more taxes. The spend, spend, spend people have formed the organization, Better Choices New Mexico, to make their case, which basically boils down to:

    This alliance of small businesses, faith-based groups, working families, and nonprofit organizations believes cutting critical services and programs would be a terrible mistake. Instead, the Legislature needs to open the books on tax expenditures, close the loopholes for out-of-state corporations, and rollback the tax breaks for the wealthy.

    What’s amazing to me is that essentially what they are defending is the spending gone wild policies that have left us in an economic crisis that should not have occurred. Any organization that wants to be taken seriously about seeing better choices in New Mexico had better address the severe mismanagement of taxpayer funds by the state before asking for more money. Their one-pager makes the case over and over again for increasing revenue, but not once does it talk about cutting expenses. The closest it comes is to suggest shifting dollars from one area of waste to another.

    And, mind you there is a lot of waste in government spending in this state. There are the obvious signs of waste that are uncovered everyday:

    Nemazee and others connected to Carret Asset Management gave campaign contributions to Gov. Bill Richardson before and after receiving the contract, according to the magazine. “The contract with the State Investment Council, which oversees $12 billion in trust funds from oil and gas leasing fees, has so far yielded $1.7 million in fees for Carret,” the author of the article, Nathan Vardi, reports.

    Of course, no one wants to take responsibility for this kind of waste:

    Richardson’s spokesman says the governor, who is chairman of the New Mexico State Investment Council, played no role whatsoever in the hiring of Carret.

    Only in New Mexico could the Chairman get away with full denial of accountability. Then again, this is the same Governor who can hand out multi-million dollar favors like candy on Halloween
    without the least bit of economic restraint, no matter how bad out budget situation may be:

    I’m positively shocked that Governor Richardson has been a long time friend of the Hool brothers who are behind the Santa Fe Studios. The project, which I wrote about a few months ago, is being subsidized to the tune of $10 million by state taxpayers with taxpayers in Santa Fe County chipping in another $6 million. The whole thing stinks.

    Of course, at the same time as he is pushing for additional subsidies for an already-subsidized industry, Richardson is pushing for tax hikes on the rest of us.

    Then, there is the wasteful spending that is not so obvious unless you’re a government insider:


    I am a state employee who is faced with trying to determine where to cut groceries, utilities, Christmas spending…I can accept the furlough…However, I looked at the salaries at executive agencies and must ask how did the agency on aging become a full Department? Military affairs? Where did some of these commissions come from? Do we need them or should we place higher expectations on persons employed in these areas? For example, why isn’t the Department of Homeland Security part of the Department of Public Safety?

    Why not consolidate programs and eliminate some high salaried executives? Why are we paying outlandish rents for private buildings when there are vacant government buildings? I am not placing the blame on any branch of government, just venting.

    Well, someone better start blaming a branch of government. It’s called accountability. But, then again, its easier to push for tax increases than to actually try to make a better choices in New Mexico. After all, it’s all about our children, right?

    Three sport utility vehicles purchased for school administrators from an out-of-state dealer. A $91,000 tow truck. Thousands of dollars for iPods for students. Paying athletes and cheerleaders to pull weeds. Lunches, including a $110 tab at the Rio Chama Steakhouse paid for by federal funds intended for low-income students.

    These are just some of the questionable expenditures uncovered by audits of five medium-sized school districts that were discussed Thursday at a meeting of the Legislative Finance Committee. One LFC staffer said these audits “barely scratch the surface” of waste and abuse in some school districts.

    Yeah, it’s all about the children. Now, you tell me something. Do better choices start with putting more money in state coffers, or does it start by saying enough is enough? Until the people taking and spending our money are held accountable for their fiscal mismanagement, corruption and fraud, I say they don’t get to increase taxes by even one tenth of one percent.

    Education Cuts Put in Perspective

    Wednesday, October 21st, 2009

    The education establishment is up in arms and willing to go to any length to fight education cuts during the special session. Admittedly, part of the problem is the way that cuts are proposed. Rather than take responsibility for past irresponsible actions, the Richardson/Denish Administration like to propose “across the board” cuts:


    Richardson has proposed a 3.5 percent cut to state agencies and a 1.5 percent cut to public schools, which would amount to about a $40 million reduction in the state budget for kindergarten through 12th grade.

    Taking this approach to reigning in a budget gone wild is irresponsible at best. Yet, a recent special audit report released by State Auditor Hector Balderas show just how much waste is in education:


    The money involved in the transfer to the discretionary account came from funds meant for technology and transportation, Balderas said. About $3,500 of it came from federal Head Start money, in violation of the federal rules, the audit states.

    Among the items allegedly purchased by the northern New Mexico school district through the discretionary account were:
    • More than $2,800 in lobbying expenses.
    • $200 spent on 20 bags of beef jerky for lobbying at the Legislature last March.
    • $742 spent on food at the Bull Ring in Santa Fe for a legislative meeting last February.
    • More than $900 spent on flowers for funerals and other events.
    • Jackets for all district staff for staff appreciation in January 2007 costing $3,299. More jackets for staff and also for legislators in March 2007, costing $290.
    • Gift certificates from Wal-Mart for three retiring employees in May 2006 costing a total of $150.
    • A $302 gift from Zales Outlet for the district’s retiring superintendent in August 2006.
    • Another $1,200 for items for conference rooms from a vendor called “Nambe” in August 2008.
    • For district staff: more than $1,300 for hams in December 2007, more than $1,600 for turkeys in February 2009 and more than $900 for denim shirts in April 2009.
    • And more than $2,400 spent on jackets for district leadership in March 2009.

    The audit said that depositing money into the discretionary account resulted in less money available for school district operations. Auditors looked into transactions from the discretionary account from fiscal years 2006 to present.

    Consider that’s just one finding, and it accounts for almost 1.5% of the district’s annual budget. Let’s roll up our sleeves and get the job done.

    Budget Cuts Shouldn’t Hurt Kids

    Thursday, October 15th, 2009

    Governor Richardson’s mantra going into the Special Session this weekend is a simple one: “Budget cuts shouldn’t hurt kids.” It’s one that I wouldn’t be surprised to learn had been voter tested and approved:

    But most interesting was $38,353 paid for “research/polling” to a company called Fairbank, Maslin, Maullin & Associates in Santa Monica, Calif. Nearly all the money was paid in June, a much smaller chunk paid in September.

    It’s a simple message, and a nice diversion tactic. Governor Richardson gets to avoid taking ownership for spending New Mexico into a crisis. He gets to pretend to be the great savior of our children, while trying to turn the legislature into the big bad wolf:


    Gov. Bill Richardson late Tuesday rejected legislative proposals to plug a state budget gap that’s now expected to top $650 million, saying at least two of them would cut too much money for public schools.

    Richardson called for lawmakers to try again before a special legislative session on the budget starts Saturday.

    “Governor Richardson has studied the legislative proposals and finds the cuts to education unacceptable because of the severe impact to teachers and kids,” Richardson spokesman Gilbert Gallegos said. “The governor wants one proposal from the Legislature, not three, that makes fiscally responsible cuts without hurting schools.”

    But, here’s the thing. The Richardson Administration, and to a great extent the rubber-stamping majority in the legislature have done more to damage education in New Mexico over the last seven years, then anything some cost-cutting could ever do. They’ve herald one supposed “great” education reform after another without ever actually doing anything to improve education for our children. Worse yet, they’ve refused to ever take ownership of their repeated failures:


    A new batch of testing results shows New Mexico students’ math scores are among the nation’s worst, with little change from previous years.

    The data, released by the National Assessment of Educational Progress and often called the Nation’s Report Card, shows New Mexico’s fourth-graders with an average math score of 230 out of 500. The national average was 239.

    The New Mexico average score for eighth-graders was 270, compared to a national average of 282.

    The achievement gap between New Mexico’s Anglo students and students of other ethnicities remained wide, without significant change from 2007.

    Secretary of Education Veronica Garcia said the overall numbers may not provide a fair comparison because of the small sample of students tested. About 11 percent of New Mexico’s fourth-graders and 10 percent of eighth-graders took the test.

    Garcia also said students and teachers in New Mexico often do not take the test very seriously because scores are not broken down by district or school. She said other states use incentives to raise awareness about the test’s importance.

    Oh yeah, that’s the problem with the test scores. We don’t have a big enough media campaign to let our kids know that tests are important. They actually know all of the information, there just not taking the test seriously. GIVE ME A BREAK! Here’s a novel idea… How about taking ownership for the education failures?

    Look, year after year, we’ve thrown ever-increasing pots of money at education with ever-worsening results. How about we try something different? Go ahead and cut education spending. Let’s stop pretending the children are going to get hurt. Based on the test results released year after year, it can’t get much worse for them.

    And, as long as we’re making cuts, how about getting rid of the hundreds of governor created and appointed positions drawing down comfortable salaries for absolutely no work. In fact, let’s fire everyone who can’t seem to get their department to actually provide the services they are supposed to be providing.

    Heck, why stop there? Let’s just fire everyone who refuses to take responsibilities for seven years of failures and fiscal mismanagement. Start with Governor Richardson and don’t stop until you find someone who says, “I’ve totally and completely messed up, and this is how I’m going to fix it.” My guess is that before you find that person, the budget will actually be balanced.