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3-percent cuts loom over government agencies

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By Associated Press

SANTA FE (AP) — Government agencies and programs in New Mexico will face 3-percent cuts starting next month under a plan approved Thursday to close a shortfall in the state’s $5.3 billion budget.

Public schools will largely escape the reductions because of a new influx of federal economic stimulus money.

However, education officials warn that large cutbacks loom next year unless lawmakers and the next governor find a way to replace the federal money when it’s no longer available.

“There is just a huge cliff and when all this stimulus money stops, we’re going to have to jump and it’s going to be a big jump,” said Winston Brooks, superintendent of Albuquerque Public Schools.

His comments came after the state Board of Finance approved a plan by Gov. Bill Richardson’s administration to trim                  3.2 percent, or $151 million, to balance this year’s budget.

However, New Mexico is getting about $65 million in federal stimulus money and that will mostly offset $77 million in cuts that otherwise would have been made to public schools.

Because of the federal money, state aid for school operations, including transportation costs, will be trimmed only about one-half of 1 percent.

The Albuquerque district will have to cut $4 million from its $600 million budget, according to Brooks.

However, he said no layoffs will be necessary and the district should be able to cover its budget gap by not filling vacant jobs.

New Mexico faces a financial squeeze because revenues are projected to fall about $200 million below what had been anticipated when the current budget was adopted by the Legislature.

The 2011 fiscal year started in July.

Cash reserves will help cover part of the shortfall but the Legislature empowered the governor to trim spending across-the-board to balance the budget.

Exempted from the cuts are Medicaid, which provides health care for the poor and disabled, along with services to the developmentally disabled and some legislative expenses.

It’s up to the administration to decide how executive branch agencies will absorb the cutbacks but the governor has said he hopes to avoid employee furloughs or layoffs.

New Mexico’s network of colleges and universities will be cut nearly $26 million. Each institution will determine how to carry out the reductions.

The judiciary — courts and district attorneys — will be trimmed about $6.5 million.

The Legislature required the Board of Finance, which is made up mostly of gubernatorial appointees, to approve the budget-cutting plan developed by the governor.

Attorney General Gary King’s office asked the board to shield its Medicaid fraud operations from the cuts, arguing that should be covered by the exemption lawmakers provided for Medicaid.

The administration and the board disagreed, however.Lt. Gov. Diane Denish voted against the budget-cutting plan, saying she opposed reductions for public schools. Denish also said it was a “fundamentally flawed process” to require equal cuts across all of government rather than making targeted reductions that could vary from program to program.

Denish is the Democratic gubernatorial nominee and is running against Republican Susana Martinez, the Dona Ana County district attorney.