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Gov. Bill Richardson today presented a budget-balancing plan to legislative leaders that addresses a $441 million revenue shortfall for this fiscal year, while keeping education spending intact.
“As promised, my plan closes the budget gap in a fiscally responsible way, without cutting education or increasing taxes,” Richardson said. “This plan, which is based on current revenue projections, is meant to start the discussion to resolve this deficit. I look forward to hearing additional ideas that legislative leaders may have.”
Richardson and legislative leaders jointly agreed that it would be premature to consider tax modifications during the special session, expected to be held in October.
He pointed out that additional cuts to state agencies beyond his proposed 3 percent for this year will likely result in furloughs and lay-offs.
The governor’s plan reduces expenses and utilizes available funds totaling $444 million for the 2010 budget year, while keeping cash reserves at 8 percent. The plan does the following:
• Agency Spending – Cut budgets by 3 percent, excluding public schools, saving $100 million
• Education Funding – Use $91 million in federal stimulus money to prevent cuts to public school spending for FY 2010.
• Bonding Capacity – Divert $135 million in available short-term bonding proceeds from future capital projects to operations.
• Capital Outlay – De-authorize between $60-$75 million in previously appropriated capital outlay projects – canceling one-third of the Governor’s projects; one-third of the Senate projects; and one-third of the House projects.
• Retirement Funds – Delay General Fund increases to retirement and Retiree Health Care Authority funds – saving $21 million
• Cash Balances – Use $40 million in available money currently sitting in state agency treasurer and bank accounts, as well as special fund balances. Of that, $20 million will be withdrawn from the College Affordability Fund – with the intent to replace it in future years.
Richardson presented his budget-balancing plan during the first executive-legislative working group that he formed to negotiate ideas prior to a special session.